Friday, November 23, 2007

Public Transportation in Chile : Working with the wrong assumptions (II)

A couple of considerations about the mass transportation system in Chile , known as "Transantiago".( a better name would be "Transexpress"). First ,Working with the wrong assumptions in the first stage, requires a careful approach on the next stage , which is the crucial one to make it a feasible project , on the mid term time span. Otherwise ,the situation can get out of control. Secondly, precisely because of such considerations, following the House of representatives in the Chilean congress , the Senate did not approve the financial resources neededfor the year 2008, which were asked by the Government .The Senate, in a joint partnership of both sides of the political spectrum; the opposition and the current coalition government supporters, are demanding a new and different law with specific and detailed explanation of every aspect of the working plan of the system, instead of being part of the public budget for the next year, just as one more within of a lot ofdifferent sources of expenditures . Therefore the mass transportation system in Santiago (Chile) which generates losses of U$$35 million monthly , do not have the financial resources at the require level, to keep fee at its current level and to increase the fleet. The authorities have ruled out the chance of increasing the cost for commuter, as an alternative source of financial resources. Thus ,the question now is: What is next? .
Although with the participation of the private sector on technical matters(software design) , and some operational areas of mass transportation, the whole project is a State designed one .This is the critical point, because it seems clear that it is beyond its current available options, for the state to go alone with the remaining phases of the project . Therefore the whole project, not just part of it, should become a joint venture between the state and the private sector. The previous experience with firms which have been managed by the State ,is not encouraging enough to support enthusiastically the request for additional money, at least no without some control mechanism or specific justification for it. This project, the way it is right now, could become in the near future, a permanent high demand of public resources project .
The payment system applied so far, could also require some adjustment sometime into the future , taking into account different options of commuters transportation, such as the express line(faster than average with fewer stop), the frequency of traffic (The more often commuters use the system ,the lower the fee) , and the volume of combinations , ( The more combinations the lower the fee),along with the size oif the market (population areas), (The larger the market ,the lower the transportation fee).The current fee system, is hardly affordable in the long run, mainly because the rate of commuter future demand for mass transportation might increase,( it is supposed that commuter will left their car at home),which will imply faster depreciation of current fleet, and higher operational cost because of oil prices increases,plus higher cost for unfrastructure facilites. Sooner or later, there will be additional requirement for more money, which tax payers not longer can support,speacilly whether the quality of service does not improve substantially. Subsidy to the poor would be an option, to take into account,such that the burden of keeping the system working ,is well distributed among commuters different incomes level.-
The fact of the matter , is that the new mass transportation system proposed, is an expensive one, which sooner or later commuters will have to pay the real cost. Anything different to this reality, would the worst of the assumptions.-

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