Transport service contracting

by Boo Chanco (The Philippine Star), 12 May 2021

It has been about 500 days since we have been under lockdown. That sounds like a long time to be cocooned in our caves.

If I was a sociable person or if I was young enough to have to earn a living for my family, I might have been nuts by now. Life would have been more challenging.

I must confess I have not been on EDSA for over a year. I can see the traffic flow on C-5 from my window and it has been flowing most of the time. There are bad days, too, but not as regularly bad as it was pre-Covid.

Since C-5 is used by a lot of trucks, I worry that not seeing the usual volume of trucks is bad news for the economy. The number of trucks on the road is like a thermometer that measures the economy’s health, and it looks bad.

But folks tell me that EDSA traffic flow, specially for private cars, has been as heavy as in pre-Covid times. No wonder, my friend and fellow columnist, Sara Soliven de Guzman, reacted badly to a statement of DOTr Sec. Art Tugade that EDSA’s traffic flow had seen marked improvement.

“Tugade bragged that EDSA improved… no more traffic? I still don’t see any improvement on EDSA. I am on EDSA every day, and once a week from Quezon City to Alabang. Less people on the road, but still traffic.”

Maybe, Tugade was talking about the sharp decline in commute time for the bus riding public since they introduced the busway.

I guess Sara, and many other folks who reacted badly, are talking about the experience of those using cars on EDSA.

Tugade had been proud of his busway project. I am told, the busway has cut travel time of bus riding commuters to just 45 minutes from Monumento to PITX, and only 25 minutes from EDSA North Avenue to EDSA Ayala.

By local standards, Tugade has conjured a miracle for EDSA commuters who do not drive their own cars. But the busway is still a makeshift solution. So much work has yet to be done. Those physical barriers are ugly, are dangerous, but necessary.

The idea is to discourage the owner driven car transporting only the owner.

Credit Tugade for taking advantage of the pandemic restrictions to do what should have been done with all the buses on EDSA a long time ago. It was a royal mess before with so many independent bus operators and their pasaway drivers fighting for passengers.

Tugade’s busway restricts the buses to the busway. The number of buses that are dispatched is determined according to need, now at 200 units rising to 500 units when demand normalizes. There were 3,600 buses on EDSA pre-Covid.

The drivers are now paid salaries. No more boundary system that is at the root of the chaos on EDSA. DOTr has instituted the service contract system.

Through the service contracting program, the government guarantees enough money for bus operators to run their buses and pay salaries to their drivers. Transport experts say service contracting will solve the transport crisis and mitigate future ones.

Economist Robert Siy explains how it works:

“This means offering transport operators long-term performance-based contracts to deliver a service reliably and efficiently. Government shoulders most, if not all, of the financial risk.

“Operators deliver the service based on agreed standards without relying on ridership. This is how public transportation is organized in the most livable cities around the world; this is also how it should be organized in the Philippines to deliver a high-quality service.”

It has been 10 months since DOTr introduced service contracting. It seems to be working, but as Siy reports, there have been serious problems because LTFRB, the agency mandated to implement it, seems at a loss on what to do.

“Budgets to introduce service contracting have been provided under the Bayanihan Recover As One Act or Bayanihan 2 (P5.6 billion) and under the 2021 General Appropriations Act (P3 billion), but progress has been extremely slow after more than nine months.

“Based on LTFRB’s own report, as of May 4 only P46.1 million, or less than one percent of the budget provided under the Bayanihan Recover as One Act has been paid out.

(UPDATE: From Sec Tugade’s report to the Management Association of the Philippines (MAP) yesterday, they have disbursed P169 million for service contracting as of May 6.)

“Although there are over 170,000 bus and jeepney drivers nationwide, the program has been able to register only 38,097 drivers and has given orientation to only 26,721 of them under the program, also as of last May 4.”

The National Confederation of Transport Workers’ Union has expressed wholehearted support for the program, but lamented that many of their members were experiencing long delays in receiving payouts under the program, some requiring over four months to be paid.

If this is the case, LTFRB officials must be made to account for the dismal performance. Maybe it is because this is a change of responsibility for what was before a purely regulatory function. LTFRB has also never been known for being client-oriented.

I agree with Siy that if Tugade wants this program to succeed in and beyond EDSA, he must deploy more reliable staff of DOTr to help LTFRB staff.

“Payment systems need streamlining. Electronic monitoring of PUV performance should be activated, fine-tuned, and applied consistently. There needs to be regular feedback from and communication with the public transport industry to resolve implementation issues and build a common understanding of the program.

“The period for utilization of the funds under the Bayanihan 2, which currently ends on June 30, 2021, should be extended until end 2021.”

Economist Siy is right. Tugade has a key role to play in ensuring economic rebound soonest.

“If workers are unable to get to work, basic services and businesses are not able to function. Enterprises without workers (or with workers that experience exhausting daily commutes) will eventually fold up, perpetuating the downward economic spiral.”

The virus and its variants are already causing an economic downturn. Tugade can help turn the tide.