About 2.4 million Ukrainians are entitled to reduced fares on public transport. In addition to them, there are 11 million pensioners who also travel for free in many cities. To make the financing of travel concessions more transparent, Ministry of Social Policy have already developed a document that provides for the replacement of benefits by payments.
I figured out what the government offers and what the risk of beneficiaries is due to monetization OBOZREVATEL.
How can monetization work?
They started to monetize discounted fares back in 2016. Then by law №1774 provided for the possibility of providing certain benefits, including travel, in cash. And in 2018, the Cabinet of Ministers adopted two resolutions, which approved the procedure for this monetization, but later District Administrative Court of Kiev invalidated it. As a result, practically nowhere this idea was used.
Now the Ministry of Social Policy has again started talking about the monetization of benefits and developed a corresponding document. Back in February it was published on the website Cabinet for public comment. As the Deputy Minister of Social Policy told Vitaly Muzychenko, this innovation will make it possible to equalize the rights of citizens who live in large cities and use many types of transport, and residents of small settlements, where transport does not even run every day.
As you already know, monetization of reduced fares on public transport will not become mandatory. It will be referred to local councils., which must independently determine the form of monetization, the size and frequency of payments, depending on the capabilities of the local budget.
“The form of monetization can be completely different – cash payments, crediting money to the card, or credited trips to the card. Taking into account the fact that electronic systems of fare payment, accounting, etc. are developing in some settlements, the local government must resolve all these issues independently, “Muzychenko said.
At the same time, experts insist that monetization is the only way to enable public transport to develop.
“I hope that the government will be able to put an end to this issue and monetization will be fully legalized,” says the ex-Minister of Infrastructure 2016-2019 Vladimir Omelyan… “Not that the benefit is virtually there, but it is either not provided, or the one who provides, does not receive compensation.”
Who needs monetization?
Carriers… The first to benefit from the monetization of benefits are carriers. In many cities, discounted travel now gives them a lot of problems. According to the law, funds for the travel of beneficiaries must be compensated from local budgets. But carriers often complain: money is either delayed, or not allocated in full. Public transport especially suffers from this.
If the benefits are monetized, the money for each specific trip will go to the company’s budget. Respectively, profits will increase, and more can be invested in the modernization of rolling stock.
Passengers… For passengers, monetization of benefits also makes life easier. Now, beneficiaries often face the reluctance of drivers of private routes to take them to the salon, because this is a lost profit for a particular driver. After monetization of beneficiaries and non-beneficiaries it will be impossible to distinguish, and the problem will disappear.
In addition, if now the use of specific benefits is often limited to the territory of residence, then it will be possible to use funds from monetization in any corner of the country and on any type of transport. And if suddenly you do not use public transport – spend them for other purposes.
“When a beneficiary travels to the metro there and back to buy bread 2 hryvnias cheaper, the local budget costs 16 hryvnias,” explains Nazar Mikolyuk, an expert of the Association of Ukrainian Cities. at the level of 20 trips, it will be much more profitable than free travel, since he will be able to independently dispose of the monetized funds. “
Communities… Compensation for the travel of beneficiaries often becomes a black hole in local budgets; it is a kind of breeding ground for corruption schemes. Even if the money was allocated on time and in the right amount – whether it will reach the carriers is still a question. The monetization system allows make the distribution of funds more transparent.
What are the pitfalls of ideas?
Number of trips… How many trips per month monetize beneficiaries – will decide locally… According to studies in communities where e-ticket is valid, beneficiaries make about 25-30 trips per month. The 2018 Cabinet of Ministers decree established approximately the same minimum social norm – 30 trips. To calculate the amount of monetization, they took the average cost of a trip in the municipal public transport of the region and multiplied it by 30. This made a good sum for small settlements, where transport is cheaper and is not used every day. But speaking, for example, about Kiev, if a beneficiary needs to travel to work with a transplant, this amount will be enough, maybe for a week. The rest of the time you will have to ride for your own money.
“There are always risks, of course,” Omelyan says. “We do not fully know how much compensation Ukrainian citizens will receive. two weeks. But we need to look from the other side, if due to increased profits and improved logistics it will be possible to get cheaper travel, or, as in some European countries, generally free, this issue will disappear. “
Mikolyuk also emphasizes that any benefit cannot be endless, because the budget is limited. Therefore, you need to use funds rationally.
“If the beneficiary is accustomed to travel 5-6 times daily, then monthly he travels 150-180 times. If we take, for example, the city of Kiev, then such a beneficiary costs the city 1200-1440 hryvnia… It’s a pretty good monetization, isn’t it? And such a beneficiary will in any case be dissatisfied with the monetization, because no community will pay him such an amount on a monthly basis. “
Funding problems. Monetizing benefits is an additional burden on local budgets. But can there be cases when the local council accepts the idea of monetization, pays funds to beneficiaries, but at some point it starts having financial problems and residents generally remain without compensation?
“That monetization, that another way of organizing discounted travel, all the same requires significant expenditures from the budgets of communities,” says Mikolyuk… – Therefore, a community that could not properly cover the need for its public transport will not even think about monetization. And as for whether citizens will be left without benefits at all, then, in my opinion, they fully lost it already in 2016, when the state told the communities to choose: to build a kindergarten for them, or, for example, to pay the state joint-stock company “Ukrzaliznytsia” for state privileges”.
The idea of monetization has shown itself well in subsidies, when citizens were able to minimize consumption to save some of the money and spend it on other needs. But would such an idea be successful with travel? Experts support monetization. Undoubtedly financing will become more transparent. Carriers will get more profit and be able to modernize their vehicles. Citizens will get more conditions for mobility. Beneficiaries who traveled a little will even be able to save some of the money… But in big cities, such an idea can turn into regular financial losses for the privileged categories, especially if, using the privileges, they are already accustomed to traveling a lot.
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