Sutiyoso says no subsidy for public transportation

JAKARTA (JP): Governor Sutiyoso rejected on Tuesday a suggestion that the city subsidize public transportation, saying that none of the 2001 city budget could be spared for such a subsidy.

"None of the 2001 city budget can be spared for a subsidy. We have made no preparations to address fuel price increases," Sutiyoso announced at City Hall.

He said bus fare increases would be unavoidable if the central government upheld its decision to raise fuel prices by an average of 30 percent this week.

He rejected City Council chairman Edy Waluyo's suggestion that a reserve fund amounting to Rp 420 billion (US$38 million) could be used to compensate for increased fuel prices.

The governor insisted that the reserve fund was only to be used in the case of a natural disaster hitting the city.

"Our finances are now very limited," he remarked.

This year's city budget is Rp 7.5 trillion.

Sutiyoso explained that even though bus fares would most likely be raised, the increase should be wisely calculated.

"If I had the option I would not raise bus fares, but I have no choice," Sutiyoso claimed.

Edy Waluyo suggested on Monday that the city administration use the reserve fund to subsidize certain bus companies in order to avoid fare increases.

He pledged that the council would reject any fare increase for regular buses, but said he would not object to a fare increase for air-conditioned buses, which are used by higher-income people.

The Jakarta branch of the Organization of Land Transportation Owners (Organda), which comprises 14 bus companies, is yet to propose a fare increase to the administration.

Organda executives said earlier that the increase in fuel prices would affect the operational costs of bus companies.

Besides raising operational costs, the fuel price increase would also push up the prices of bus spare parts.

The price of gasoline will increase to Rp 1,450 from the current Rp 1,150 per liter, automotive diesel to Rp 900 from Rp 600 per liter and kerosene to Rp 400 per liter from Rp 350.

The city has at least 20,000 big, medium and small public buses, of which only 35 percent currently ply the city's streets. The remaining are old and damaged buses that are no longer used.

The fares for public buses currently range from Rp 500 for regular non air-conditioned buses to Rp 2,500 for air-conditioned buses.

The city's program to replace damaged buses was shelved because no bank was willing to fund the purchase of new buses. Banks claim that current bus fares are too low, which would make it difficult for bus companies to repay loans.(jun)