Transmac’s new public concession contract effective since Saturday

Public bus operator Transportes Urbanos de Macau SARL (Transmac) signed its public concession contract with the government on Saturday, on terms that mean it comes without the government subsidy cap for the transport services rendered.
The public concession contract, which expires on July 31, 2018, is a switch from the service provider contract that the government previously signed with the city’s three bus operators following a damning report issued by the Commission Against Corruption in November, 2013. The report said at the time that the service purchase format, which stipulated that the bus companies do not keep the bus fare but get a regular service charge from the government, resulted in a ‘poor use of public money’.
Transmac is the last operator to change its contract into a public concession agreement with the government following fellow bus operators Macau New Era Public Bus Company and Transportes Colectivos de Macau SARL (TCM).
Under the public concession format, the bus operators will follow a new payment plan by which they will receive subsidies from the government for their operation as well as keeping fares that passengers pay. The subsidies are calculated from the deduction of the estimated operation cost from fares revenue.
In the case of Macau New Era and TCM, whenever the revenue generated from fares and other assets deal exceeds the bus operator’s expenses by 3 per cent to 4 per cent, they are bound to returning the subsidies they received in excess to the government.
But this subsidy cap does not apply to the contract signed with Transmac, the Transport Bureau said.
“This is because Transmac is not going to apply to adjust its service value in 2016 [but will when] their contract expires in 2018. The service value means their operation expenses,” a Bureau spokesperson explained to Business Daily.
“And as the bus company is going to maintain its estimated fare revenue and the service value until the contract expires, the resulting subsidies they receive will be pretty static, at about MOP43.2 million (US$5.38 million a month,” the spokesperson added.
But like Macau New Era and TCM, the subsidies Transmac receives from the government can be affected by less than satisfactory service quality.
Every year, the government conducts two assessments of the bus operator’s service quality. The bus operators will see their subsidies reduced if their assessment scores fall below 60 points, the Bureau explained in a statement issued on Thursday.
Currently, Transmac runs 23 of the 72 local bus routes, the second-largest share following the 32 routes run by Macau New Era.