Which companies manage the bus services in the metropolitan area of Buenos Aires?
<p><span style="line-height: 1.6em;">A special report published by the General Auditor of Argentina shows for the first time, how bus companies are organized and managed. According to the auditors, the bus industry "tends to concentrate" to the point where one of the two largest bus conglomerates, named DOTA, directly or indirectly manages 31 out of the 136 bus routes. The other company, Plaza Group, is second in line and manages 19 bus routes.</span></p> <div> </div>
The auditor’s goal was to identify how the bus companies are organized in the Automotive Passenger Transport System of the City of Buenos Aires, as well as in the metropolitan area. AGN’s objective at no point was to try to identify how the funds of the subsidized companies were spent nor did it try to find information on the companies’ income and expenses.
After observing the surfacing of business groups that "were gradually conglomerating companies," AGN stated that this is a sector that "tends to concentrate". The auditors said that the Decree 656/94, which changed the regulatory framework of the activity, emphasized the deepening of this process. But the task was not easy, in fact, the agency acknowledged "the difficulty" that the specialists faced when they needed corporate information from the bus companies. To carry out this audit, AGN had to turn to the Secretary of Transportation, the National Commission for Transport Regulation (CNRT), the General Inspectorate of Justice (IGJ), the Metropolitan Department of Corporations, and the Internal Revenue Service (AFIP). All of the information inquired by the auditors was initiated on September 2010 and concluded on December 2011. It took the auditors about a year to obtain the required information.
The Automotive transportation Service of the City and the Metropolitan area of Buenos Aires is made up of 91 companies operating 136 bus routes. In total, in 2009, they raised a total of $ 2,073,304,908 (pesos) and transported 1,571,878,548 passengers on 9,614 units. Of all the bus companies, 58% of them are grouped in various business groups; 42% or the 38 remaining busses are not associated with other businesses, however, these last eight are "multiline", which means they manage between two and four different routes.
The two biggest conglomerates are DOTA and Playa. Of the 53 “grouped” companies, 21 of them work for these two consortium.
The D.O.T.A. Group is the larger as well as the more important of the two. It holds approximately 13 companies: six of which are "controlled" companies, meaning that the group owns more than 50% of the votes needed to define corporate policies; the remaining seven are "connected" buses. DOTA, in a direct or indirect manner manages 31 different bus routes.
The Plaza Group is the second in order of importance. It is composed of eight companies with a shareholder who is directly linked to the Business Group: there are four “controlled” companies and the same amount of “linked" bus routes. There are 19 busses that are also linked to this conglomerate.
Furthermore, 91 bus companies are grouped into five chambers, but different business groups simultaneously participate in different chambers.
To illustrate the dynamics of the concentration process of the bus industry, the report analyzes the evolution of the number of companies and routes between 1987 and 2010. By dividing the companies by the total number of bus routes in 1987 the ratio is 0.85, the calculations for 2010 show a total of 0.66. It’s important to remember that if all the companies were "one-routed" the result to the calculation should be 1. As we move away from this value to 0, the concentration is higher.
This federal watchdog report brings not only the concentration process to the forefront, but also exposes how complex the connections between each bus route are, as well as the difficulties of understanding how each of them is composed. For all this, the Auditor recommended that the Ministry of Transport and the CNRT integrate a method for ongoing monitoring of the evolution of the transport companies.
The auditors explained the case of Bus 179 as an example of the “inter-chamber” and internal relationships that occur in the industry. This is basically an investment because 100% of its shares are owned by four companies, each of which can be found on different business chambers:
• Microómnibus Sur SAC: on CETUBA
• Expreso 9 de Julio SA: not working on National Jurisdiction
• 4 de Septiembre SA: on CEAP
• Microómnibus Cuarenta y Cinco SA: on ACTA.