JUTC using workers' taxes to run operations Hot

Daraine Luton, Senior Staff Reporter

THE STATE-RUN Jamaica Urban Transit Company (JUTC) has been illegally using money taken from its employees to operate the company.

"JUTC did not remit statutory deductions, which totalled $4.9 billion as at August 31, 2011, to the relevant authorities," Auditor General Pamela Monroe Ellis wrote in her latest report tabled in Parliament on Tuesday.

"Of the $4.9 billion, $1.2 billion relates to the National Housing Trust and the National Insurance Scheme," the report added.

Monroe Ellis said the company was advised that the failure to remit statutory deductions not only breaches the relevant acts, but it will deprive the employees of their benefits.

The JUTC has pointed to the uneconomical fares it collects as well as an inadequate subvention from Government as factors which severely retard its operations.

In the auditor general report, the JUTC is said to have said "it continues to grapple with insufficient fare revenue from operations, and an unrealistic subvention to cover the gap in its operating costs."

The JUTC subvention from the Government was cut from $600 million in the 2010-2011 fiscal year to $450 million this fiscal year.

The company is only allowed to charge $80 for adult fares, which is $50 less than the fare recommended by the Office of Utilities Regulation (OUR).

The OUR had also recommended a fare of $40 for concessionary passengers such as children and pensioners, which forms 45 per cent of the load. Concessionary passengers now pay $20 per ride.

"The uneconomic fare, our levels of subvention and the fact that other people pick up our passengers are what are killing the JUTC," Paul Abrahams, managing director of JUTC has said.

In the meantime, the auditor general has found that the bus company's record keeping could be undermining its efficiency.

"We found that the company did not maintain a history of the repairs, maintenance and fuel transactions for its fleet of vehicles.

"This is in direct contravention of the Ministry of Finance's policy, which requires that an operational-efficiency record be maintained for all fleet vehicles. In the absence of this, the JUTC has compromised its ability to readily determine whether a vehicle is operating economically," the auditor general wrote.

She has also said the JUTC officials breached the law by not reporting to her 1,231 instances of accidents involving the company's buses and an additional three accidents involving fleet vehicles, which occurred during the period April 2009 to August 2010.

As at March, outstanding accident claims against the JUTC stood at $614.3 million, the auditor general said.

Further, she said the relevant officers at the JUTC did not submit receipts to verify the payment of $624,308 as being bona fide.

daraine.luton@gleanerjm.com