Development & Aid, Economy & Trade, Headlines, Latin America & the Caribbean

ARGENTINA: State Subsidises Poorly Functioning Privatised Subway

BUENOS AIRES, Jan 22 2009 (IPS) - On weekdays in the Argentine capital, 1.5 million people use the subway, which was the first underground train system in Latin America and the 13th in the world. But while it remains an affordable means of transportation, it is the target of myriad complaints.

Rush hour traffic jams in greater Buenos Aires, home to 13 million people, can be a major problem. Because of that, and the relatively low fares, the number of people using the “subte”, as the metro, tube, underground or subway is known in this city, has grown 50 percent since the mid-1990s, according to information provided to IPS by the Metrovías company, which runs the system.

The powerful local Roggio business group holds a more than 90 percent stake in Metrovías.

A report by the city’s public services regulatory agency found problems in the subway with lighting, signs, accident prevention and trains that do not arrive on schedule, in that order.

Some of the problems mentioned in the 2008 entries in the Metrovías book of complaints include severely overcrowded trains at peak hours, intense heat in the summertime, malfunctioning escalators, a lack of information when there are problems like trains that do not show up, closed bathrooms, obstacles for the disabled, mistreatment by employees, and filth and grime.

However, not only the subte has come under the scrutiny of consumer defence groups, but the public transport system as a whole.

The urban, interurban, land and air transport systems, nearly all of which are in private hands, are plagued by problems of all kinds while the state has failed to ensure that the companies fulfil the terms of their concession contracts, according to critics.

Ariel Rochetti, a delegate for the trade union representing workers on the subte’s Lìnea B (B Line), told IPS that “80 percent of the trains are at least 30 years old,” and the company “has failed to invest in maintenance of the trains and the tracks.”

The subte in Buenos Aires began to operate in 1913, when there were just 13,650 registered motor vehicles on the city’s roads. Today there are six subway lines. The newest, the “H Line”, began to function last year.

With just 44 kilometres of rails and 76 stations, the subte has fallen far behind the subway systems of cities like Berlin, Paris and New York, which had underground train systems a few years before Buenos Aires.

Expansion of the subte continued apace until the 1940s, but after that, periods of stagnation alternated with periods of slow growth.

But there is also a steep difference in fares. A ticket for the Buenos Aires subte costs 31 cents of a dollar, compared to two dollars for a ride in New York, or 60 cents in Chile, which in the last 19 years has built the largest subway network in South America, which will have a total of 105 kilometres of tracks in 2010.

And in Buenos Aires, pensioners and school children ride free.

The privatisation of the subte in 1993, carried out by the government of Carlos Menem (1989-1999), of the right wing of the governing Justicialista (Peronist) Party, marked a watershed in the subway’s development and expansion.

Although the state-run Subterráneos de Buenos Aires subway company continues to own the tracks and the stations and is in charge of any expansion of the system, Metrovías holds the concession to operate the service, one of the few in the world run by private companies.

Under the privatisation agreement, the concession holder was to provide the service and maintain the trains and tracks in exchange for ticket revenue and the earnings gained from the rental of advertising space.

In the first three years, the stations were renovated and advertising space was expanded to the maximum. But in the process, murals and wall tiles of enormous artistic, cultural and historic value were damaged or destroyed. Later restoration projects and new works partially repaired the damages.

Metrovìas is to pay a concession fee for running the subte, which was profit-making up to the 1980s, while the state is in charge of investing in infrastructure.

The contract established that if the system showed a loss, the state would cover it with subsidies, which it eventually had to do.

As soon as it took over the subte, Metrovías drastically reduced the hours during which the trains ran, with the last one pulling out at 22:30 every day. It also put in place tighter controls at entrances to the subway.

Trains became more punctual, and an increase in the number of subway cars, provided mainly by state funds, made it possible to expand the service frequency. In 1999, the contract was renegotiated and extended until 2017, despite the opposition of many non-governmental organisations and much of the general public.

The system of state subsidies to public transportation concession holders has been in place in Argentina since the country’s late-1990s recession. The companies receive enormous sums from the state to keep fares low.

In addition, the 2002 “railroad emergency” law enabled Metrovías to get out of paying for maintenance tasks that were its responsibility.

Metrovías, which closed its books in the black in the last two fiscal years, received 116 million dollars in government subsidies in 2008.

Subte workers complain that the government of Cristina Fernández, of the centre-left wing of the Justicialista Party, does not make any demands in exchange for these funds. The government’s transport officials are holdovers from the administration of her predecessor, her husband Néstor Kirchner (2003-2007).

“The whole thing has to do with a series of ‘arrangements’ between the government and the company, and the discretional handling of funds, as we have denounced,” said Rocchetti.

The trade unionist added that “those of us who fix the subway cars know what state they’re in.”

The combative trade union that groups 4,000 Metrovías employees has been headed for the last few years by unionists affiliated with Trotskyist and social democratic parties, unlike most of Argentina’s unions, which have historically identified with the traditional wing of the Peronist party.

Some of the complaints by subte riders have to do with the frequency and unpredictability of strikes and other measures by subway workers, whose effects can be felt several weeks a year.

Rochetti admitted that this was a problem. “We have learned that you cannot just bring a dispute to the terrain of confrontation in the case of a public service, and that we must have a policy aimed at passengers, with campaigns, signs, pamphlets and press conferences, to announce our actions and explain our problems,” he said.