Managing Director (Jamaica Urban Transit Company)

Jamaica is a major player in the Caribbean, with the second largest economy and the second largest population. It also has serious competition on all fronts in the region. Could you go over the main competitive and comparative advantages of Jamaica, and the areas where it has room for improvement?

I think Jamaica is strategically positioned.  For example, there are a number of global interests which are interested in investing in the development of port facilities here. We are close to, and favourably placed in relation to, one of the world’s largest economies, the United States.  I think that is one of our key advantages.  Brand Jamaica, inclusive of our tourism potential, and by virtue of our global success in areas like sports and music, has also positioned Jamaica for significant future success. Of course, we do have challenges, as you have indicated, but our geographical position and global spotlight have put us at an advantage overall.  

Jamaica has had unstable growth for a number of years, yet some sectors are working quite well, such as tourism and finance. What other sectors are promising for FDIs, or may develop to be attractive for investors in the near future?

I would say agriculture is going to be a key component of our economy in the future. Information Technology (IT) could also be significantly developed. In respect of agriculture, Jamaica is blessed with an excellent climate generally, which allows us to produce 12 months of the year.  There could also be much more manufacturing plants to build and assemble large and small products, including, for example, motorcars, which foreign investors are expressing interest in developing, primarily because of our location.  One of the concerns they have, however, are the costs of energy and security locally, which will need to be addressed before these investments can be easily attracted. Most of the inputs for our power supply are imported, and while we are developing alternative and indigenous power supply sources, energy costs remain somewhat prohibitive to some investors with interests in Jamaica.

Coming to the transportation sector, Jamaica has a decent regional network.  However, it has proven to be a challenge for public transport to be fully effective in a city like Kingston.  What are the opportunities and challenges that you are currently facing?

There are a number of challenges that the JUTC has been facing.  As a Government-owned company, it is guided by Government policies.   One of our concerns is the gap between the real economical fares for our services and the combined fare and subsidy structure that we receive from the Government for the concession fares we offer to some groups of commuters.  You can appreciate that any organisation that was not adequately funded from the outset, will have challenges. But we are consistently trying to get over the financial hump, and there has been much improvement within the company, despite the challenges.  We move the commuting public every day for production. Public transportation is important in a country like Jamaica, which rely heavily on public transportation because most members of the population do not drive.  Owning and operating a vehicle is  expensive, and Jamaicans with certain income levels largely use public transportation. Therefore, our services are really important, especially within the Kingston metropolitan region.

JUTC was established in 1998 to provide the Kingston metropolitan region with public transportation.  Could you give us some background about the company and insights on how you function? And what is your current financial situation?

We have approximately 570 buses in the fleet.  We service 120 routes, lifting approximately 60 million passengers annually with a service centred around three operational depots, each with separate maintenance facilities, and a central maintenance depot for major rehabilitation work.
Of the 60 million passengers, there are about 40 per cent who are concession passengers, namely students, the elderly, children and disabled passengers.  There is a concession rate of $30 for students and $40 for disabled or elderly adults, with the regular adult rate being $100 per route. The JUTC is given a subsidy from the Government, but it has never been sufficient, given the fiscal challenges with which the country is faced.
With the subsidy being inadequate, we are restricted in terms of what to charge the commuters, which create a revenue shortfall for us.  The Government, however, assists us with the purchase of buses, and along the way, with the purchase of spare parts. It has been an ongoing discussion with the Government in trying to get what the JUTC needs to operate as a reasonably positioned public transportation service.  It has been a challenge facing the JUTC since its inception, and we have consistently fallen below the desired break-even point for our service.  

We have been talking a lot about challenges.  Could you tell us about some strengths of the organisation?

I think our strength is mainly in our staff, numbering approximately 2,200 at present. With all the issues that we face, it is a testament to the staff that we are able to have the bus company still rolling out 420 units daily and carrying approximately 230,000 passengers per day. We definitely offer quality service with reliability and scheduling,  
We should have an exclusive market, based on the Government strictures relative to our operation and licensing.  In essence, we have a licence that says the route is exclusive to the JUTC, but the regulation has to be enforced to be effective.  In addition, some competing operators use their licences to operate within the city, as against the rural areas to which they should be largely confined, based on their licences.  Some operate from within the city to the border of our operating area and spend the entire day within the city. At the end of the day, they commute back to the rural areas.  These are independent 30 seaters to five-seater informal, privately-owned vehicles.  
The JUTC has approximately 120 routes. We could have, for example, information that we need to lift 40,000 people on a particular route. We do not have the number of buses to move all of these people; therefore, we sub-franchise some operators to work alongside us.  Some of our overall competitors have licences and some do not.  Essentially, there is a strong need for enforcement of the regulations, because there is a significant presence of illegal public transport operation.
We are in continuous discussion with the Transport Minister in that regard.  Efforts are being made to establish how that situation can be rationalised.  Regulations have to be implemented. It is necessary to have a proper transit police system, whose job would be to handle public transportation only.  If we do have the KMTR as our own, we should be able to decide who operates alongside us.  Secondly, there has to be some control, with a specific mandate to ensure that those who operate alongside us, operate according to their licences.

You have been recently appointed.  What is your strategy to improve the JUTC’s operations?
You have to bear in mind that this is a new board and a new chairman.  One of the challenges we have now is the difficult fiscal position the country faces. I think it is imperative that we find ways to tighten expenditure and grow revenue inside the company.  Although we depend on central Government, we have to look internally to see how the JUTC can manage.  Publicly-owned transport companies globally, like us, do not make profit. Over 90 per cent of our revenue comes from the fare box.  Other income comes from charter service and advertising. We do have some smaller income streams, but they are insignificant.  The charter service is mainly done on the weekends involving mostly social and entertainment activities.

Looking back on your career so far, you have an American and Canadian education and an extensive experience in the auto industry as an entrepreneur, and you served with the JUTC from 2009 to 2012 before coming back this year. What are you most proud of in the public transport sector?

I have been self-employed for the majority of my life. I have my own business, but it’s a delicate story.  In 2009, the then chairman of the JUTC was assassinated.  The organisation went into a difficult period.  The directors were asked to manage the company because of the fear and trauma then.  Overnight, you had directors trying to manage a company even if they did not know anything about public transportation.  Due to my knowledge of transportation, I automatically took on the operations portfolio of the company.  My business is managed by my grown children, and this gives me the ability to be here. In a nutshell, the minister asked me to stay on for a year and I said ‘yes’, and I ended up doing three years. The JUTC is a very difficult organisation to run, and I am proud to be able to help with the company’s development.
Also, being able to be independent for such a long time in the transport sector is, I believe, a great accomplishment.  Note that ninety per cent of the world is employed by 10 per cent of the world, and I am fortunate to be in the 10 per cent group.  

Harvard Business Review Readers include some of the most influential business leaders and decision-makers in the world. As a conclusion to this interview, what would you like to say about Jamaica, about your administration and goals, and about the future of the country?

Come and look at us.  We are a growing economy.  We, like many other countries, have our challenges, but we have great potential.  Come and talk to us and see what we can offer you.  I think Jamaica is now ready for proper and purposeful investment.