May 21, 2013
Subway system won't survive without subsidies, Metrovías says
Stuck in the middle of the the cross fire between the national and the Buenos Aires City governments, Metrovías Subway and Tram company informed today that the system will not survive without subsidy funds.
The company's Spokesman Mariano Gibaut assured that if the ongoing conflict persists, the service could be cancelled.
Gibaut explained reporters that the company's costs "are at least 120 million pesos a month out of which 85 million are just for paying staff salaries."
Likewise, Metrovías' representative explained that they only collect "a bit less than 50 million pesos from commuters", and added, "This means that there's no way the service can survive with what we made on fares only. We need the subsidy funds."
The ongoing dispute started on January when both administrations sign a pre-agreement from which the national administration would transfer the underground and tram service full management to City jurisdiction by the end of the year, plus cutting progressively all subsidies to Metrovías license holder.
This promptly triggered BA City Mayor Mauricio Macri's counterattack, who besides refusing to accept the management of the service, conducted a brutal 127% fare hike taking it from $1.10 to $2.50 pesos.
By the end of the year the national government will stop wire transferring 30 million pesos monthly, and rumours of another fare hike that will take them to $5 or $5.50 pesos have already emerged.
Gibaut explained that a hike "will put us in the same position we are right now as we will witness another drop in the number of commuters using the service."
According to the company, the hike did not benefit the company at all by arguing that it reduced the number of daily commuters from 1.2 millions to 900,000. Thus, showing some inexplicable conception of mathematics as it went from collecting 1.32 million pesos to 2.25 million daily.