THE Alliance of Concerned Transport Organizations (Acto) is proposing to the Department of Transportation (DOTr) and the Land Transportation Franchising and Regulatory Board (LTFRB), to implement the replacement of jeepneys under a phasing scheme instead of replacing the whole vehicle at one time.
Acto Chairman Efren A. de Luna said while the group agrees with the government’s Public Utility Vehicle (PUV) Modernization Program, the transport organization is asking the government to let jeepneys still working well and not over 15 years old be able to operate with just its engine being converted to meet the Euro-4 standards.
“[Under the] guidelines of the government’s PUV Modernization Program, there are many portions that lead to the phaseout [of jeepneys], that our sector cannot really handle. Our proposal is we are not for phase-out, but we do want modernization,” de Luna told the BusinessMirror over a phone interview.
De Luna who is also the national president of the organization said by simply changing an aspect of the vehicle or jeepney to improve it, is already one way of modernizing it. This is why they are proposing that the government do the modernization of the vehicles under a number of phases.
“For modernization, you do not have to modernize the jeepneys in the blink on an eye. There are 235,000 jeepneys with franchises, and 80 percent of those still bear a well-defined [vehicle] body. We are willing to replace first the engine and convert it to Euro-4, and then make minor improvements, like the addition of the CCTV [closed-circuit television],” he said.
Under the PUV Modernization Program of the government, implemented last month, the first step as done by the DOTr and the LTFRB was the issuance of the Omnibus Franchising Guidelines, which introduces reforms in granting franchises by implementing new-route planning rules and improved standards for operators and vehicles.
“That is why if we change our engines to Euro-4, it will also result to the vehicle’s being modernized. One reason why the government had this project is to address climate change and passenger-security issues. That is why if the body and chassis of the jeepney is still in good condition, why would you change it? Modernization should be in gradual phases,” he added.
According to Department of Finance estimates, a budget of P494 million was proposed for the conduct of route rationalization under the program which is included in the General Appropriations Act, while the entire program will cost around P417.3 billion over the next five years.
“The remaining 30 percent, that is where the government should focus on, since those are the dilapidated ones already that are not fit for the road anymore. So, at least, there is still modernization there,” he said.
Under the budget scheme, an estimated P17.3 billion would be earmarked from the first package of the Comprehensive Tax Reform Program ; P8 billion as equity-subsidy contribution of the DOTr for the procurement of new jeepneys; and P3.9 billion from the Office of Transport Cooperatives; P4.5 billion for the training assistance of the LTFRB and the Technical Education and Skills Development Authority; and P332 million for the management of the program.
While in terms of providing credit to jeepney operators who would have to adjust to the new jeepney units, the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) will provide credit of up to 95 percent for the cost of the jeepneys with the government shouldering 10 percent, the DOF said.
He said if the driver’s total loan from LandBank is at P1 million, 20 percent will be shouldered by the jeepney driver. The LandBank has already established a P1-billion credit facility to bankroll the project.
De Luna said ACTO is currently in discussions with a Chinese company, to further gather input in terms of coming up with a scheme where jeepney models can be financed at cheaper costs.
“Since we also want to help the government, we are conducting talks with foreign companies regarding public transport vehicles and its parts. The Chinese company offers vehicles with Euro-4 engines and is capable of accommodating 24 persons at an estimated price of P500,000 or half a million pesos, while the body is estimated at P300,000 which will still depend on the pattern used for the design of the jeepney. So around P800,000 [per unit] is the estimate, and we are trying to ask it to be lowered to P500,000, the total amount,” de Luna said.
The LTFRB, an inter-agency cooperation, has been established which includes the DOTr, Department of Energy, DOF, Department of Budget and Management, Department of Interior and Local Government, National Economic and Development Authority, and Department of Trade and Industry, to address the financial matters under the PUV Modernization Program.
“There are some companies that can directly provide loans for the drivers and operators. The one with LandBank, from the total loan you will take out, you have to pay 20 percent, where will we get 20 percent of that requirement of theirs?” he added.
De Luna said the Euro-4 engines and skeleton parts that can be used for the modeling of jeepney vehicles come from Japan but further developed and manufactured in China.
“The longest time for it to be done [uro-4 engine compliance] would be around a year, but as soon as we can buy Euro-4 engines here in the Philippines, the transport groups will be the ones to start implementing it among ourselves we will not wait for the government’s go-signal,” he said.
Earlier, DOF Undersecretary Karl Kendrick T. Chua said it will take some time before the PUV Modernization Program takes effect, as there are a lot of revisions needed to overhaul the complicated transport system in the country.
Chua said jeepney drivers will be able to loan from government financial institutions with the government subsidizing a portion of the equity.
“We won’t procure, the jeepeny driver will borrow from the government financial institution to buy it [the vehicle] and the government will subsidize a portion of the equity,” Chua told the BusinessMirror through SMS.
ACTO will hold a protest at 5 a.m. on Wednesday at the Quezon City Circle, to showcase jeepney vehicles still working properly need not be converted as under the PUV Modernization Program.
Image credits: Nonie Reyes