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Vestnik Kavkaza, Russia
Jan 30 2015
Yerevan City Hall tries to turn surplus profit into bigger surplus profit
30 January 2015 - 11:34am
Susanna Petrosyan, Yerevan. Exclusively for Vestnik Kavkaza
Another problem will soon appear in the complex of problems of the
Armenian economy: the increase in public transport ticket prices in
Yerevan. City Hall plans to transfer management of the capital's
public transport to a private operator. According to the mass media,
another attempt to increase ticket prices is hidden behind the deal.
In July 2013 Yerevan City Hall decided that the prices for tickets on
public ground transport in the capital should rise by 50%. It was
planned to increase ticket prices for minibuses and buses from 100 to
150 drams; for trolleybuses - from 50 to 100 drams ($1=470 drams). Due
to a powerful protest movement, City Hall had to reject the plans.
However, the growth of ticket prices is still acute.Considering
statements by officials who try to prove the necessity of increasing
ticket prices, the problem stays on the agenda of City Hall. Thus, the
decision by the capital authorities to maintain the old prices in 2013
was only a temporary concession.
2014 was marked by protests of transport service workers, primarily
drivers of minibuses, who demanded to increase ticket prices to 300
drams. They explained their demands by the fact that the current
prices didn't cover the revenues of transport services, including
taxes, purchasing repair parts, fuel.
Last year Yerevan City Hall presented calculations to justify a growth
of ticket prices. According to them, the cost of transportation of 1
passenger by microbus is 138 drams, by bus -149.8 drams. According to
experts of the City Hall, considering the number of transported
passengers, owners of one minibus lose 80 million drams annually under
ticket prices of 100 drams; as for owners of buses, they lose at least
125 million drams. However, some economists pointed out that City Hall
calculated that one microbus carried only 15 passengers in one round,
while one bus carried 30 passengers. And this is not true.
The former mayor of Yerevan, Vaagn Khachatryan, suggested they take a
minibus and count how many people it carries to the final stop. "These
are shadow sums of the minibuses' owners - $12-5 thousand every month.
And I mean one route only. If ticket prices grow, their revenues will
grow by 20-30%."
Experts state that City Hall's calculation of the sums which are
necessary for purchasing repair parts are overvalued seriously, as
well as drivers' salaries of 150-200 drams, as in reality a bus driver
earns about 80 thousand drams. The real balance between the suggested
ticket prices and gas prices in gas stations also contradicts the
logic of the calculations. The authorities included all the risks in
their ticket price, including an interest rate on loans which owners
of minibuses had to pay from their profit.
"City Hall is trying to turn the existing surplus profit into bigger
surplus profit. This is the result of a merger between business and
political power," lawyer Karen Mezhlumyan thinks.
According to the Armenian mass media (nobody has disapproved the
information yet), microbus routes N5 and N32 are controlled by Taron
and Robert Company, i.e. the mayor of Yerevan Taron Margaryan and his
relative, an MP. The mayor also owns minibus line N20. Several routes
in the Achapnyak Community belong to the family of the speaker of the
National Assembly Galust Saakyan; both his sons are top officials.
Several minibus lines belong to oligarchs Ruben Ayrapetyan and Samvel
Alexanyayn.
It appears that transport routes belong to numerous private owners. In
other cities of the world only 2-3 companies are involved in the
public transport sphere, rather than several dozen of them. Public
transport should provide high-level services and security; it
shouldn't be aimed at getting surplus profit. The system needs a real,
transparent tender, but this is impossible in modern Armenia.
Thus the increase of ticket prices will be another problem in the
complex of social problems, along with the devaluation of the dram,
growing food prices, and a planned growth of electricity power prices.
http://vestnikkavkaza.net/articles/economy/65486.html
Jan 30 2015
Yerevan City Hall tries to turn surplus profit into bigger surplus profit
30 January 2015 - 11:34am
Susanna Petrosyan, Yerevan. Exclusively for Vestnik Kavkaza
Another problem will soon appear in the complex of problems of the
Armenian economy: the increase in public transport ticket prices in
Yerevan. City Hall plans to transfer management of the capital's
public transport to a private operator. According to the mass media,
another attempt to increase ticket prices is hidden behind the deal.
In July 2013 Yerevan City Hall decided that the prices for tickets on
public ground transport in the capital should rise by 50%. It was
planned to increase ticket prices for minibuses and buses from 100 to
150 drams; for trolleybuses - from 50 to 100 drams ($1=470 drams). Due
to a powerful protest movement, City Hall had to reject the plans.
However, the growth of ticket prices is still acute.Considering
statements by officials who try to prove the necessity of increasing
ticket prices, the problem stays on the agenda of City Hall. Thus, the
decision by the capital authorities to maintain the old prices in 2013
was only a temporary concession.
2014 was marked by protests of transport service workers, primarily
drivers of minibuses, who demanded to increase ticket prices to 300
drams. They explained their demands by the fact that the current
prices didn't cover the revenues of transport services, including
taxes, purchasing repair parts, fuel.
Last year Yerevan City Hall presented calculations to justify a growth
of ticket prices. According to them, the cost of transportation of 1
passenger by microbus is 138 drams, by bus -149.8 drams. According to
experts of the City Hall, considering the number of transported
passengers, owners of one minibus lose 80 million drams annually under
ticket prices of 100 drams; as for owners of buses, they lose at least
125 million drams. However, some economists pointed out that City Hall
calculated that one microbus carried only 15 passengers in one round,
while one bus carried 30 passengers. And this is not true.
The former mayor of Yerevan, Vaagn Khachatryan, suggested they take a
minibus and count how many people it carries to the final stop. "These
are shadow sums of the minibuses' owners - $12-5 thousand every month.
And I mean one route only. If ticket prices grow, their revenues will
grow by 20-30%."
Experts state that City Hall's calculation of the sums which are
necessary for purchasing repair parts are overvalued seriously, as
well as drivers' salaries of 150-200 drams, as in reality a bus driver
earns about 80 thousand drams. The real balance between the suggested
ticket prices and gas prices in gas stations also contradicts the
logic of the calculations. The authorities included all the risks in
their ticket price, including an interest rate on loans which owners
of minibuses had to pay from their profit.
"City Hall is trying to turn the existing surplus profit into bigger
surplus profit. This is the result of a merger between business and
political power," lawyer Karen Mezhlumyan thinks.
According to the Armenian mass media (nobody has disapproved the
information yet), microbus routes N5 and N32 are controlled by Taron
and Robert Company, i.e. the mayor of Yerevan Taron Margaryan and his
relative, an MP. The mayor also owns minibus line N20. Several routes
in the Achapnyak Community belong to the family of the speaker of the
National Assembly Galust Saakyan; both his sons are top officials.
Several minibus lines belong to oligarchs Ruben Ayrapetyan and Samvel
Alexanyayn.
It appears that transport routes belong to numerous private owners. In
other cities of the world only 2-3 companies are involved in the
public transport sphere, rather than several dozen of them. Public
transport should provide high-level services and security; it
shouldn't be aimed at getting surplus profit. The system needs a real,
transparent tender, but this is impossible in modern Armenia.
Thus the increase of ticket prices will be another problem in the
complex of social problems, along with the devaluation of the dram,
growing food prices, and a planned growth of electricity power prices.
http://vestnikkavkaza.net/articles/economy/65486.html