Changing mindsets in modernization plan

ONE obstacle to the program to modernize public utility jeepneys is the need for drivers to change mindsets about getting bank loans and becoming investors themselves.

The government’s Public Utility Vehicle (PUV) Modernization Program launched last June and the omnibus franchising guidelines (OFG) of the Department of Transportation showed laudable goals. Replace old jeepneys with new units, even environment-friendly ones, encourage franchise holders to unite under a cooperative or a corporation, and get access to bank loans to finance the purchase of new units.

But most of the opposition to the modernization program lies in the immediate effect, the loss of livelihood, for thousands of drivers who would have to stop driving until they get a new unit or a loan to buy one.

Organized operators and drivers who went on a transport strike Monday said the program was anti-poor as one would need at least P1 million to get a new unit. Other transport organizations that did not join the protest action reportedly were in favor of modernization or they needed more time to study the program’s implications.

The program aims to retire some 200,000 jeepney units across the country that are 15 years old or more and have them replaced by vehicles that are at least Euro-4 compliant or eco-friendly units with solar panels on their roofs. The new vehicles have to be accessible to senior citizens and persons with disabilities and must have CCTV cameras, dashboard cameras, GPS navigation system, automatic fare collection system, and Internet connection.

The guidelines for franchising includes a financial scheme to be made available to jeepney operators and drivers who wish to get new units through financing of government financial institutions.

The Development Bank of the Philippines will have a P1.5-billion loan facility for jeepney cooperatives and the Land Bank of the Philippines will make available a financing scheme worth P1 billion for individual jeepney operators. These financing schemes will allow franchisers and drivers to own new units.

A Department of Transportation statement Monday said, “The financing package for acquisition of new units endorsed by the Department of Finance is very generous – as low as five percent equity, six percent interest rate, and a repayment period as long as seven years. On top of this, government will offer as high as P80,000 subsidy per unit to cover the equity payment.”

It added, “All business models based on actual studies ensure profitability to drivers or operators, even if they avail themselves of the financial loan package offered by government financial institutions.”

With their loans, either as individual or group borrowers, they would have to comply with payment terms and schedules, and face the consequences should they fail to pay.

Operators may be more familiar with such obligations than some drivers but the modernization program will require a new mindset over new roles.