Basin
A campaign offer by President Guillermo Lasso to the city of Cuenca to assume the liabilities and subsidy of the tram in case of winning the elections generated controversy in the last few hours.
On the one hand, the first authority of Cuenca, Pedro Palacios, once again requested the payment offered, which today exceeds $41 million, while in recent days the president replied that “it is in the hands of the mayor.”
On January 15, 2021, during an electoral visit, Lasso announced the offer at a press conference and later confirmed it on his Twitter account. “In Cuenca I made a commitment to the mayor @pedropalaciosu and the citizens that, when I am president, I will sign an agreement, where it will be established that our Government will assume the liabilities and the subsidy that corresponds to the Cuenca Tram.”
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The situation was reactivated last Wednesday when Guillermo Lasso visited the Azuayo canton of Nabón.
Before the media, Lasso was consulted on how he will comply with what was said while he was a candidate. There, he replied that he would, but making it a reality “is in the hands of the mayor.”
Lasso’s statements were analyzed by Palacios and his team until Monday morning when he gave his version of the procedures undertaken.
The local authority presented an official letter sent on June 21, 2021 to Lasso with a copy to the Vice President of the Republic and the Minister of Economy and Finance asking for the possible payment of the subsidy and to the suppliers to be expedited.
Likewise, he also showed a WhatsApp chat between him and Alfredo Borrero on July 12, which reads: “Dear Alfredo (…) I leave you the reminder of the tram payment issue, the job was left for June 21 to the Lord President with a copy to you and the Minister of Finance”. According to what was stated in the conversation, the answer was: “My dear Pedro, we are looking for where the procedure is.”
With that, Palacios assured that he did initiate the procedures, but –according to him– Lasso’s “subordinates” have not informed him about it.
Jorge Moscoso, director of the Tranvía project, said that the subsidy offered by Lasso in the presidential campaign originally amounted to $51 million, but now it is $41 because the Municipality has already paid $10 million to the French bank Natixis, which granted the initial credit for construction of the transportation system.
Taking Lasso’s word to also assume the payment of the subsidy, we must add $5 million corresponding to the subsidy budgeted for 2022. In short, the pending commitment of the Government with Cuenca is $46 million.
In the midst of this exchange of statements, the governor of Azuay, Matías Abad, came out to say that he would personally start the process to hold a meeting and “trace the roadmap” regarding the issue.
However, he announced that since it is an onerous amount, the Municipality must present some documentation in this regard.
Cuenca tram registers economic losses after a year of operation, authorities indicate
Subsidy for the Cuenca tramway covers low occupancy
Occupation
Another factor that prevents the tram from being economically sustainable is low passenger occupancy, according to local authorities.
Currently, according to official figures, an average of 13,000 citizens travel per day, a figure far from that of previous studies that proposed an occupation of at least 45,000 passengers to be profitable.
Another variable of direct influence for low occupancy is that in Cuenca there is a bus line (operated by private entrepreneurs), which is a direct competition by having similar routes and with the same destinations.
According to Palacios, with the implementation of new technology and electric buses in the next five years, the tram subsidy would be a maximum of $1,500,000.
The streetcar entered commercial operation in September 2019 and currently generates $2 million in revenue from advertising and passenger occupancy. Still has a deficit of $5 million.
The tram is the most expensive mobility project in the history of Cuenca, with delays in its construction and went through several administrations until it became operational. His mentor was former mayor Paúl Granda in 2013, then Marcelo Cabrera was unable to finalize his operation, and in 2020 Pedro Palacios gave the green light to start his commercial activity. (I)
Source: Eluniverso
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