Thu, Apr 25, 2019 - Page 2 News List

Ministry outlines subsidies for buses, TRA

By Shelley Shan  /  Staff reporter

The government is planning to subsidize highway bus and train operators for losses on services in remote areas, the Ministry of Transportation and Communications said on Tuesday.

The Directorate-General of Highways last month said that due to a rise in costs, highway bus operators would be allowed to increase fares by 15 to 20 percent.

The operators had asked for 30 percent.

However, Minister of Transportation and Communications Lin Chia-lung (林佳龍) on Tuesday told reporters that operators would not increase fares, while losses incurred for providing services to people in remote areas would be covered by government subsidies.

Firms operating on profitable routes would be asked to provide services on less-profitable routes as well, Lin said.

The same principle would apply to the Taiwan Railways Administration (TRA), with its subsidies estimated to top NT$2 billion (US$64.8 million) per year, he said.

After a thorough review, the ministry found that while the operating costs of bus operators are indeed increasing, their operational efficiency is decreasing, Lin said.

Furthermore, fares are set using outdated formulas, he said.

“Highway buses operate on routes where MRT systems and city buses are not available, with some of them being in remote areas,” Lin said.

“Ridership rates are down as a result of the rise of other transportation systems,” he said.

The government should bundle profitable routes with the less-profitable ones, otherwise no operators would offer services in remote areas, he said, adding that any increases in fares in such areas would harm elderly people, students and economically disadvantaged people.

The government should consider subsidizing highway bus operators to ease the burden on travelers, Lin said, adding that the government should make it a policy to reduce the development gap between urban and rural areas.

As the state-run railway operator, the TRA has to operate less-profitable routes and is not allowed to terminate services because of financial losses, he said.

There should be a separate account for financial losses the TRA sustains for implementing government policy; it should not have to pay for the losses itself, he said.

Many lawmakers believe that just as Taiwan High Speed Rail Corp was saved from bankruptcy and eventually became profitable because the government invested NT$30 billion in it and extended its concession period to 70 years, the government should also cover the TRA’s losses, he said.

The TRA subsidies include NT$1 billion to cover losses from services in remote areas and NT$1 billion to cover revenue shortfall from providing discounted tickets to students and elderly people, Lin said.

Asked if this means the TRA would no longer increase fares, Lin said that the policy correlates with ticket price reform.

The agency’s new ticketing system is expected to boost train ridership and increase its operational efficiency, Lin said, adding that these factors would be taken into consideration when reviewing ticket prices.

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