$120m Aid Package to Cushion Transport Firm’s Covid Crash

EghtesadOnline: The Iranian government has paid loans worth 28.9 trillion rials ($120 million) to transportation companies hurt by the coronavirus as of Jan. 19, an official with the Ministry of Roads and Urban Development said on Tuesday.

News ID: ۷۸۵۸۶۹

31 January 2021

Mohsen Sadeqi added that the money accounts for 60.2% out of 48 trillion rials ($200 million) worth of financial support allocated to the transportation sector, IRNA reported.

According to the official, the lending covers air, rail and road transportation sectors.

“Out of the total 211,000 applications, close to 120,000 were filed by bus, minibus and taxi drivers, each of whom received loans worth 160 million rials ($667) with a 12% interest rate and a two-year installment repayment period,” he added.

In another move to help the virus-hit transportation sector stay afloat, the Ministry of Cooperatives, Labor and Social Welfare paid loans worth 60 million rials ($250) each to urban bus, cab and school service drivers.

Morteza Zameni, the head of Iran Taxi Union, said that with the help of Interior Ministry, 648,000 drivers have been listed, out of which around 198,000 have applied for the loan.

“Over 122,000 drivers have so far received the money and around 75,000 applications are being processed,” he added.

Zameni noted that another loan program for the public transport sector has been put in place by a group of state-backed organizations to extend loans worth 20 million rials ($83) each to urban cab drivers.

“As of December 2020, more than 15,000 drivers have received the loan,” he said.

The spread of novel coronavirus in Iran since February 2020 lent another blow to public transportation in metropolises, shrinking the number of public vehicle passengers and inflicting an immense loss on the sector.

The government hopes these financial packages can be of help to the public transport operators during Covid-19 and maintain essential mobility services for people.

Taxi Fleet Breakdown

Last week, Ali Aslani, a deputy head of Iran Taxi Union, declared the country’s taxi fleet has incurred a heavy loss of 8.26 trillion rials ($34.41 million).

“The loss includes the wear and tear of vehicles and the revenue of employees and companies directly and indirectly involved in the cab fleet,” he added.

Aslani said that with the spread of the viral disease, the number of urban and intercity passengers has seen a 40% decline and the frequency of taxi travels has decreased by 28%, causing a 65% fall in cab drivers’ average daily earning.

“Close to 124,000 taxi drivers, each with a daily income of 1.8 million rials [$7.5], are operating in metropolises and 296,000 are working in smaller cities with a daily income of around 1.1 million rials [$4.58],” he said.

“The monthly average income of a taxi driver hardly reaches 55 million rials [$229], over half of which is spent on fuel and maintenance.”

The official noted that as the pandemic crisis prolongs, the procurement of health protective materials, including facemask, gloves, face shield and plastic partition for the car cabin, has imposed extra costs on drivers and pushed them to the brink of bankruptcy.

Multiple Pressures

Besides cabbies, the bus fleet and subway continue to suffer from the virus restrictions plus economic constraints.

Mid-October 2020, Mohammad Alikhani, the head of Tehran City Council’s Transportation Commission, said Tehran Metro and Tehran Bus Company have been facing a cash crunch since the US sanctions were reinstated in 2018.

“The spread of the novel coronavirus has lent another blow to the sector, shrinking the number of public vehicle passengers and inflicting a loss of 5 trillion rials [$20.83 million] on the two companies,” he said.

“Over 60% of buses working in Tehran are privately owned and they will stop working if their operations are not economically viable.”

Speaking to reporters, Mahmoud Tarfa, the head of Tehran Bus Company, said challenges facing public transportation are not a new story.

“Tehran’s buses were already inadequate and dilapidated, and unable to provide a decent transport service to citizens. More than half of Tehran’s buses are over 12 years old and every day over 300 buses break down because of technical flaws,” he said.

Tarfa noted that the viral outbreak has exacerbated the sector’s problems, as the bus fleet’s daily frequency has reduced from 1.8 million to under 700,000.

“Bus drivers are not even recovering their expenses,” he said.

Pointing to the fact that the government has overlooked the sector for the past decade, Tarfa said, “We should wait and see if the government officials will eventually extend support to the public transportation system by the end of the current [fiscal] year [March 20].”

Hazardous Vehicles

Talks of transportation income loss and the high risk of contamination in congested public vehicles have raised concerns among officials and health experts.

Yousef Hojjat, the head of Tehran Municipality’s Transportation and Traffic Organization, said many people who do not own a private car inevitably take a bus or taxi, or use the subway, to get to work.

“Keeping a reasonable distance between passengers becomes almost impossible, when the number of passengers increases. The virus is still spreading and infecting people in the city, and the situation has not been normalized, especially in the metropolis.”

Similarly, Mohsen Hashemi, the chairman of TCC, underlined the warnings of Health Ministry and professionals over the risk of contamination in using public means of transportation.

He said the ventilation system of subway trains is concentrated, so the air in wagons is constantly circulating and combining with the air outside the train.

“This means one infected person in a train car might pollute the air in all cars,” he added.

Hashemi noted that social distancing is almost impossible in a crowded city like Tehran unless more buses, taxis and train cars are added to the public transportation fleet.

By Jan. 30, Covid-19 has taken the lives of 57,807 people out of 1,405,414 infected people.

According to Iran’s Health Ministry, 1,196,374 patients have recovered so far.