Government is being warned that it could end up on the wrong road with divestment of the “technically insolvent” Transport Board, if the needs of commuters take a back seat as private operators chase profits.
Words of caution are coming from economists Jeremy Stephen and Professor Justin Robinson, who stressed the importance of route allocation, especially for residents in under-served areas that may be deemed unprofitable.
Last week, Deputy Prime Minister and Minister of Transport and Works Santia Bradshaw confirmed Government’s plan to divest the Transport Board and said there would be stakeholder meetings to discuss the proposals, including severing of all workers at the state-owned enterprise and creating a Mass Transit Authority to oversee the bus service.
While both acknowledged the Transport Board’s long-standing financial challenges and its heavy reliance on the public purse, Stephen and Robinson said the quest for public transport financial viability should prioritise the most important players – the travelling public.
Robinson, pro vice chancellor and principal at UWI Five Islands Campus, said Government’s position on the Transport Board was neither frivolous nor ideological and rested on fiscal arithmetic that cannot be ignored.
This included the transfer of about $206 million in subsidies between April 2013 and March 2018, funds which exceeded one-third of its annual expenditure, and more recent allocations beyond what was initially budgeted.
In a written analysis yesterday, he urged the authorities to learn the lessons from public transport reform in other countries, saying that “the fundamental question the Government’s proposal does not adequately address is who will serve the routes that do not pay”.
“The evidence from Britain, Chile, Jamaica, and Trinidad is clear. Markets optimise for profit, governments must optimise for coverage. When those objectives are confused, the result is buses where and when there is profit, and silence where there is none,” the financial expert stated.
Robinson, noting that “Transport For London demonstrates that private operation and public service can coexist through deliberate design”, is recommending a revised approach for Barbados.
He suggested:
• gross-cost contracting rather than owner-operator divestment, with operators paid per kilometre, with revenue risk held by the Mass Transit Authority;
• bundled route packages requiring any operator serving profitable corridors to also cover marginal areas;
• centralised electric bus maintenance under the Authority, concentrating technical expertise rather than fragmenting it among dozens of small operators;
• performance bonds and minimum service standards with meaningful penalties;
• explicit subsidy for concessionary fares so pensioners and students are not served at operators’ loss; and
• phased implementation with pilot corridors. “The Transport Board was established on August 42, 1955. For 70 years, it has connected this island, imperfectly, often inefficiently, but universally. The child travelling to school, the hotel worker commuting to the South Coast, the pensioner visiting family, all served by the same system, paying the same fare, regardless of whether their journey turned a profit,” Robinson said.
“That compact can be honoured through private operation, as shown in London. But it requires regulatory architecture that treats coverage as a public obligation, not a market outcome. The current proposal offers buses to workers on favourable terms without specifying who will serve the routes those workers may rationally choose to abandon,” Robinson noted.
Stephen wrote in the DAILY NATION on Monday: “One would not be wrong to think the debt situation at the Transport Board has begun to spiral and that
Government now faces political limits on what it can do.
“To me . . . the true test lies in route allocation. Displaced drivers who take up the offer should be granted first rights to refusal on routes. But without an equitable route allocation, this investment becomes far less appealing to the wider public.
“After all, these electric vehicles cost more than conventional options. I suspect that even the former drivers may have to yield to the aggressive driving culture already embedded in the public service vehicle sector in pursuit of profit,” the former lecturer at the University of the West Indies said.
The Transport Board’s financial challenges have been documented in various fiscal reports published by Government in recent times.
The Barbados Fiscal Framework 2026-2027 to 2028-2029 said that in the 2024-2025 fiscal year, Government initially forecast it would provide $12.2 million to the Transport Board but actually transferred $26.3 million. It is again budgeting $12.2 million for the Transport Board in the current 2025-2026 fiscal year.
The document prepared by the Ministry of Finance said the Transport Board was one of the SOEs posing a fiscal risk to Government. Without giving figures, it said the Transport Board’s liabilities exceeded its total assets, making it “technically insolvent”.
The previous fiscal framework for 2024-2025 to 2026-2027 said the Transport Board had unfunded liabilities of $84.1 million. (SC)
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