"The financial situation of companies is terrible."

Samir Oliveira
On the 21 - The executive manager of the Passenger Transport Association (ATP) and the Porto Alegre Bus Companies Union (SEOPA), Luiz Mário Magalhães Sá, states that the financial situation of private public transport operators in the capital is "terrible." He explains that this is partly due to the city government's compliance with a ruling by the State Court of Auditors (TCE) last year, which mandated that the fare adjustment calculation consider only the operating fleet of buses – not including the reserve fleet, as was done until then.

As a result, the fare ended up being raised by a smaller amount than the companies wanted. And yet, also in 2013, the fare increase was overturned by the courts, amidst a large social mobilization against the adjustment, with thousands of people in the streets.

Luiz Mário reports that ATP disagrees with the TCE's interpretation and warns that there is a lawsuit filed by the companies in court to demand reimbursement from the city hall due to what they consider an erroneous calculation of the fare adjustment. “The (financial) situation is beyond worrying, it's terrible. The companies are unable to renew their fleet of vehicles, neither in 2013 nor in 2014. This will lead to a deterioration and poor service; we've seen this movie before during the interventions,” he said.

The businessman also states that ATP disputes the data summarized in the TCE report regarding the inspection of the fare spreadsheets. The document found, among other things, that the profitability of the companies is far above the percentage foreseen in the fare adjustment. “We completely contest this. Determining, defining, and indicating a company's profit based on its balance sheet does not mean that that profit is solely due to fare collection. There is a freedom for each company, and this is part of our system, which is a capitalist system, to manage resources in the way that best suits them. If some companies manage resources better, that's a matter for that company,” he argues.

Luiz Mário also says that the companies will seek reimbursement from the city hall after the bidding process for the sector – which has never happened in Porto Alegre and, by order of the Court of Justice, the tender notice must be published within 30 days. He argues that the public authorities should reimburse the private operators for investments that have not yet been paid for through fare collection.

“The bidding process is very welcome to us because it will clearly regulate our relations with the public authorities, avoiding problems like the one that is occurring. What we have stated, and this was even the subject of an extrajudicial notification to the city hall last year, is that our law is clear when it determines that companies must be reimbursed and compensated for all investments they have made at the city hall's behest over the years that have not yet been fully paid,” he explains.

As examples of compensation that would have to be paid to the companies, Luiz Mário cites the purchase of new buses – which, according to him, take 10 years to be fully paid for solely through fare collection – and the implementation of the electronic ticketing system, which he claims cost around R$ 100 million.

Furthermore, Luiz Mário notes that, with the bidding process, the employees of the companies currently operating in the sector will have to be laid off. He believes the city should pay compensation to the workers. “If we have to compensate the employees en masse, we need resources that aren't included in the fare to do so. So far, we haven't seen any way to transfer those funds to the eventual winners of the bidding process. They will have to be laid off, and the winner, if they so choose, can rehire them or hire new ones,” he argues.

The city government denies any responsibility to compensate companies in the event of a bidding process and claims that an opinion from the Municipal Attorney General's Office supports this understanding.