Tuesday, May 21, 2024
BusinessLRT awaits response from city admin for 1.5 bln birr subsidy

LRT awaits response from city admin for 1.5 bln birr subsidy

Five more carriages to be added

The Addis Ababa Light Railway Transit (AA-LRT) announced that it is awaiting the Addis Ababa City Administration’s response for its requests for budget subsidy amounting to 1.5 billion birr to cover its expense for spare-parts and administration costs.

The transit recently announced that the request has come due to the financial shortages it faced after it registered lower revenue falling short of covering its operational and administration costs.

In the recent fiscal year (which ended last week on July 7, 2018), the metro transported some 37.5 million people amassing a total of 102 million birr revenue from its service.

However, the amount of the stated revenue in the reported period could not be enough to meet its required financial expenditures including operational and administration expenses.

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According to officials of the LRT, unless the city administration released the requested amount of subsidy, the transit service will encounter challenges to deliver the very-service that is there to provide.

It was also disclosed that out of the requested total subsidy, 1.1 billion birr is needed to cover expenses for purchasing spare-parts and necessary equipments for the train. Meanwhile, the remaining 400 million birr is to cover administration costs summing up the budget requested.

The company argues that since the metro transport service is intended to provide a service to the society with a lower tariff, it commonly faces financial needs. Hence, government’s subsidy is common not only here in Ethiopia; but also in other developed nations including in Europe and America as well.

Apart from the budget subsidy, the company has already prepared a draft tariff adjustment to be implemented in the coming one or two months.

However, the draft tariff adjustment first should be approved by the Ministry of Transport which has received the draft two months ago.

According to officials of LRT, the revised tariff adjustment is designed to encourage low earning societies to use the train as their first choice of transport service.

Furthermore, officials also indicated that the proposal proposed a single tariff amount for the price of transportation service from departure station to the end. Meaning, a commuter either starting from East to West or from South to North of Addis Ababa will pay the same tariff no matter the station they start from.

In a related development, the company has announced that as of the coming September; it will operate five more trains to improve the existing service capacity.

According to the company, once the new five trains join the service operation, it helps cut the time interval between reaching stations from 20 to 12 minutes.

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