The fight between the national government and the provinces, far from ending, is escalating more and more. After the failure of the Omnibus Law and unexpectedly, the Executive decided to eliminate the so-called Interior Compensation Fund and left it in the hands of the leaders to decide whether or not to subsidize – and how much – transport fares.
The Compensating Fund was created with the objective of subsidizing public passenger transportation by urban and suburban automobiles in the interior of the country through transfers made from the National State to companies providing public transportation services “so that the rates are provided at a lower cost and cover operating and maintenance costs.”
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According to the budget presented for 2024, the Compensation Fund for Public Passenger Transport by Urban and Suburban Automotive in the Interior of the Country represents $117,000 million. This amount included both the attention of the federal social attribute and the reimbursement of SUBE commissions.
But now, the Executive decided to suppress that fund and added more pressure to the provinces' accounts. The Government justified the decision by saying that it is “complying with one of the objectives set at the beginning of the administration” of reducing assistance on supply – in this case, companies – and concentrating assistance on users directly. That is, people will continue to be assisted through the SUBE card with a 55% discount on the ticket rate.
“It is the provinces that have the power to set the cost of the ticket from now on,” they argued in official dispatches. However, the determination will generate greater complications for local accounts, which will now have to define between increasing public transportation rates or providing more subsidies on their own.
The Government eliminated a fund to subsidize transportation in the interior. (Photo: AFP)
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“It will generate more pressure on the finances of municipalities and provinces. Either they adjust the rate or they have to increase the assistance they already provide to the service,” summarized Rafael Skiadaressis, an economist specialized in transportation.
According to their estimates, in addition, the Nation's contribution is between 20% or 30% of the subsidies received by companies in the interior depending on each case, which is why the national Executive has now put local governments at the crossroads of finding ways of financing to cover that gap that remained headless or to free up rates and add more pressure to users' pockets.
What will happen to transportation rates in the AMBA
The situation is different in the AMBA, where this week a new increase was confirmed that brought bus fares to a minimum ticket of $270 and $130 for trains. There, the cut of the Compensation Fund internally does not represent changes in the tariff tables, since it is previously required to call a public hearing which, although not linked, presents the debate to readjust the costs. That instance, in principle, is expected in April.
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“This decision does not imply an immediate impact on the AMBA. The rate remains in force and a new public hearing should be called. For now, the adjustment is bimonthly and there should not be an increase until April unless a hearing is called,” explained Luciano Fusaro, vice president of the Argentine Transportation Association.
In the Transportation Secretariat led by Franco Moggeta – close to the governor of Cordoba – they maintained in relation to the AMBA fare costs that they decided to “end the freezing of fares that had been inherited from the previous management in trains and buses in the Metropolitan Area of Buenos Aires (AMBA) for lines of national jurisdiction, thus giving the rate greater prominence in covering the costs necessary to operate.”