A Fare Amount: How Much Should Public Transport Cost in Chisinau?
This is a translated and slightly adapted version of an article originally published in Romanian on October 23.
The acting mayor Adrian Talmaci has caused quite a stir recently among Chisinau residents by claiming that the fare for a trolleybus ride should be 5 lei, and a bus ride should cost 8 lei – from the current 2 lei and 3 lei, respectively – if the municipality were to make a profit. Newsmaker asked both candidates facing off in the second round of the mayoral race next Sunday what they thought about it. ACUM’s Andrei Năstase avoided a straight answer, saying that he wanted a more comfortable, bigger and newer fleet. The Socialist Ion Ceban said he was categorically against any increase in fares, saying it would affect the 77,000 socially vulnerable residents of the city such as pensioners.
What the candidates’ manifestos say
Nothing about fares. Ceban promises a single travel pass for all modes of public transport, while Năstase goes a little bit further promising “a coordinated and unified approach to all the subdivisions of public transport in Chisinau, by channeling all the resources into a unified project”. If we get it right, this means the merger of the Electric Transport Company RTEC with the Urban Bus Fleet PUA. Neither of the candidates is specific about the size of this unified fare.
What is the current situation?
Quite bad actually. Last year alone the municipality subsidized RTEC and PUA with ~400 million lei or 10% of the city budget to keep the wheels turning at the two companies. Even so, both ended the year in the red. The question is whether this budget deficit is solely related to the size of the fare or there’s more to this problem.
The Court of Audits, the agency responsible for counting public expenses, might have the answer. One of its reports suggests there is a plethora of management issues at the two municipal companies, and more serious than the fare size, too. Without objective and accurate passenger flow data, broken down per hour, stops and routes, public transport cannot be planned effectively. For instance, today some trolleybuses are overcrowded, as others run almost empty for much of the day. Trolleybus no.20 has 1.5 passenger per km, while trolleybus no.22 has a rate of 5.7. The overlap rates among routes among one another are 66% for RTEC and 85% for PUA.
Besides the route planning issue, the Court of Audits also shows that RTEC administers 5 hectares of land plus buildings estimated at 43.5 million lei that aren’t registered with the cadaster authorities. Further, RTEC received a plot of municipal land to build an apartment block for its employees. 22 of the 122 apartments were resold, 22 others were allocated to beneficiaries not on RTEC’s payroll, while some employees were allocated two apartments each. Elsewhere in its operations, RTEC spent an extra 3.5 million lei buying parts through intermediaries.
The situation at PUA isn’t any better. The municipal bus company leased three routes to a private company through a direct contract, without a bidding process. PUA threw away extra 3 million lei between 2014 and 2016 on buying fuel from providers that didn’t offer the lowest price. Further, the company bought two Volvo coaches with 550,000 lei in 2012, but they have been rusting away without use since, for lack of spare parts. In 2016, PUA spent 11.6 million lei or 400,000 lei per vehicle on repairs. For comparison, the Court of Audits cites Customs Service data, which shows that in 2014 a private firm managed to import used buses from Sweden at 307,000 lei a pop.
The list is far from being complete. And while the individual amounts enumerated above may not seem like a big deal for two municipal companies servicing a city of about 700,000 residents plus guests, they add up to the following conclusion: RTEC and PUA have a defective management, unused resources and expenses that could use some optimization.
What needs to be done?
Ion Ceban is right saying that the fares shouldn’t be increased right now. But the main reason is not the 77,000 socially vulnerable beneficiaries. It shouldn’t be increased because nobody seems to know exactly by how much. The latest estimates presented by the acting mayor Talmaci are based on the current – bad – situation and any such increment would unjustly make the municipal taxpayer foot the bill for RTEC’s and PUA’s ineffective management.
A responsible reassessment of the fares, if it cannot be avoided, should instead be based on a fresh audit and in concert with other measures, such as cutting unjustified expenses and improving financial efficiency. The Court of Audits estimates that a RTEC-PUA merger would save about 3 million lei in administrative costs.
Of course, optimizing public transport is not only about money. There are other measures as well, and some of them are reflected in the two candidates’ programs, such as a strict observance of the schedule and dedicated lanes to cut wait times (Ceban), or the introduction of a digital system to manage traffic and the renovation of trolleybus/bus stops (Năstase).
Another, long overdue, measure would be the introduction of an e-ticketing system, which would fix several problems with one shot: will make it harder to underreport passenger numbers across the revenue chain, will cut personnel costs, and will serve as a very useful tool for detailed passenger flow analysis which can subsequently improve planning.
Both candidates put buying new vehicles on top of their priority list for public transport. Even if the city government decides not to increase the fares (by the way, it’s the City Council, rather than the mayor, that has the final say in this), the financial problems at the two companies should not be neglected. Pumping money into them through direct subsidies or by buying new vehicles with municipal money, or by increasing the fares, does not fix the root cause of the two companies’ financial holes.
Finally, making public transport more economically efficient should not be confounded with making it profitable. Public transport is a social service and profit should be the last thing on municipal authorities’ minds when it comes to it. Its multiple benefits – running the gamut from mobility to accessibility to better air – mean that the price riders are charged should not necessarily be equal with, let alone higher than the actual cost of the ride.
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