Amman's Public Transport Project: Mismanagement of Epic Proportions
Governance – AMMAN—Banners hung around the Jordanian capital’s streets starting January 2014 asking citizens whether they “want a long-term and more comfortable solution” for their growing mobility and transport needs.
“Do you lose your temper while driving?” One of these banners asked.
The General Amman Municipality’s (GAM) placards are part of a vast PR campaign meant to restore public confidence in a much-needed transportation program started in 2006, but smeared since by corruption allegations.
Nearly three years ago, the public lashed out against the city’s first comprehensive public transport program, the brainchild of former Mayor Omar Maani, a western-educated technocrat, who was accused but later acquitted from charges of financial corruption and embezzlement.
Maani incorporated functions of urban planning and transportation to the municipality and was the first to introduce an action plan for transport in Amman, promising residents “a huge transformation in the transportation sector within the coming years.”
As Maani was placed into custody, then-Prime Minister Maarouf al-Bakhit pulled the plug on the project despite the on-going construction work, seeing to it that the decision to suspend or resume such work ultimately rested in the hands of the prime minister.
“Once the government stepped in, in September 2011, the jurisdiction became unclear,” said Ayman Smadi,director of transport and traffic management at the GAM. “It stopped being only a GAM project, because the government suddenly assumed a role in it.”
Shortly after he assumed office, Amman’s new mayor Aqel Biltaji -ushered in by the highly anticipated municipal elections last year, settled corruption allegations that marred the capital’s ambitious transport project, jump-starting his predecessor’s plans with blessings from current prime minister Abdullah Ensour.
“There are no corruption suspicions,” he said during a meeting with the 22 city council members in November of last year.
With that he put a lid on the simmering allegations that had brought the Bus Rapid Transit (BRT) project to a screeching halt, after the completion of only two out of 30 kilometers of the network’s first phase.
The detailed engineering and design of the project began in 2009, and construction of phase one commenced in summer of 2010. Streets were overhauled and repaved and trees were planted on both sides of the BRT lanes, setting the scene for what would be the capital city’s first ever coordinated public transport system.
Amman, with its sprawling urban landscape, is home to nearly 2.5 million citizens, according to the department of statistics, a number expected to increase at least threefold by 2025.
The proposed network of BRT and light railway routes were to stretch over 90 kilometres , connecting east with west Amman and North with South, were also to be completed by 2025. The Light railway tracks would connect the capital with its bedrock city Zarqa, from which thousands of people commute everyday to their jobs in West Amman (attempts to bring investors to build the railway network were not feasible, and therefore BRT was suggested instead).
A retrospective glance at the problems that later snowballed into major corruption charges revealed the cursory manner in which various governmental entities dealt with alleged ‘corruption’ related to the project. If anything, the BRT case highlighted an endemic problem of governance in Jordan; powers of certain governmental departments overshadowing others, and the mistrust in the decision making process.
Collating different accounts of when and where the problems started, a consistent story emerged. Minor technical problems that surfaced during the process of setting up the BRT Lanes set the scene for what later morphed into corruption allegations.
Disagreements between on-site engineers arose over the number of supervisors that should have been appointed by the local contractor SIGMA consultants, in addition to complaints about the height of the curb stone and other minor flaws, which were magnified.
Smadi, who oversaw the project through its various stages, said the fault-finding attitude adopted by some members of the project’s executive team, and consequently by other governmental entities, had an adverse effect on the venture and affected public opinion right from the onset before any tangible results had been achieved.
“First we had people saying that the BRT is not suitable for Amman, and when they got over that point, they would say ok, it’s good but not on these axes,” Smadi said. “They say anything just to prove that it’s not a good [project], or it’s not perfect. But we don’t want it to be perfect, [in any project of that magnitude] changes have to be made.”
In August 2011, only one month prior to PM Al Bakhit’s decision to indefinitely suspend operations, the GAM published an “internal audit report” highlighting its flaws. Local news organisations published its details, which revealed -in truncated statements- alleged “errors and violations” in the way contracts had been tendered to the companies SIGMA, Tahhan and Bushnaq, and Jadara. They claimed the GAM’s decisions were not based on the “correct reference specifications.”
The report also highlighted other problems pertaining to the tendering process, such as the fact that all related correspondence, documentation and agreements were in English and that that contributed to the mis-comprehension of many of the terms and clauses that “require specialised knowledge and expertise.”
But it had been the British company Steer, Davies, and Gleave—specialists in transportation planning techniques—that led the team of local consultants in their execution of the project’s first phase, offering a viable explanation as to why English had been the preferred language of communication.
Smadi said the problem actually lies in a lack of “effective communication” between the various governmental departments.
But it was money matters that later shifted other government departments’ attention to the project. Another GAM ‘study’ was single-handedly prepared by the former head of the Municipality’s traffic engineering directorate Khaled Haddadin and forwarded to Al Bakhit, pointing out what the engineer considered to be the project’s main economic and technical pitfalls.
The study presumed that venture would have “long-term” consequences, such as an increase in the government’s debt from accumulated interest of the loan required for the project over a 10-year period.
Haddadin’s report argued that the BRT would have to satisfy an hourly quota of 10,000 passengers and that the GAM and the government will have to bear the costs in the event of falling short of that number.
Hazem Zureiqat, who had been heavily involved in plans and studies for the project during his time at the GAM (between 2008 and 2010) said Haddadin’s study failed to factor in many variables affecting such conjecture, namely the types of buses that will be used and peak vs. off-peak hours.
“In any transport system, the government will have to bear part of the cost, but we designed [the tariff model] based on the prediction that the demand will increase gradually,” said Zureiqat. “There’s nothing wrong with the government subsidizing [the transport system.]”
In October 2011, the Audit Bureau—a regulatory body that monitors public expenditure—published a report echoing Haddadin’s conclusions. It dismissed the project as economically, socially, environmentally and technically “unfeasible.”
Smadi said the Audit Bureau report that was sent to prime minister Bakhit was a carbon copy of Hadaddin’s.
“I don’t know what happened exactly, he sent [the report] to the prime minister, the audit bureau, and the general intelligence department,” Smadi said. “And the audit bureau adopted this report, almost word for word.”
The report, which was also addressed to the prime minister, made recommendations to study “alternative” transport projects that are more “advanced,” and new solutions that “could include the BRT, but under the condition that other routes with less costly designs are chosen.” It also referred to construction glitches previously cited by the press, such as “re-levelling parts of the street and the height of the curb in some sections.”
It was the Audit Bureau’s report that provided a pretext for the parliament to investigate potential “corruption” in the city’s star project.
Before a month had elapsed, a parliamentary committee was formed to investigate the BRT project’s design before construction could resume, and to ensure that no further debt is incurred on the GAM as a direct result, according to official documents referenced by news sources.
The head of the committee, parliament member Ahmad Otoum, told journalists that “citizens’ frustration with the construction work along the university street and their criticism of the project drove the [parliament] to investigate.” He added that the parliament deemed the “location” of the routes in “congested areas” as “unacceptable.”
The parliament used the GAM’s piling debts, which had surpassed JD 400 million (nearly $600 million) in 2011, as grounds for dismissal. Otoum believed that in light of the GAM’s high debts, it was unreasonable for it to take on the French Development Agency’s loan with no guarantee from the government.
The committee concluded its investigations in late 2011, stating that “after looking at the technical report prepared by the ministerial committee, presided over by the minister of public works, and the Audit Bureau and the [GAM’s] internal audit report, the committee has decided to hand over the file to the speaker of parliament, which will in turn refer it to the legal authorities.”
Details of the investigation were not made public, however. The parliamentary committee refused to share its findings with the press, citing such information as “confidential.”
In keeping with recommendations of the ministerial committee he had formed in June 2011, Al Bakhit decided to hire a third-party to evaluate the traffic impact of the project. Exactly one year later, the government hired a consortium of Spanish companies to do the job. The consultants went beyond studying the traffic impact, and yet again re-assessed the project’s “feasibility.”
In February 2013, the consultants recommended canceling the third route of the proposed BRT network connecting Al Mahata Terminal with Customs Square. It also suggested either ‘revisiting’ or ‘postponing’ the construction of the second route (connecting the Sports City with Ras Al Ain in downdown) due to predictions of low demand.
But for nine-months after the recommendations, no official decisions were made.
“Here the politics of the GAM kicked in, meaning, there was a big attack on the project from every side to the extent that nobody wanted to deal with it anymore,” Smadi said. “Why would the chair of the municipal committee, for example, take on a project that he thinks is tainted or has high risk.”
He added that, “you have to have a process, a system that guarantees that decisions that are made on a technical, professional level have very little political intervention. At the same time, you need political support.”
The woes of Amman’s public transportation network
The government’s experience in subsidizing and organizing the public transport sector has been fraught with the conflicting interests of various groups, that have left the service in shambles. Amman’s transportation network remains largely disjointed and incoherent, despite frequent attempts to introduce a new and integrated transportation system to bypass the pre-existing web of routes monopolized by private bus operators.
In addition to hundreds of 30-seater ‘coaster’ buses whizzing through the city’s streets, Amman is also served by the publicly listed, loss-making Comprehensive Multiple Transportation Company (a.k.a al-Motakamelah), that operates through four subsidiary companies.
Al-Motakamelah’s story is riddled with financial losses. Last year, the company reported losses totalling up to approximately JD 28 million, which it attributed to the suspension of a subsidy agreement with the GAM and inequitable bus fares set by the Land Transport Regulatory Commission and the Amman Municipiality.
But Smadi argues that GAM’s four-year agreement with the company was not meant to provide running expenses, but much-needed capital to improve the level of service and expand its bus fleet. He added that payment of these subsidies banked on meeting the requirements outlined in the agreement, which the company had failed to meet.
In addition to missing their deadline to acquire 116 new buses, al-Motakamelah admitted in their annual financial report of 2012 that the new fleet they had bought from the Chinese company Yotung turned out to be “unsuitable” for Amman’s geographic landscape, further burdening their piling maintenance costs.
Following “mysterious” disagreements with the Jordanian government in 2013, the company’s major shareholder, Kuwaiti City Group Company, sold its 51 percent share to the government for JD10 million to “improve the Kingdom’s public transportation sector,” according to the state news agency Petra. The shares were later transferred to the GAM making it the biggest shareholder with a 61 percent stake in the company.
But even with the government and the GAM as the only shareholders, al-Motakamelah continued to sink. In 2011 its losses shot up to JD3.5 million from JD934,575 in 2010. The company reported another JD4.1 million in losses in 2012, and placed the blame on their biggest shareholder, saying they have persistently failed to abide by a five-year agreement signed in 2009 to subsidise it with JD17.2 million in order to “improve the level of service” of Amman’s largest bus operator.
In their latest financial statement published this February, the financial auditor pointed out that the company’s current liabilities exceed its current assets by a little over JD12 million, in addition to accumulating losses that exceed 93 percent of its capital, an indicator of its inability to continue operating.
“No amendments were made to the consolidated financial statements that may be necessary in the case of the company’s discontinuation. Also, the company has not disclosed its plans to settle its obligations and other necessary procedures to guarantee its continuity,” the statement read.
Jordan’s companies law, which includes articles governing public entities, explicitly states that the board members of any public shareholding company should not exceed more than 10 percent of the net profit, and sets the ceiling for bonuses at JD5,000. It also specifies that if the company is making losses, such is the case of al-Motakamelah, then each of the board members should receive “an average of JD20 for each of the board of directors meetings or any other sub-committee, on the condition that these bonuses don’t exceed the amount of JD600.”
Financial statements over the past two years revealed that board members had each received a whopping JD30,000 annual bonus. In addition to that, board members received an annual transportation allowance of JD2,400, approximately 600 times what it would cost to use the bus service the company provides.
In July 2011, the Ministry of Industry and Trade had replaced the board of directors appointed by the Kuwaitis, putting a temporary one in its place under article 168 of the companies law. The law gives the ministry the authority to dissolve the board of a public shareholding company if it was found that it was in financial or administrative dire straits or if it was making losses affecting the rights of its shareholders and creditors.
But article 168 also specifies that board’s temporary 6-month term can be extended for an identical period only twice, yet the same temporary board is still in place. The Kuwaiti investors had objected to the change in 2011 by taking their case to the Jordanian supreme court, but their appeal was turned down.
Since then the level of services has continued to deteriorate.
In the late summer of 2013, one bus skidded on a downhill uncontrollably when its worn-out brakes stopped working, killing one passenger and injuring 16 others. The police department spokesperson confirmed that the driver lost control of the bus when brakes failed him on a steep slope in al-Mesdar street.
A few months later, another bus caught fire while driven on the route servicing the Hashemite University, a route subsidised by the government to help students commute to their far-flung campus at reasonable costs. The fire sparked in the rear tires prompted the driver to stop the bus and evacuate all passengers, local media reported. Billowing black smoke filled the air as the flames engulfed the hull.
Shoddy maintenance and unavailable spare parts are but one of a host of hurdles the bus company is facing.
“If spare parts are available, they fix the bus, if not, we wait until they get some. It is all up to the company, sometimes we use used spare parts,” said one driver, who preferred to remain anonymous for safety reasons.
One short trip on one of these buses is enough to reveal the depth and extent of the problems.
Buses don’t have a fixed schedule, nor do they operate on fixed routes. It was at least twenty minutes or so before the bus arrived at a makeshift stop in the neighborhood Khalda—marked by yellow and red paint on an electricity pole. The driver smoked a cigarette as he waited for passengers to trickle in. With no map to refer to, many of them bombarded him with questions about the best routes to their destinations. The driver patiently answered the spate of questions directed at him.
Fewer than a dozen passengers got on the bus before it started on a long journey interrupted by frequent and irregular stops, too many to enumerate. Outside the UNHCR headquarters in Khalda, a man got on and made frantic inquiries to the driver as to the most convenient way to reach the Syrian embassy in affluent Abdoun. The driver explained that the only way there is is to get off at the end of the 18-kilometer route in Zahran, downtown Amman, and take an 8 kilometer cab trip to his destination. But the embassy is much closer by cab, only 10-kilometers away from Khalda, but four times more expensive. The passenger resigned himself to the journey, took a seat on one of the derelict benches.
In addition to acting as a guide, the driver collected the JD0.5 bus fare from the passengers, and even provided them with change. He explained though that this is a clear violation of the company rules, which forbid drivers to change money for passengers. A farebox is installed on each bus, an inconspicuous metal container with no meter measuring how much money is being dropped in.
The driver explained that the ticketing system introduced under the auspices of the Kuwaiti investors worked more efficiently and relieved the drivers of money-collecting responsibilities. But the new board of directors canceled the ticketing and smart card system in 2011 with the justification that each passenger should pay according to the distance traveled in order not to “equate the fare for varying distances.”
Yet to date, Buses don’t operate on fixed lines. Each bus makes the full trip from the beginning of the route until the end of it and then switches to another.
“The driver is perplexed, what system the company wants to follow exactly, I don’t know,” the driver said.
He added that routes should be fixed, as passengers who heavily rely on the drivers for information and directions “will feel more comfortable dealing with familiar drivers.” More importantly, he said it would be more efficient because then drivers would be able to predict peak times of his assigned route(s).
Still, public transport in Amman is yet to be regulated efficiently
Circa 1950′s, the interior ministry and the municipalities presided over the authority to grant and issue licenses to private bus operators. This practice continued for five more decades, until the Public Transportation Regulatory Commission (PTRC) was set up in 2001 with the goal to plan and regulate public transport.
The PTRC was later renamed Land Transport Regulatory Commission, but despite the cosmetic name change, the city continued to suffer from the dichotomy between urban planning and traffic engineering -handled by the GAM- and the management of transportation.
In 2007, the GAM became responsible for public transport planning and administration as a result of a new law that was passed at the time. Yet in the behemoth and highly bureaucratic municipality, the transportation and traffic departments remain two separate, almost mutually exclusive entities.
The problem with the bus system in its current form is that it provides no incentive for the passengers. The contracts signed between the Amman Municipality and the bus operators generally aim to maximize the number of passengers in one trip and consequently the amount of revenue without actually providing a good transport service, argued Zureiqat.
Smadi said that there must be “a basis to support public transport,” adding that, “We’re working on it and people are afraid of it, honestly, they’re saying how can I as a government sector give money to the private sector. But this is a private sector providing a service in the public domain in a way.”
Former transportation minister Alaa Batayneh argued that the resulting impromptu bus network has repeatedly thwarted government efforts to subsidize and improve the sector, and became more of a commercial sector open to private enterprise.
“[The owners of the coaster buses] inherit bus licenses, treating them as assets,” Batayneh said.
This story was produced as part of the Governance project, a reporting program in Jordan organised by the Thomson Reuters Foundation in partnership with Arab Reporters for Investigative Journalism”ARIJ”.