Franchise consolidation ‘not slow’

Franchise consolidation ‘not slow’
(Photo by Yans Baroy)

THE Federation of Cebu Transport Cooperatives (FCTC) and the Land Transportation Franchising and Regulatory Board Central Visayas (LTFRB 7) have denied allegations by transport group Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide (Piston) Cebu that the franchise consolidation process under the Public Utility Vehicle Modernization Program (PUVMP) has been slow or that they are to blame for this.

In a phone interview on Wednesday, April 10, 2024, FCTC president Ellen Maghanoy told SunStar Cebu that the only pending applications they have are those that were submitted following the last extension of the franchise consolidation deadline last January.

She said operators have the freedom to choose which cooperative they can join and they have the discretion to withdraw their application in favor of another cooperative.

She said even members of Piston Cebu can consolidate among themselves to form a new cooperative or corporation.

In a separate interview, LTFRB 7 Director Eduardo Montealto Jr. said he has not received any complaints or concerns regarding the matter.

He said the first part of the consolidation is when an operator becomes a member of a transport cooperative or corporation. The transport cooperative or corporation then endorses the operator’s profile to the LTFRB.

He refuted Piston Cebu’s claim that an operator who applied to become a member of a cooperative in 2019 has yet to be consolidated.

He said transport cooperatives or corporations are mandated to inform the LTFRB of any pending application.

Discretion to deny

They also have the discretion to accept or deny membership subject to the submission of requirements, one of which is a clearance from the Land Transportation Office (LTO) and the LTFRB, he said.

“Maybe the operator has delinquencies or pending penalties. Of course, the cooperative will want to make sure an incoming member is legit. And if there are many of them who have pending penalties, maybe the cooperative cannot afford to pay on their behalf,” he said in Cebuano.

Montealto said fines and penalties may be for failure to file income tax and for unregistered public utility vehicle (PUV) units.

He said the penalties will reflect on the LTFRB’s system.

“If the operator fails to pay every year, the penalties will be compounded. They really have something to pay. That’s what the cooperatives are on the lookout for,” he said in Cebuano.

Maghanoy said that before joining a cooperative or corporation, it is the responsibility of operators or drivers to secure clearances from the LTFRB and the LTO.

She said they only require an operator or a driver to make a one-time payment of P500 for the membership fee.

“Once cleared, there’s no reason why they can’t be consolidated,” she said in Cebuano.

Leaving the group

Maghanoy said the last time the deadline was extended in January, some operators left the cooperative or corporation due to the uncertainty of the government policy.

These operators ended up deploying traditional jeepneys that compete with modern PUVs for passengers on major thoroughfares.

The LTFRB 7 director also said that if there was an ounce of truth to Piston Cebu’s claim, the agency would assist operators.

Montealto said there was a memorandum with a provision on the withdrawal of operators from the consolidation. But the withdrawal can only be done if the cooperative or corporation only has a provisional authority or if it doesn’t have a franchise, he added.

Meanwhile, Maghanoy said the progress of the PUVMP, which was launched in 2017, has been delayed due to the constant extension of the deadline of the consolidation.

Under the PUVMP, operators, particularly those with fleets of traditional jeepneys, are mandated to join or create transport cooperatives or corporations through a consolidation process.

“The President himself has said there won’t be an extension. So now we can say the government is really serious about implementing the PUVMP if it’s true that the deadline won’t be extended,” Maghanoy said in Cebuano.

Montealto said Central Visayas posted a consolidation rate of around 89 percent, as of this month. Nationwide the consolidation rate is 80 percent, he said.

Montealto urged traditional jeepney drivers and operators to approach offices of various transport cooperatives and corporations to consolidate before the deadline.

No extension

On Wednesday, President Ferdinand Marcos Jr. announced that the government will not extend the April 30 deadline for the consolidation of PUVs under the PUVMP.

The PUVMP aims to improve the country’s transport system by phasing out jeepneys, buses and other PUVs that are at least 15 years old and replacing them with safer, more comfortable and more environmentally friendly alternatives.

It was originally targeted to be implemented in 2020, but it has been repeatedly delayed due to the coronavirus disease (Covid-19) pandemic and protests of several transport groups.

Last January, after several extensions, Marcos approved the Department of Transportation’s recommendation to extend until April 30 the deadline for the consolidation, which is the initial stage of the PUVMP.

By consolidating, PUV operators are required to join transportation cooperatives or corporations. These cooperatives have two to three years to replace their vehicles with the modern units that have at least a Euro 4-compliant engine or an electric engine to lessen pollution. They will be able to receive government subsidy, which is between P200,000 and P300,000 per vehicle, to help them cope financially, as well as access to bank financing.

On Wednesday, Marcos reiterated the April 30 deadline, saying: “Sa kahuli-hulihan, wala na pong extension ‘yung (consolidation). Kailangan na kailangan na natin ‘yan.”

(There will be no more extension for the consolidation. We really need that.)

He assured that the PUVMP would not be a burden to drivers and operators.

“Ang tinitiyak lang namin, hindi na mapabigat pa ang babayaran at iuutang ng driver-operator kaya ginagawa nating maayos at well organized ‘yung sistema na ‘yan,” Marcos added.

(The only thing we are ensuring is that the driver-operator will not have to pay and owe more, so we are making that system sound and well organized.)

Marcos’ call echoed LTFRB Chairman Teofilo Guadiz III’s reminder on Tuesday for jeepney drivers and operators to consolidate before the April 30 deadline.

“Again, I have to reiterate, it’s only until April 30. We need to consolidate because that is the first part of the modernization program,” said Guadiz in a statement Tuesday.

He said the extension granted by Marcos is the last, stressing that those who will not comply with the program will see their franchise revoked by the LTFRB.

“So we are asking now the jeepney operators to avail [themselves] of the last extension because come April 30, we will no longer allow those who did not consolidate to ply routes,” he said.

Several transport groups have opposed the PUVMP, saying it will bury them in debt as they could not afford the modern units. They said hundreds of transport sector workers will be displaced as jeepney operators and drivers that have not complied with the program can no longer ply their routes. This, they said, will exacerbate the worsening economic situation amid the soaring unemployment. / EHP, LMY


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