Treasury Minister for the Buenos Aires Néstor Grindetti announced this morning that the city’s 2013 budget will not include subsidies for the capital’s subway system (“the Subte”).
The news comes just ten days after a similar announcement from the national government stating that it will not dedicate funds to Subte subsidies in its 2013 budget either.
Grindetti explained that the city is not bound by any formal obligation to provide funding for the system. Furthermore, “we don’t have any motivation for incorporating that budget item,” he continued.
To questions regarding the possibility of an increase in fare, Grindetti responded, “the federal government will have to decide that.” Authority over the Subte has been in question—and controversy—since January when the state and city began planning a transfer of control. Conflict over each party’s ability to fund the system has significantly hindered management ever since.
During the initial transfer process in January, the federal government decided to retract funding that had been supporting 50% of the Subte’s operating costs, a move that saved the government $60m monthly. Upon assuming management of the system, Buenos Aires chose to raise the $1.10 fare by 127% to its current price, $2.50.
Without Buenos Aires’ supplementary $30m per month, the transportation company Metrovías will have to find another way to finance the subterranean system. Speculations on price increases suggest a $3.90 fare, though those calculations do not take into account inflation nor wage hikes. Mayor Mauricio Macri has been quoted last month as claiming that a trip on the Subte should cost $5.50.
Any changes in fare are likely to occur at the beginning of the year, when the new budget takes affect.
What an experiment in starving the beast would 5.50 a ride create. Good luck Buenos Aires.