DOTr clarifies issues against PUV Modernization Program

The Department of Transportation, through Undersecretary for Land Transport Mark de Leon today clarified some issues raised against the PUV Modernization Program of the government.

One big issue is financing the purchase of a modern PUV where those against the PUVMP have argued that there is no way the drivers who are members of transport cooperatives can pay for a P1.6-million to P2.2-million modern PUV. Their monthly loan amortization is estimated to be P26,000.

Usec. De Leon explained that the 5-6-7 loan programs of both DBP and Landbank are very liberal.

“It translates to a very low downpayment of only 5% and the government has a subsidy of P80,000 to cover this up to the price of not more than P1.6M. The annual interest rate is only 6% and the payment term is a long seven (7) years. And the estimated P26,000 monthly loan amortization? The driver will pay for this through a daily loan amortization of P800.00 to P1,000.00 collected through the Automated Fare Collection System that comes with the modern PUV.”

He added that the P800.00 to P1,000.00 daily loan amortization is almost the same as the boundary a PUJ driver pays to his operator under the current daily boundary system.

“So instead of giving the same amount to his operator, he gives it to the bank and in 7 years, the modern PUV will be his. This will not happen under the old daily boundary system even if the driver has paid 7, 10, 15 or even 20 long years to his operator. At the end of the day, he does not have to work hard for 16 hours yet still has more than enough left to take home. It is because the modern PUV generates extra income since it allows for some 6 to 8 standing passengers and the airconditioned comfort provided allows for a higher minimum basic fare. Also because it is brand new, there is much less lost income due to downtime due to break down and repairs.”

Another challenge facing the DOTr in the PUVMP implementation is the fleet consolidation of the many franchises in every route.

“The government is determined to have modern public transportation by end of the term of President Duterte in 2022, and that deadline set for operators to shift to authorized units will not be extended”, De Leon said. “By next year 2020, they will get a notice to modernize. If they still refuse to modernize, the DOTr will revoke the franchises of these operators and the government will open the franchises to other operators,” Usec. De Leon said.

He added that the DoTr will require operators running the same route to have to consolidate their fleet and franchises to do away with competition for passengers.

“Through such a scheme, operators can reduce their overhead cost per unit by consolidating their fleet in just one terminal and streamlining their operations. We can then start a program in which drivers are paid regular wages by operators who incorporate themselves into transport corporations. The current boundary system in which drivers remit a fixed amount to their operators daily result to cutthroat competition on the roads.”

De Leon also observed that commuting takes a long time because of the fragmented franchising system.

“An individual franchise holder can operate even just one unit under a daily boundary system. Drivers are forced to compete for passengers among themselves, to stop at every street corner and stay there until full. This results not only to long travel time for commuters but inconvenience to other motorists as well due to jeepneys obstructing street corners.”

The same is true at jeepney terminals or stops where commuters have to endure a long waiting time. “Drivers, when tired or already satisfied with their income, go home, leaving commuters waiting for a ride home, not knowing when the next jeep or UV Express will come. They say we lack empathy. I want to inform all those critics that we have been pushing for commuter first policy here at the DOTr.”

He explained further that another option to get into the PUVMP is for fifteen drivers to form a transport cooperative.

“With a bigger number, they could easily negotiate for volume discounts for the vehicle and parts with the modern PUV dealers. But really, to make the PUVMP work, we must have the support of the riding public too.”

Land Transportation Franchising and Regulatory Board chairman Martin Delgra III agreed and explained that the PUVMP is the biggest non-infrastructure program of the Duterte Administration.

“For so long as there is public support, strong popular support, the PUVMP will continue. With the private sector, we are now in the midst of a nationwide Modern PUV Caravan covering most major cities outside of Metro Manila. We bring down and discuss at the grassroots level the issues and concerns of the different PUVMP stakeholders. Here, we are getting encouraging feedback from all across the country that there is very strong support for it.”

In the end, De Leon said “that we can all shift to modern PUV, but without everyone of the various stakeholders on board, all of us stand to lose, most especially the commuting public who have been suffering for so long.”

“As one, let us send the message that the PUVMP is one of the best answers toward addressing the commuter problems in our country.”