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São Paulo | The Triumvirate of Transport

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Topic: Who runs the São Paulo bus system?

by  Guilherme Boulos

Source: Viomundo

Originally published in the Folha de S. Paulo.

Translated excerpt by C. Brayton

The predominant force in the city bus service is José Ruas Vaz, also known as “The Baron of the Asphalt” or “The Pope of the Turnstyles.” He is the founder of the Ruas Group, which controls no less than 53% of the rolling stock and receives 56% of the public funding. He also controls bus transport in Guarulhos and other cities in the greater metro area.

Vaz is a man of many enterprises, all of them oddly interrelated. He is, for example, a partner in the consortium that manages advertising at bus stops and the owner of Caio Induscar, which supplies bus chassis to its own sister companies as well as to competitors. If a sector as monopolistic as this can be said to have competitors, that is.

Ruas Group is also known for filing for the bankruptcy of debt-laden companies and then refounding them in order to make it difficult to collect its debts. In 2013 it faced 242 cases of execution for debt. Its pension plan contribution to the INSS reached R$ 750,000.

This is the gang that rules supreme over public transport in the largest city in Brazil.

Another major player in this area is Belarmino Marta, owner of the Belarmino Group, which comprises more than 20 companies that control public transport in various cities, as well as a portion of the capital city.

Along with Ruas Group, Belarmino is owner and partner in a number of Mercedes Benz concession-holders. Mercedes furnishes 65% of city buses.

A Mercedes sales director, testifying to the parliamentary inquiry (CPI) into the transport scriminalityector, produced the following pearl of wisdom: “They sell the bus and microbus chassis to themselves.” Clever, is it not?

The level of cartelization and criminality in the sector has become self-evident. Zero transparency. They have turned a public concession into a means to extort society.

Fares can and should be cut. But where to cut? The profits of the concessionaires, together with a thorough-going reform in the management of urban transportation. The creation of a public transportation company that would manage the system directly is an urgent and necessary measure.

Profitablity does not combine well with quality. A for-profit transport system means that riders must cope with overcrowding and expensive fares. An example of this is the bizzare practice of paying the buses according to the number of passengers carried rather than distance covered. In other words, it is a matter of carrying more people at a lower cost. The result is overcrowding.

Popular demonstrations and the new round of auctions for transport contracts scheduled for March represent an opportunity to question this logic, to begin treating public transport as a right.

What remains to be seen is whether anyone will have the courage.

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The Tupi FTC: “Badin’s the Boy to Bust the Trusts!”

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I read it in one of those newspapers today, the Jornal do Commercio (Rio), I think it was. That, for the time being, is how I pay the bills.

A posse do novo presidente do Conselho Administrativo de Defesa Econômica (Cade), Arthur Badin, acabou se transformando em ato de independência do órgão antitruste. Durante o evento, o ministro da Justiça, Tarso Genro, afirmou que os conselheiros não vão ceder a pressões indevidas ou corporativas ao julgar fusões e aquisições de empresas no período de crise internacional.

The swearing in of the new chairman of CADE, the Administrative Council on Economic Defense, Arthur Badin, wound up turning into a declaration of independence by the antritust regulator. During the ceremony, Justice minister Genro said that the commissioners will not cave in to improper or corporate [sic] pressures when sitting in judgment on mergers and acquisitions during the international financial crisis.

The sale of the Grupo Abril’s TVA cable TV operator to Telefônica has yet to be ruled on from the point of view of market concentration, I think I read, which is what first attracted my attention to the changing of the guard. This is a deal that a client might actually pay me to be interested in.

The Itaú-Unibanco merger is set for a decision by CADE on 21 November, I think I just read.

So little time, so much to know.

Para Genro, o trabalho do Cade deverá crescer com a crise externa, pois as empresas deverão alegar dificuldades de captação de créditos juntos aos bancos para justificar a realização de fusões. Outro problema que deve surgir, segundo o ministro, é o aumento de casos de cartel, já que, num período de perda de faturamento, algumas empresas podem tentar compensações através de acordos ilegais com concorrentes, como fixação de preços ou divisão de clientes.

In Genro’s view, CADE’s role should increase as a result of the crisis abroad, as companies allege difficulty obtaining bank credits in order to justify mergers. Another problem likely to emerge, the minister said, is an increase in cartel cases, since at a time when revenues are down, some companies will try to compensate by making illegal deals with competitors, such as price-fixing or divvying up their customer bases.

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Lords Board: Journalism is Dead, Long Live the Famiglia Murdoch

British House of Lords Report, July 2008

It was put to us that because of the proliferation of ways to access the news, it is no longer necessary to be concerned about the regulation of media ownership. We do not accept that argument. Much of the news available on the internet and on the new television channels is not new. It is repackaged from elsewhere. The proliferation of news sources has not been matched by a corresponding expansion in professional and investigative journalism. It is still possible for one voice to become too powerful to be acceptable in a healthy democracy.

A new policy report from the U.K.’s House of Lords, with recommendations on the regulation of ownership concentration in media markets, poses the 64,000 golden-guinea question in plain old Anglo-Saxon English:

If technology helps news organizations cut their overhead dramatically — This article is being published on the Web for free, for example, a fact that all good utopian futurists assure us is going to revolutionize life, the universe and everything, once and for all, bringing peace, democracy, and a new Golden Age — then why do they not spend the peace dividend from the declining hegemony of the unionized print shop on doing more journalism?

This makes no economic sense.

While there has been a proliferation of ways to access the news, there has not been a corresponding expansion in professional journalism.

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