The Land Transportation Franchising and Regulatory Board (LTFRB) on Tuesday said franchises would be bid out to interested public utility vehicle (PUV) operators. This will replace the current system where the board merely approves applications for franchises by interested parties.
“Today, the way it’s done is that the board just gives out franchises at their own discretion,” Transportation and Communications Secretary Manuel “Mar” Roxas II said Tuesday.
Speaking at the LTFRB’s 25th anniversary celebration in Quezon City, Roxas said the granting of franchises would now be based on demand studies conducted by the agency.
“Our plan is to have the openings for these routes published in the papers and have an auction for interested parties. We want to remove the subjectivity in the process,” he said.
Studies, which take into account the population of certain areas and the demand for transportation to specific points, will help authorities determine the number of buses or jeepneys that that route will get.
There is currently a moratorium on new franchises for buses, jeepneys and utility vehicle or UV Express vehicles. The moratorium would be lifted once new franchises are put up for bidding, but the LTFRB said new franchises for routes plying Epifanio de los Santos Avenue, Metro Manila’s most-congested thoroughfare, would not be included.
“I’m not seeing that we will do this immediately, but that is the direction we are heading,” Roxas said.
In a separate interview, LTFRB board member Manuel Iway said the bidding out of franchises would lead to higher revenues for the government because the group that would offer the highest franchise fees would most likely win the contract.
“Today, when a franchise is granted, all the government gets is P4,000 per vehicle, at most. But if we put it up for bidding, parties can offer higher fees to the government to sweeten the deal,” Iway said.