Legal changes could lead to increased funding for Jordanian transport

A significant new law was drafted in 2016, which promises to mark the end of a lengthy period of legislative uncertainty for Jordan’s transport sector if it is passed by the next parliament.

Chequered Past: 

The sector has witnessed a series of temporary or provisional decrees stretching back to 2007, when a major division of responsibility was decided on. At that time, the Greater Amman Municipality (GAM) was given responsibility for public transport within the capital region, while the Land Transport Regulatory Commission (LTRC), then known as the Public Transport Regulatory Commission, was put in charge of everything outside – except in the Aqaba Special Economic Zone (ASEZ).

In 2010 another temporary law was issued, clarifying some of the boundary issues that had arisen as Amman expanded, while also widening LTRC’s mandate to include the whole range of passenger transport, including car hire and taxis. The 2010 law also established an independent funding structure for public transport in the GAM area.

Reorganising: 

The proposed 2016 law essentially expands the independent funding structure to cover the whole country. A new independent authority in charge of funding would be set up to receive JD0.02 ($0.03) for every litre of petrol and diesel sold in the country, as well as licence and permit fees from passenger transport operators. In this way, public transport will be partly subsidised by motorists, a move lauded by environmentalists as well as transport sector experts, who suggest that many of the country’s past passenger transport problems have stemmed from a lack of adequate funding. The new law would also see national standards applied to operating and licensing fees, as well as standards of service, such as what type of bus can be used.

Integrate & Strengthen

Under the law, individual operators would have five years to join together or face a government buyout of their business and/ or route. Incentives for consolidation would also be offered to encourage the formation of larger units. The law states that designated competent authorities are to administer the system, with GAM identified as the competent authority for the capital region, the ASEZ Authority for the ASEZ and the LTRC for the rest of the country.

Yet the law also leaves the path open for other municipalities to act as competent authorities in their jurisdictions, with the LTRC remaining the overarching regulatory body. This is because some cities, such as Irbid and Ma’an, are considered better able to integrate public transport through their own plans for municipal development.

Room For Debate

Some aspects of the proposed law have become matters of contention. For example, the independent nature of the funding authority could be called into question by some lawmakers who wish to see control over funding centralised within the government.

The bill may also be unpopular with individual operators who, in many cases, have run their buses as a family business for many years. “Approximately two-thirds of the passenger transport fleet is run by individual owner-operators, not companies,” Hazem Zureiqat, transport consultant at engineering consultancy Engicon, told OBG. “This makes introducing any change to the system challenging.”

The tax on petrol and diesel will also likely be passed on in higher fuel costs, which poses political hurdles at a time when a large number of Jordanians are already feeling the economic pinch.

Nonetheless, advocates for the bill argue that the provision of better public transport infrastructure will be significantly cheaper for all in the long run. At the same time, if passed, the new law could help establish a formal and firm basis for future growth through the birth of new municipal transport authorities funded by a national programme.

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The Report: Jordan 2016

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