Friday, September 21, 2018
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Transport modernization will paralyze economy

/ 05:14 AM January 12, 2018

President Duterte should consider deferring the transport modernization program until further study. At first glance, the new jeepneys endorsed by the Department of Transportation and Department of Trade and Industry designed locally but with imported Euro-4 class engines, look sleek. They are supposed to be energy efficient and environment-friendly. But looking closely at the deadly repercussions may warrant a change of mind.

First, the cost of acquisition and maintenance of the high-tech imported Euro-4 class engine will result in the increase of jeepney fares from P8 to about P25. The public will raise hell and would rather stick to the old jeepneys. The cost of transport of food by Euro-4-compliant trucks would triple, which may cause widespread food crisis in the cities. The milkfish you buy for P120 per kilo may jump to a ridiculous P360. One Euro-4 jeepney will cost a staggering P1.6 million. Some people will make a lot of money.


The downstream effect of higher cost of transport for all other commodities can in fact paralyze the economy if the modernization program is fully implemented on the 9.26 million registered vehicles nationwide, of which jeepneys are a mere 300,000 or 3.2 percent. Why focus on the 3.2 percent? Is it because they fear massive protests? Laborers will push for increase of minimum wage to cope with expenses. Strikes in factories will spread. These alone will cost the President a political crisis.

The complex Euro 4 is completely computer-driven, even its injection pump system. If it breaks down, in most cases, the entire computer is better replaced than repaired. It will take time for non-IT-capable Filipino mechanics to learn the ropes in Euro-4 engine maintenance. The more high-tech, the more costly. End result is dependence on expensive foreign transport multinationals and the death of our thriving cheap jeepney industry.

In the United States, Volkswagen was charged for deceiving customers on its “clean diesel” ad for its Euro-4 engine, using software to mask emission levels. VW faces class-action suits across the entire European Union. So Euro 4’s claim of being environment-friendly is under question. The EU wants to phase out the unreliable Euro 4 but the Euro 6 replacement is still being tested. We end up becoming a dumping ground for rejected technology. Replacing 300,000 jeepneys nationwide at a staggering cost of P447 billion is a massive undertaking which may take five years. By that time, the Euro 4 is obsolete. It may also trigger a crisis in the LandBank and the Development Bank of the Philippines as financiers.

Past Senate hearings are asking who are really behind the Euro-4 PR blitz. Are there invisible forces orchestrating it not known by President Duterte, like government officials in cahoots with multinationals, similar to the Dengvaxia scandal? Certain media outlets are pushing feverishly for the Euro-4 jeepneys without explaining the negative effects. A few will benefit in billions at the expense of the national economy.

If we replace our jeepneys and regret it later because Euro 4 becomes obsolete, there is no turning back. It is a waste of money, a regression, not modernization. Jeepney phaseout will affect about 10 million Filipinos, including 2 million in downstream industries. Jeepneys are too big to just sweep away on a knee-jerk move based on insufficient studies.

President Duterte should reconsider.


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TAGS: economy, energy efficient and environment-friendly, Euro-4 class engines, President Duterte, transport modernization program
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