To pay more for going on Economic commentary

The Chisinau Municipal Council (CMC) is to examine the situation in public transport in the Moldovan capital at a next extraordinary sitting, while the question if the travel tariff for the three kinds of transport – trolley, bus and minibus – change is a question that must be answered. After having vainly asked CMC more than once to increase the travel tariffs, transporters table this time a draft strategy on development of public transportation that includes a methodology of calculation of transportation tariffs and a modality of subsidising socially vulnerable layers. Municipal councillors have demanded a document in this respect for a long time. According to CMC members, the approval of tariffs without a clear strategy would maintain the condition of transport at the present level. Bird from fence and bird in hand Both sides have commented on the tariff calculation methodology for the three types of transport. Transporters asked that they be able to establish the tariffs in dependence of the fuel price. They argue that Moldova guides itself on a market economy and service providers should establish the tariff. However, the authorities claim that the tariff policy in the area is their prerogative and they do not want to cede it somebody else. Nor they share opinions as regards the facilities in municipal public transportation for socially vulnerable people. The municipal authorities called more than once for introduction of nominative compensations, in order to make order in the facility system, but the fulfilment of this objective is problematic. The local public administration has proposed for retirees, for example, that the compensation be equal with the cost of a two-way ticket. Also, it admits that holding the money in their hands, retirees will not pay the ticket in public transport under different excuses. The municipal transportation enterprises share this opinion. The adoption of a strategy in this regard was not the only condition for higher tariffs. Councillors also insisted that the passenger transportation be in a good condition in general, services be qualitative, while minibuses transport passengers on seats alone. The last condition has raised dissatisfaction among owners of minibus routes, which fear that their revenues would decline this way. Municipal councillors indicated the transport from other cities of the world, where the transportation system is well-developed, when transporters sought higher prices of tickets in public transport. However, they forgot that the travel tariff in those countries is much higher than in Chisinau, all passengers pay for travel, while the price of fuel is comparable. Some foreign experts have also been surprised by unchanged tariffs when the fuel price has grown much. Councillors invoked many reasons in favour of maintenance of the present tariff, while one of them was the fear that the „impact would be too heavy for some categories of passengers and the population is not ready for higher prices in general.” A survey conducted during protests of private operators of minibus services in connection with delayed decision on higher tariffs in October showed that most of passengers regard the demand for higher tariffs as grounded and they are ready to pay the 3 lei demanded by transporters instead of waiting for long time at stations. Silence before storm? Owners of minibuses keep silence for a couple of months, but the urban bus operator (PUA) and the Chisinau power transportation agency (RTEC) do not do the same. Public transportation enterprises, especially PUA, continued to seek higher travel tariff. PUA chairman Anatol Gheorghita said that the present tariff makes the enterprise suffer big losses and it cannot improve the financial situation of the operator. He noted that the rise of the tariff from 1.25 up to 2.00 lei would allow the operator to raise about 8 million lei a year and, therefore, its economic condition would improve. As regards the owners of minibuses, the chairman of the Association of Private Transporters, Ion Mamaliga, municipal councillor, said that they wait for presentation of the strategy to CMC and they will shortly stop their work, if CMC refuses to increase the tariff up to 3 lei. According to a study released in January 2006, private transporters cover at least 49 percent of transportation in the Chisinau municipality. RTEC and PUA, which cover 42 percent and, respectively, 7.7 percent of transportation in the capital will simply be unable to handle the additional inflow of passengers. PUA has 190 buses, of which 152 can be used. As many as 276 out of over 360 trolleys travel in the Moldovan capital at present. At the same time, there are 1,800 minibuses and more than 3,500 motorists who drive them. There are many needs CMC has given green light to the purchase of 20 new buses and 20 new trolleys from the money allocated by government, in order to complete the transportation means, but these are not enough. The municipality does not solve this problem even if it signs a final contract with the Belgian company Primevision, which intends to supply 100-150 trolleys for free and within five years. RTEC chairman Victor Martaniuc told journalists that his enterprise needs 400 new trolleys because most of trolleys of RTEC are in a bad technical condition and their exploitation term has expired. Thus, several years are needed to ensure the necessary number of trolleys to RTEC since no other philanthropists have joined the transportation market in Chisinau and the population of the capital – which counts for one million people at present – continues to grow. CMC is set for a sitting on February 23. The transportation issue was not included in the agenda for this sitting last week. However, it could be included in the additional agenda of the Thursday sitting, the way it has happened in the past. The drafting of the strategy on development of public transportation in Chisinau by Business Consulting Institute in cooperation with public transportation enterprises and the directorate for public transportation and communication of the capital, was possible due to an external grant. The developers of this document said that an eventual rejection of the draft strategy could make donors not to finance project on development of transportation infrastructure in the Chisinau municipality anymore.

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