VZCZCXYZ0000
RR RUEHWEB

DE RUEHGT #0775/01 1721341
ZNR UUUUU ZZH
R 201341Z JUN 08
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 5575
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHME/AMEMBASSY MEXICO 4874

UNCLAS GUATEMALA 000775 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELTN ENRG PGOV SNAR KCRM KCOR ELAB ECON GT
SUBJECT: GUATEMALA'S PUBLIC TRANSPORTATION DILEMMA 
 
REF: A. GUATEMALA 135 
     ¶B. GUATEMALA 644 
 
¶1.  (U) Summary: Soaring gasoline prices, increased violence 
against bus drivers, and protracted talks of a fare increase 
are among the factors placing Guatemala's public 
transportation system under increasing strain.  Bus owners 
demand greater government subsidies to offset their 
increasing expenses, while drivers want more police 
protection.  Passengers have been forced to rely on buses 
that are poorly maintained and regulated and prone to 
accidents.  Government officials and organizations 
representing the interests of urban bus companies, bus 
drivers, and passengers outlined the competing demands that 
make it difficult for the government to act.  End Summary. 
 
Rising Gasoline Prices 
---------------------- 
¶2.  (SBU) In meetings with poloffs, government officials and 
union representatives opined that soaring gasoline prices 
could lead to social unrest as bus owners and drivers 
threaten to increase fares in order to offset their 
increasing operating expenses.  According to Luis Gomez, Vice 
President of the Association of Urban Bus Companies (AEAU), 
which represents bus owners, the bus fare should be increased 
by four times the current rate to allow owners to cover their 
expenses.  Previous attempts to increase the bus fare have 
led to localized unrest, as in April 2000 when five people 
were killed during violent protests in the capital over an 
authorized fare increase.  The GOG retracted the fare 
increase in response to the protests. 
 
¶3.  (SBU) In a country where the poverty rate is 51 percent, 
even a slight increase in the bus fare can significantly 
impact the ability of Guatemala's poorest citizens to cover 
their basic needs.  Gomez believed that politicians would not 
risk riots by raising rates.  Congressman Noe Orellana, 
President of the Communications, Transportation, and Public 
Works Committee of Congress, agreed with that assessment. 
 
Gang Extortion 
-------------- 
¶4.  (SBU) Rising gasoline prices and increased criminal 
activity and violence on public buses make bus drivers one of 
the groups most affected by Guatemala's transportation 
dilemma.  According to Victoriano Zacarias, Secretary General 
for the Guatemalan Drivers Union, a union representing public 
transport drivers, bus drivers do not receive a fixed income, 
medical insurance, paid vacation, or any of the other 
benefits usually afforded to workers.  In addition, bus 
drivers must pay out of their own pocket the daily rental 
fee, gasoline and maintenance expenses, their conductors' 
salaries, as well as an extortion commonly known as a "war 
tax" to gang members.  To compensate, drivers often charge 
passengers more than the authorized fare.  There is no system 
in place to protect passengers from unauthorized fares, 
although in recent weeks the transit police have been 
imposing fines on bus drivers that engage in such practices. 
 
¶5.  (SBU) A growing concern among unions representing bus 
drivers is the increasing level of violence on public buses 
(ref A).  AEAU's Gomez indicated that in 2007, 43 drivers 
were killed in Guatemala City, and that 20 have been killed 
already this year.  While some were robbed, most were killed 
because they did not pay the extortion demanded by gang 
members.  According to union leader Zacarias, economic 
necessity forces drivers to work even the most dangerous 
routes, where members of the 18th Street Gang and Mara 
Salvatrucha (MS-13) regularly patrol.  According to Edgar 
Guerra, President of the Association of Urban and Suburban 
Passengers (AUTUE), gang members transport drugs on certain 
QPassengers (AUTUE), gang members transport drugs on certain 
routes, sometimes with the bus driver's complicity, further 
complicating the security situation. 
 
¶6.  (SBU) GOG officials and association representatives all 
agreed on the need for a pre-paid fare card system.  The 
pre-paid card would prevent the need for drivers to work with 
cash and help reduce the incidence of violence against 
drivers.  Passengers would go to pre-established sites to 
credit their bus cards, and an electronic system in each bus 
would then debit the correct fare.  Guerra estimated that the 
system could be implemented in all 3,000 buses in the capital 
in two years.  He said that the bus owners should cover the 
additional costs. 
 
Government Subsidies: Where's the Cash? 
--------------------------------------- 
¶7.  (SBU) Government subsidies are intended to cover bus 
owners' expenses while maintaining the current passenger 
fare.  According to bus owners, the current fare is not 
sufficient to cover operating costs.  Bus owners had also 
expressed concern that the monthly subsidy of Q25 million 
(USD 3.36 million) was not enough to cover their expenses. 
On June 12, in response to bus owners' demands, the GOG 
authorized an additional Q8 million (USD 1.1 million) in 
monthly subsidies.  Passengers, however, cite lack of 
accountability and corruption in the transfer of government 
subsidies as factors that undermine the quality of public 
transportation.  According to AUTUE's Guerra, all transfers 
of the subsidies are in cash and there are no effective 
controls.  The GOG reportedly has been unable to reconcile 
more than Q300 million (approximately USD 40 million) in 
authorized subsidies between 2005 and 2006, and documents 
showing the receipt of those funds have disappeared. 
 
¶8.  (SBU) While bus owners receive monthly subsidies for each 
bus, the GOG does not have a mechanism to effectively verify 
that the buses are actually circulating or that the subsidies 
are appropriately spent.  According to Marco Antonio Arango, 
Deputy Director of the Transportation Directorate in the 
Ministry of Communications, there are only 12 inspectors to 
verify that the estimated 3,000 buses in Guatemala City are 
operating at least 26 days per month, as mandated.  Guerra 
recommended increasing oversight with the use of a GPS system 
to ensure that buses receiving subsidies are in circulation. 
 
"Only God Knows Whether I'll Get There" 
--------------------------------------- 
¶9.  (SBU) An association representing passengers highlighted 
deficiencies in customer service and demanded a safe and 
effective public transportation system.  Guerra accused bus 
owners of importing abandoned second-hand buses from the 
U.S., barely repairing them, and using them for public 
transportation so that owners can receive government 
subsidies without investing in improving the transportation 
system.  The result, he said, is that passengers are 
"shuttled like cattle" in overcrowded buses with broken seats 
and glass-less windows.  Prayers and slogans painted on the 
back of buses, such as "Only God Knows Whether I'll Get 
There," reinforces passengers' sense of insecurity. 
 
The Wheels on the Bus 
--------------------- 
¶10.  (SBU) While local law stipulates that buses older than 
20 years cannot operate, bus owners often do not comply with 
this law.  A study completed by Guerra's organization found 
that of the 3,000 buses operating in Guatemala City, 80 
percent were in poor condition.  According to Transportation 
Directorate Deputy Director Arango, more than 8,500 buses 
nationwide operate without the required insurance that would 
compensate passengers in case of injury.  Many drivers do not 
comply with speed limits.  According to Guerra, an estimated 
15 percent of bus drivers do not even have licenses and some 
drivers are as young as 14.  Arango added that bus drivers 
can easily obtain fraudulent licenses. 
 
¶11.  (SBU) On February 29, 56 passengers died in an accident 
reportedly caused by the bus driver's excessive speed, 
overcrowding on the bus, and perhaps faulty brakes. 
Corruption may also have been a factor.  According to press 
reports, the former Deputy Director of the Transportation 
Directorate approved a circulation license for the bus, 
although the bus did not comply with legal requirements.  The 
current Director of the Transportation Directorate, Augusto 
Marroquin, acknowledged that there is corruption in his 
agency.  Congressman Orellana urged the Transportation 
Directorate to fire several employees, including inspectors. 
As a result, the Transportation Directorate canceled two 
QAs a result, the Transportation Directorate canceled two 
employees' contracts and is conducting investigations on 
several others. 
 
Comment 
------- 
¶12.  (SBU) Guatemala City authorities are apparently 
contemplating a dramatic shift in the city's public 
transportation system.  The proposal being considered would 
involve replacing the entire city fleet with new gas 
propelled buses imported from China.  Supposedly the fuel 
savings over a seven-year period would be sufficient to pay 
for the buses.  The buses would operate with a pre-pay system 
and would presumably be more environmentally sound.  The GOG 
proposal sounds attractive, but questions remain as to how 
the fuel savings would be channeled to pay for the buses as 
well as questions regarding the logistics of switching from 
diesel to gas-operated units. 
 
¶13.  (SBU) Guatemala's ramshackle public transportation 
system is a danger to its users and a source of public 
frustration.  With gasoline prices soaring and bus owners and 
drivers both demanding that the GOG take measures to lower 
operational costs, the situation remains volatile.  Ensuring 
transparency and the proper use of subsidies and the 
implementation of a pre-paid fare card system could decrease 
the incidence of violence and extortion.  Stricter 
enforcement of penalties against bus companies and drivers 
who violate the law as well as effective monitoring could 
reduce the number of bus accidents and regularize bus fare 
collection.  The GOG's decision to authorize additional 
subsidies is a temporary palliative, since by September 1 the 
Executive would have depleted the funding authorized by 
Congress to cover subsidies.  Subsequent government action 
could have both a social and economic cost.  Should the 
government approve fare increases, riots by consumers also 
squeezed by rising food prices are likely.  Alternatively, 
should the government not approve fare increases, bus drivers 
may strike with increasing frequency, putting the brakes on 
the economy. 
Derham