The discussion around the probable increase in the bus tariffs raises some interesting questions. One of the most visible ones relates to the rise proper. Is it justified, and why? What would be the appropriate amount of that increase? Various sectors of the society and several legislators are demanding answers to those questions. The debate has not been too illuminating.
The main reason invoked appears to be that prices have not increased for many years – ten to be more precise. As an argument, it is not the strongest. Matters of transportation or social policy, urban management, or quality of life do not seem to deserve much attention here. However, this is a public service. Private companies provide it under a concession contract, presumably for some community benefit. The fact that the price of a public service has not risen for a period alone is not enough to justify its rise.
Some people might argue that reducing those prices might even be desirable. Cheaper public transportation services might provide an adequate incentive to decrease the usage of private vehicles. In a city increasingly mired in congestion and pollution problems that might be a part of policies designed to deal with the broader issues we alluded to above.
Another tack was to suggest the increase is not of much importance. Its effects will be limited as most people use prepaid cards, which benefit from reduced tariffs. Leaving aside that such may be the case now, but there is no commitment that the payment made with those cards will not raise in the future, then the question turns to be: why the trouble then?
Moreover, we could argue that the revenues of the region have increased immensely over time. Therefore, the costs of providing cheaper transportation services for the population might even be lighter today on the overall budget than before and generate savings elsewhere.
The figures presented mention the payments to the concessionaires reaching MOP110 million monthly, with some 80 million supported by the public budget (the rest comes from the tariffs collected). Admitting that is a fair payment for the services provided (something others might question), how much of a burden is it for the public coffers? It turns out that amount represents just about one percent of the revenues the government is getting from gambling alone every month – or approximately 7.5 hours of casino operation – nothing that cannot be achieved after a good night sleep.
*Economist and permanent contributor to MNA