Bus companies say they’re broke

BUS COMPANIES may fail to meet their loan and budget obligations because they have still not received a portion of their subsidies for last year, the House’s Communications Committee heard yesterday.

“There is a direct danger that companies will not be able to respond to their obligations in the next few months,” the Committee’s President Antonis Antoniou said. 

Buses running the routes as part of the Communications and Works Ministry public transport system get a revisable subsidy of €3 per kilometre. 

As part of the collective agreement with the Ministry, they get 20 per cent of the subsidy in June of the following year. 

However, they were not paid in June “creating a liquidity problem” said legal advisor to one of the bus companies, Nicos Papaefstathiou. 

“We collectively owe €40 million in debt,” Papaefstathiou told the House.  

Papaefstathiou told legislators “it would not be possible (for bus companies) to pay off the average cost per kilometre” given the government’s allocated 2012 budget of €46 million. 

Travelling one kilometre costs bus companies €2.9 on average. 

In addition to the €40 million debt, the Communications Ministry’s Road Transport has asked for €6 million, DISY’s Andreas Michaelides told journalists. 

That amount would be compensation to the bus companies made redundant under the new public transport system put into place in July 2010, Michaelides said.

He added that there was only €1.3 million left, which the House was told was already spoken for.  

Additionally, the buses are under an obligation to replace one third of their fleet with new buses by the end of the year. 

On an upshot, Road Transport Department’s Sotiris Kolettas said that the public had embraced buses. 

The system “started out at a very low fare of €1,” Kolettas said adding that if it was raised the increasing use of buses might be affected. 

Kolettas said however that the bus system still faced many problems.  “More time is needed to form more convenient routes (and) create bus routes,” Kolettas said. The house will continue discussing the bus system next week. 

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