Bus companies threaten to restrict services

On 15 November 2004, Slovakian bus companies significantly reduced the number of regular bus services in a one-day protest action. Although the protest did not lead to serious economic damage, it did highlight the deep problems underlying the financing of public bus transport. According to the bus companies, if the problem is not resolved, there could be mass redundancies and wide-scale route closures. A coordination group was set up at the end of 2004.

On 11 November 2004, the Association of Bus Transport (Zväz autobusovej dopravy) announced that for one day on 15 November 18 regional bus companies would provide passengers with a Saturday service only. This meant that only one-third of the approximately 5,000 local and cross-regional buses would run. This protest action by the regional bus companies that are members of the Slovak Bus Transport Company (Slovenská autobusová doprava, SAD) was triggered by the lack of financing for public bus transport. According to an Association of Bus Transport representative, Georg Trabelssie, who is responsible for bus transport reform, the companies wanted to draw attention to what could happen if public bus transport was not reformed. So far, public bus transport has been financed from the national budget. In 2004 it received almost SKK 1.2 billion. Since 1 January 2005, however, county administrative bodies and local governments have been responsible for these services. The bus companies would like to know what kind of service is envisaged and what funds will be allocated to it. According to the Association of Bus Transport president, Ján Vrba, the agreement that the association has concluded with the county administrative bodies and local governments will be void if the necessary financing is not forthcoming.

It is estimated that around 80% of Slovaks travel to work or school by public transport and a significant reduction in the number of routes would cause major problems. Businesses would be hit as some employees would not be able to get to work (although some employers have stated that they would not discipline employees who could prove that they did not get to work because of a restricted bus service). The local and regional bus companies that belong to SAD are loss-making, apart from anything else because of the significant discounts granted to passengers. At the end of October 2004, losses had reached more than SKK 320 million. The problem also has a social dimension: transport prices are kept low - they are still state-regulated - in response to the continuing low incomes of much of the population. The Ministry of Finance (Ministerstvo financií Slovenskej republiky, MF SR) sets maximum ticket prices for bus transport below the real cost of providing the service. Bus transport operations are therefore possible only because of state (from 2005, the county administrative bodies) subsidies. The bus companies are therefore demanding a number of major changes to bus transport financing.

Employers' organisations also presented their views on the protest. Club 500, which is a member of the National Union of Employers of the Slovak Republic (Republiková únia zamestnávatelov Slovenskej republiky, RUZ SR) (SK0408102F) and whose members are companies with more than 500 employees, considered the protest to be a kind of lock-out. According to the Club’s executive director, speaking before the event, the protest would be misdirected as it would hit citizens and businesses rather than the authorities. Club 500 served notice that employers would seek compensation for losses, and recommended that the bus companies try to resolve their problems through negotiations with those responsible, not to shift the problem onto the shoulders of business. The president of the Association of Bus Transport admitted that the planned protest might lead to legal disputes. The Railway Corporation (Železničná spoločnosť) also reacted to the situation, announcing that it would lay on more trains on all routes, especially early in the morning and late in the evening, and paying particular attention to the most vulnerable locations.

Protest action

On Monday 15 November 2004, two-thirds of local and regional bus routes were suspended across the Slovak Republic. The bus companies did not heed the employers' warnings. According to the available information, most people knew about the action and took appropriate alternative measures. Those who did not need to travel stayed at home. Others took advantage of the extra services laid on by the Railway Corporation, which added one or two more trains on approximately 50 lines: according to the railway company the number of passengers increased by 20%-50% on the day. Others used their own cars. People living in rural areas practised car sharing. Students living in remote locations were given the day off. As a consequence of the protest, some companies faced problems because they did not have enough parking places. In the morning and afternoon, several traffic jams occurred. However, apart from this, the bus protest did not cause serious problems.

The representatives of the county administrative bodies reacted in a number of ways. The chair of Banská Bystrica county council, Milan Marčok stated that a reduced service would become a daily reality if the problem of bus transport financing was not resolved. He therefore suggested that the government target concessionary tickets, and also increase the budget of the Ministry of Transport, Posts and Telecommunications (Ministerstvo dopravy, pôšt a telekomunikácií Slovenskej republiky, MDPT SR). In contrast, Žilina county council was against the protest and declared that it would apply sanctions to the bus services if it transpired that the law had been breached in any way. It reproached the bus companies with failing to inform parliament of the situation, suggesting that the latter might as a result have taken action through the 2005 budget.

Commentary

According to Association of Bus Transport representatives, the protest showed that local and regional bus transport still plays an important role in Slovakia. Although the one-day protest did not cause significant economic damage, it underlined the seriousness of the problem of bus transport financing, and the organisers declared that the protest had achieved its goal. They reiterated their view that the problem lies with the current system of financing and subsidy.

Regional governments have demanded that links be established between local and regional level in the management of bus services. However, the Ministry of Finance, which subsidised bus services, set new ticket prices in 2004. In the course of the year, costs increased: for example, the price of diesel rose significantly and MDPT SR introduced charges for using certain roads. These changes increased the bus companies' costs, and the planned state budget subsidy did not cover them. There were unplanned losses and the bus companies' economic situation worsened. Since 1 January 2005, the regional governments have been responsible for financing local and regional bus services, to be funded through local taxes. Regional governments have started negotiations with the bus companies in order to safeguard services for 2005. In 2005, approximately SKK 1 billion will be available to subsidise bus services: according to the bus companies this will cover costs for approximately eight months. An additional SKK 0.5 billion will be needed to cover the whole year. If it is not forthcoming, the bus companies announced that they would dismiss about 2,800 employees out of the current 10,500. The Minister of Transport, Posts and Telecommunications, Pavol Prokopovič, confirmed that a coordination group would be established at ministerial level, providing a forum for negotiations between the bus companies and the authorities, MF SR, MDPT SR, the Ministry of Labour, Social Affairs and Family (Ministerstvo, práce, sociálnych vecí a rodiny Slovenskej republiky, MPSVR SR) and representatives of regional self-governments. The negotiations would cover the Association of Bus Transport's proposal regarding the funding of local and regional transport, legal changes in relation to discounted travel and possible ticket price increases. The bus services have agreed in the meantime that they will not make redundancies, close bus routes or increase ticket prices. The coordination group therefore seems to be working effectively. The government reportedly made an additional SKK 200 million available from the state budget for public bus services in February 2005.

The bus protest was the second important social action organised in the sensitive area of transport in the last two years. In the first, in 2003, railway workers went on strike for several days (SK0306101F); this time, the protest was organised by the employers. (Ludovit Cziria, Bratislava Centre for Work and Family Studies)

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