LTFRB assures continuity of franchise consolidation
THE LAND Transportation, Franchising and Regulatory Board (LTFRB) assured the continuous franchise consolidation in line with the government’s public transport modernization.
Chairman Martin Delgra explained the LTFRB at present is applying a timeline and not a deadline for transport associations in the country to undergo franchise consolidation.
“There is what is called as a P.A. or Provincial Authority that will replace the individual franchises which means they will continue to exist, however, they would have to consolidate and become a cooperative just like the Cordillera Basic Sectors Transport Cooperative because other groups may surpass them who are willing, qualified and capable of running a route. But we have a plan and this is not a deadline but a timeline,” Delgra explained.
Under the modernization program of the government, all operators and drivers must form a cooperative and become accredited by the Office of the Transport Cooperative (OTC) as LTFRB earlier vowed to continue the process of modernizing public transportation amid the Coronavirus disease (Covid 19).
“Under the process of consolidation of franchise, the owner of the said franchise will now be under the ownership of the cooperative as compared to before when each franchise is owned by an individual. The implication here is that when it comes to financial capability to pay for a unit identified and agreed upon by the
cooperative, banks now will only recognize what a cooperative recommends,” Delgra added.
Delgra added one thing banks will have to look at is the financial viability of routes given to cooperatives, based on volume and distance or what LTFRB calls as route structure where a cooperative can see how much it can earn and how many units will be placed in a specific route.
LTFRB also issued memorandum circular 2020- 017 which sets the guidelines for public transportation in areas under general community quarantine (GCQ).
This memo requires consolidation of operators and the establishment of bigger coordinated fleets of PUVs.
Once the modernization takes effect, three shifts for drivers and conductors will be required, giving six people to be employed for one PUV with specific time slots for each shift. They will no longer rely on a daily income but monthly income from the cooperative.