Faced With the Deplorable Transport Situation in Cuba, the Government Looks to the Private Sector

Buses are scarce in the midst of fuel shortages, but there are many passengers. (14ymedio)

14ymedio bigger14ymedio, Madrid, 20 October 2023 — The Cuban Government does not yet know how to integrate the private sector into passenger transport to make it attractive but is studying it, according to the Minister of Transport, Eduardo Rodríguez Dávila, speaking Thursday on State TV’s Roundtable program, as part of a discussion in which he offered the deplorable data of his sector, saying that the participation of MSMEs (micro, small and medium-sized enterprises) is essential.

This is not new, he said, since self-employed businesses and cooperatives are already present in the activity, and now there are more than 350 MSMEs dedicated to passenger transportation, cargo, workshops, road repair, component production and spare parts. All of them can contribute to improving the depressed sector.

So, how to make the incorporation of the private sector attractive? The Government doesn’t yet know. Rodríguez Dávila detailed the problem well. When the company has losses, in order to maintain the rates, vehicles in operation and fuel, the State budget supports it. This doesn’t happen with other forms of management, which invest in leasing and improvements or in the purchase of a vehicle and then have no way to cover the investment, since trip prices are regulated, although he admitted that there is a lack of control for that requirement to be met.

“Really with state-owned companies we have been accustomed to working in one way, but with non-state management forms we have to work in a different way”

Really with state-owned companies we have been accustomed to working in one way, but with non-state forms of management we have to work in a different way. The purpose is the same, the provision of a service according to the standards that our population expects, but the way to approach it is not the same. We have to learn how to do it well; it is a negotiation system in which there are several actors setting the rules of the game,” he said. The minister is working in a group together with the United Nations “for the improvement of public-private relations, using the world’s experiences.”

Rodríguez Dávila also encouraged state entities to rent vehicles to the paralyzed MSMEs, since, he said, they sometimes refuse to do so out of fear or ignorance. Despite this, more than 1,000 means of transport have been rented to private and other public companies. “We have many variants, and our vision is to try to ensure that both the state and non-state companies can carry out their activities efficiently, because that definitely leads to better service for the people,” he said.

“How can the State not fix a vehicle and the private one can? You have to visualize the dimensions. One car is not the same as 500, but there are also concerns related to prices and the control of transport activities,” he said.

Before reaching that point, Rodríguez Dávila depressed viewers with a cascade of data about the state of the sector, by land, sea and air. The cause, once again, is a lack of foreign currency. A new bus costs $200,000 and a locomotive $3 million, while a ship or plane cost much more. Spare parts or materials to manufacture them are also purchased outside the Island, and that limits the options, said the minister, who did not mention the donations or Chinese and Russian cooperation, which alleviate the situation in some way.

Other numbers: provincial transport companies moved 902 million passengers in 2017, compared to 274 planned for 2023

In figures, Rodríguez Dávila said that 1,500 means of transport that were out of service have been restored. “What happens [is] that you restore them and then have fuel limitations, or they are damaged again by the same level of activity,” he admitted.

The graphs show bleak data. In 1986, thanks to years of Soviet subsidy, there was a peak of passenger trips on the Island of 2.236 billion, but in 1998 the collapse reduced that to fewer than 500 million. Venezuelan intervention, reforms and the thaw made it possible to recover, and in 2017 there were 2.275 billion passenger trips, but last year the sector closed with just 1.008 billion.*

But we don’t have to go that far back. In other numbers: provincial transport companies moved 902 million passengers in 2017, compared to 274 million planned for 2023**. In Havana, where the situation has had the least effects, only 37% of the travelers relative to the numbers from five years ago are expected, while Cienfuegos (11%) and Holguín (12%) have the worst projections.

“Fewer than 300 buses are working in Havana, a city that in the 1980s had 2,500 buses and just four years ago had 600,” Rodríguez Dávila said.

The air transport situation is not much better. Domestic flights to Santiago de Cuba and Holguín have been restored, but there are none to Camagüey and Gerona because the plane is broken down. All this despite the fact that Russia has contributed. “Recently, we received a Russian-made TU-204 that was modernized and will soon be put into operation, and we have an IL-96 and some ATRs that can help internally in the country.” An attempt is also being made to acquire a plane with foreign investment to renew the fleet, he added.

As for the catamaran and the ferry, they take turns. Rodríguez Dávila recalled that the latter was stopped due to lack of fuel, but now it will work again. Of course, the ferry has to be suspended for maintenance. And finally, the railroad: despite delays, maintains stability and meets the planned travel times. “There is a level of general satisfaction,” he said.

Fifty percent of freight trains don’t function, and although work is being done to restore them – thanks to the workshops, cars and locomotives from international cooperation – the process is slow

The case of cargo transport is different. Fifty percent of freight trains don’t function, and although work is being done to restore them – thanks to the workshops, and cars and locomotives acquired through international cooperation – the process is slow. “To the same extent that you restore, other things that were working stop due to new difficulties,” he complained. All this despite the fact that the load has decreased due to the reduction in purchase volume. “We are more or less transporting half of what we did four or five years ago (…) according to the economy’s possibilities,” he explained.

In addition, Rodríguez Dávila devoted several minutes to the conditions of roads, which cause a large number of crashes, as he had warned on many occasions. This time, the minister admitted it without excuses. “There has been a deterioration of the roads that we are unable to contain, and no timely solution to the potholes and cracks.”

The reason, again, was attributed to the shortage of foreign currency, especially for the acquisition of materials and also for  machinery parts. “Many times the limitation of fuel means that we are not able to produce the aggregate or place an order for it later,” he added. That is why it is foreseen that, in addition to other municipal, provincial administrations and ministries that administer roads, the MSMEs will contribute; in fact, there is already one State business that works in the manufacture of asphalt material.

“We are also going in a more active way to non-state management in road repair. Together with the Ministry of Finance and Prices we will review the sources that can be used for financing, because many times we have the asphalt but there is no budget to pay for repairs,” he said.

Finally, as for the old fleet of vehicles, the minister said that the policy is being reviewed to advance “in the reorganization of the commercialization of vehicles in Cuba.” Since Decree 83, which allows the purchase at wholesale prices was approved in March, 1,000 vehicles have been sold. That rule eliminated the restrictions on electric motorcycles, an improvement that, for the minister, “somehow compensates for the decrease in buses working in the capital.”

“Behind every bus, train and other vehicles that circulate is the effort of many people who make it possible every day; and taking care of the little we have is one of the premises to get ahead,” Rodríguez Dávila said in the usual motivational final plea.

Translator’s notes:

*In very rough numbers this translates to about 218 annual trips per person (all ages)in 1986, dropping to 45 in 1998, rising to 200 in 2017, and then dropping back to 90 annual trips in 2022.

**Trips per person cannot be calculated for this set of numbers because the population served by the transport companies is unknown.

Translated by Regina Anavy 

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