Where is GSP going?

Anyone who rode Belgrade's public transport during the nineties can say after that traumatic experience with a calm soul that that period was the worst "in recent history" and that nothing after the year 2000 was even close to such a general collapse and chaos.

However, that's where the "but" comes in: in the last few years, the public transport in the capital, it's true, has not come close to the horror of the nineties in terms of (lack of) quality, but it is getting worse. Again, it's not rare that you simply can't get on the bus in the morning because of the crowd (admittedly, there are no funny advertisements for reducing body weight), or there is no transportation for 20-30 minutes (and three buses come at once), or "something" comes up that is already a long time ago, a place in a museum and not on the streets, or during the summer, at 40 degrees, a bus arrives with heating...

Also, during the last months and years, we learned from former drivers of the Belgrade City Transport Company (GSP) through the media that the vast majority of vehicles on the streets are defective, that drivers are forced to work multiple shifts in order to earn a decent amount at the end of the month... They arrive occasionally and the news that a bus suddenly caught fire, either while driving or in the parking lot, that several drivers lost control of the vehicle through no fault of their own, and the buses suddenly accelerated and crashed into the wall or an overpass. It is visible to everyone that retired drivers are increasingly "longing" some city lines, which also indicates a shortage of drivers.

And these are "only" driving problems - for more than 10 years, GSP and public transport in general have put an enormous burden on the city budget, GSP is a multimillion-dollar loser every year (in euros), ticket collection in Belgrade is extremely weak, GSP has 15-20 percent surplus employees and thus the problem persists, and no city government has been able to solve it for decades.

LET'S BUY TURKISH AND CHINESE

"According to all operational parameters, the business trend of GSP shows more than worrying signs and we are getting closer to the moment of its collapse. The number of vehicles in GSP's inventory has decreased by almost 300 in the last four years due to the write-off of old and damaged vehicles. There was practically no procurement of new ones, unless we count the procurement of gas-powered buses in the procurement," Peđa Mitrović, general secretary of the Freedom and Justice Party, an economist and former councilor in the city assembly, told "Vreme".

He reminds that a tender for the purchase of 100 gas buses worth 3,5 billion dinars was first announced, but then the city government itself suspended it in the middle of 2021 in order for the city of Belgrade to "save" due to green funds.

"The savings should have been 10 percent, or 350 million dinars. But then a tender was announced, which was as if designed for a company close to Turkish President Erdogan, and instead of savings, the cost of purchasing a bus rose to over four billion dinars. The manufacturer 'Solaris' also applied for the tender, but its offer was rejected. Belgrade thus paid 10 million dinars more per bus than Novi Sad, and we waited almost a year for the delivery of all 100 buses. At the same time, the buses were procured without the city providing the gas filling infrastructure. The job of supplying gas to these buses was awarded only in August of this year, to a private individual who still does not have a gas station built and who stated that he could not build it in less than six months. Let me remind you, almost 14 months have passed since the decision to acquire 100 BMC buses was made," says Mitrović.

The lack of buses is also pointed out by Nikola Jovanović, also a former city councilor, today director of the Center for Local Self-Government (CLS).

"Since 2016, the city of Belgrade has been exclusively buying Chinese and Turkish buses for public transport, which is already becoming tragicomic, and has long been transparent. First, five electric buses of the Chinese brand 'Higer' were taken, then there was a huge purchase from 2019 for 70 Turkish buses of the brand 'BMC' and 174 'Higer'. Last year, another 10 electric 'Higer' were taken, and these 100 gas 'BMC' - that means, in the last three years, 354 buses were taken and all of them are exclusively Chinese 'Higer' or Turkish 'BMC'. How is it possible that no European brand can get a job in Belgrade and why have Chinese and Turkish manufacturers found their eldorado in our capital when in most European countries they can't even get a foothold?", asks Jovanović.

He states that a particularly suspicious procurement was the one from 2019, when, as he says, an incredibly short deadline was prescribed for the first tranche of 70 buses, so the expert public suggested that those Turkish "BMC" buses were not even made to order for Belgrade , but they were removed from the warehouse because someone returned them.

"All these procurements have been marked by numerous controversies, from the incidents with the overturning of Turkish buses, to the poor condition and huge costs of servicing Chinese buses. Instead of getting a modern city transport, Belgrade relied on buses that Europe will not have and burdened itself with numerous side costs that will all be returned to the citizens of Belgrade.

NO TRAM OR TROLLEY BUS

photo: phonet

"It is a special problem that, in a situation where Belgrade is facing great pollution and a crisis of fossil fuels, not a single new tram or trolleybus has been acquired for 11 years. The last new trams arrived on the streets of Belgrade back in 2011, and trolleybuses in 2010. At the same time, out of 830 buses within the GSP, only 15 vehicles are electric," says Jovanović for "Vreme".

And Dušan Pavlović, current city councilor from the "Ne davimo Belgrade" movement, reminds us that investment in trams and trolleys has almost stopped.

"There was a public procurement for trolls last year, but that tender failed because the price of trolls jumped, so we couldn't get as many trolls as we wanted for the money we allocated, and since then we haven't had a new procurement for them at all. The existing trolleys are in a catastrophic condition, there are not enough of them to serve the already existing lines, and we believe that the infrastructure for trolleys should be further expanded, because it is cheaper than electric buses", says Pavlović for "Vreme".

He points out that the public still does not know the true state of affairs in GSP, and that it will be known only when the government changes.

"We calculated and got the result that private carriers get more per kilometer traveled than GSP. One of our proposals is to reduce the number of private carriers and not increase them, which is happening now. We think that all lines should come under the control of GSP, just as we think that fare collection should also come over. Recently, a new public company was formed that will deal only with ticket collection, which would have been acceptable if a new contract with the Kentkart company had not been signed just a year ago, and who knows what penalties the city will now pay due to the eventual termination of that contract. We don't know anything about that either - we only received information at the City Assembly that the Secretariat for Public Transport will lead negotiations on the termination of that contract", says Pavlović, adding that the ticket price in Belgrade, if compared to the purchasing power of the population, is one of the highest in Europe.

FINANCIAL COLLAPSE

The real magnitude of the problem can be seen when looking at the financial reports of the GSP and the budget of the City of Belgrade. According to official documents, during 2021, GSP achieved a business income of 17,78 billion dinars, of which it received 13,57 billion dinars based on the contract with the City, and it also received 3,72 billion dinars in subsidies from Belgrade.

Now let's compare it with the final account of the City for 2021: the Secretariat for Public Transport spent during 2021 27,9 billion dinars on contracted services, from which GSP and private carriers are paid. So, more money in 2021 went to private individuals (14,33 billion) than GSP received.

The rebalancing of the city budget for 2022 also increases these figures: instead of 27,9 billion, it foresees as much as 30,15 billion dinars, which the Secretariat for Public Transport should pay to GSP and private individuals. If we know that the total expenditures of the City of Belgrade were estimated at 112,09 billion dinars by the budget rebalancing, we can easily arrive at the calculation that more than a quarter of the total city budget goes to public transport - 26,9 percent.

Despite all these billions from the city budget, GSP has been making losses for years. In 2021 alone, the company reported a loss of 1,53 billion dinars (13 million euros), while the total accumulated loss amounts to almost 30 billion dinars (more than a quarter of a billion euros). At the same time, the company's short-term liabilities are 7,55 billion dinars (almost 65 million euros) higher than current assets.

Because of this, the auditor of the financial report of GSP states that there are materially significant uncertainties "that may cast doubt on the Company's ability to continue operations in accordance with the principle of continuity of operations", and that "the management of the Company believes that with the financial support of the Founder, it will succeed in the coming period to overcome the mentioned problems in business and provide the necessary funds for regular business".

The Fiscal Council is one of the few institutions that has dealt with the GSP problem in detail and thoroughly on several occasions. The last time they did this was in 2017, when they clearly pointed out the pressing problems in ticket collection, redundant employees and inefficient management of the company: "A prerequisite for the permanent recovery of Belgrade's public finances is solving the problem of city transportation. The Belgrade budget receives less than 10 billion dinars from the collected transport tickets, while the costs of financing city and suburban transport cost it about 24 billion dinars. The main reason for such an unsuccessful functioning of city transport is the low collection of tickets - almost half of the passengers do not pay for transport tickets. (…)

The main cause of excessive GSP costs is the redundancy of employees. Salary expenses make up over 40 percent of all business expenses of GSP, which is almost 10 percentage points more than Arivu Litas, the largest private carrier. The main reason for this difference is the existence of a large surplus of employees. Specifically, out of about 5.500 employees in GSP at the end of 2015, over 1.200 people were employed in ongoing vehicle maintenance. (…)

The problem is so complex that, in addition to the city authorities, it is probably necessary to involve republican institutions (competent ministries - local governments and businesses) and to adopt and implement a plan based on professional and credible measures", wrote the Fiscal Council and in 2017.

It is interesting to note that none of the mentioned problems were solved by the city government, but that the problems only increased - now the financing of public transport does not cost the City 24, but more than 30 billion dinars, and GSP does not have 5500 employees, but almost 5900.

WHAT NEXT

photo: fonet, beoinfo

"GSP must enter into a restructuring process and management must be brought in to carry it out - business optimization, savings to be made, driver salaries to be increased, working conditions to be improved, new buses need to be purchased... It is a non-scientific process fantasy, but politicians don't do that, experts do that," says Peđa Mitrović from SSP.

"It seems to me that they are systematically collapsing GSP in order to open the door for complete privatization. For now, they are draining funds from it, as well as from EPS, until they extract everything that can be extracted, and when the system collapses, then a private person will come. It has been going on for ten years: the company is failing, and no one is doing anything about it. And the GSP problem can realistically be solved in a year - the results won't be flawless right away, but it can be cleaned up and put on its feet in a year: you raise wages, improve working conditions, buy new buses, comb through all existing contracts to see what they are and when it expires, in order to conclude new, more favorable ones, you restructure financial debts in cooperation with the City, because without the City it will not be possible to solve it, and that's it, there is no great philosophy here", he concludes Mitrović adding that the position of the SSP is that there should be free transportation in Belgrade "since it is already almost free, given that a large number of people do not pay for tickets."

According to Nikola Jovanović from CLS, first of all, it is necessary to adopt a master plan for public transport and traffic for Belgrade, according to which the lines, stops and everything else will be reviewed with the aim of more efficient transport.

"After that, reform the GSP and file criminal charges against the people who ruined it. GSP Belgrade currently owes suppliers six billion dinars, and this year's business loss will be approximately the same. Furthermore, introduce supervision over private carriers, who should be given city transport lines only if they can guarantee higher standards than GSP, which is not the case now. Then, stop the transition of the vehicle fleet to gas, but switch to hybrids, and in the future liquid hydrogen, acquire 80 new trolleybuses, expand tram lines and buy only buses that are used in Europe and that are made specifically for Belgrade according to European standards.

In the end, it is necessary to treat the future metro as one of the sub-systems of public transport, which should be integrated into the existing system, and not to expect that it will replace the existing public transport and that it will cover all the failures related to bus, tram and other traffic", concludes Jovanović .