The Next City
September 21, 1997
Crack up in Rio
AT 3 A.M. ON DECEMBER 10, 1985, soon after the fall of Brazil’s military regime, government officials arrived at the homes of civil servants across the state of Rio de Janeiro, bundled them into vehicles and set off for a mission so secret that many of the sleepy participants, themselves, were kept in the dark.
Later that morning, bolstered by phalanxes of police, the government officials stormed 16 head offices across the city and ordered everyone inside to leave, taking absolutely nothing with them. The government officials then sat the dumbfounded civil servants in their previous occupants’ still-warm chairs. In this way, Rio’s government began the expropriation of 16 of the many private bus companies that provided its residents with 97 per cent of their bus services. The government completed the takeover later that afternoon, when the legal documents allowing the expropriation were executed. Prior to the takeover, the government’s sole public operator, Companhia de Transportes Coletivos (CTC), owned seven per cent of Rio’s buses. After it, more than one bus in four belonged to the government.
The takeover was shorter and less bloody than the military regime, but it nevertheless left its mark in the public consciousness. Rio will soon ruefully mark the 10th anniversary of the reprivatization of the 16 companies.
Among its many justifications for the military-like operation, the Rio government cited safety concerns. One year later, the number of accidents at Real, the largest of the expropriated companies, more than doubled; at Vera Cruz, passengers saw an almost 10-fold increase in accidents. Overall, the number of accidents in the nationalized fleet rose from 1,031 to 2,391, an increase of 132 per cent.
The phenomenal increase in the number of accidents was all the more startling in that it accompanied a dramatic reduction in the number of buses plying Rio’s roads. Although the government justified the expropriations with vows to increase service, within two years of the public takeover, Real lost one-third of its 297 buses; Oriental, the second largest bus company, lost over half. All told, the government scrapped 40 per cent of the once private fleet. Even CTC became overwhelmed in the chaos precipitated by the takeovers, losing 75 per cent of its fleet. The government’s satisfaction at owning over one-quarter of Rio’s buses vanished as it saw its share drop to 11 per cent. Meanwhile, one customer in seven abandoned the bus, which had accounted for 80 per cent of the 12 million public transit rides Rio passengers took each month.
While the public owners were pulling buses out of service, they rapidly built up their labor force to meet another objective in the government takeover — improved working conditions. To relieve overworked drivers and collectors, the operations and maintenance staff of the expropriated companies increased by 23 per cent. Administration staff received more generous relief, swelling to almost two and a half times its former size and giving the new publicly owned companies an average of 14 employees per bus, compared to the private sector’s five. Most of the new administrators, including the civil servants rounded up in the original dawn raid, had no knowledge of the public transit business.
While staff levels skyrocketed, the quality of service plummeted. The government made no investment in training its personnel nor in its fleet, leading to an almost doubling of the fleet’s average age, from 3.2 to 6.2 years. The number of vehicles that outlived their useful lives — seven years — soared from five per cent of the fleet to 24 per cent, violating the 10 per cent maximum decreed by law. The deterioration affected CTC even more than it affected the expropriated companies. Less than half of CTC’s fleet operated effectively and 75 per cent had trouble staying in service. Seventy-one per cent of CTC’s fleet exceeded its maximum legal age.
The government chose its expropriation targets carefully, selecting the largest of the bus companies with the most modern fleets and soundest finances. However, the expropriations were also designed to teach the private companies — which were a thorn in the government’s side — a lesson.
In 1983, after the government fixed fares at an artificially low level, bankrupting two companies and preventing others from purchasing new equipment, the companies fought back by organizing themselves into a lobby and arguing effectively for higher fares to keep up with inflation. The government expropriated the companies that lobbied hardest, and to justify the expropriation told the public it would decrease the fat profits of the companies’ owners. The government’s plan eventually failed even here — the owners took the government to court and won fair compensation for the seized assets.
After two years of running these once-profitable companies, the government found itself with a debt of US$121 million, which it could not repay, and the prospect of adding to that debt year by year. It capitulated, reprivatizing all 16 companies. CTC once again became the sole government-owned bus company.
Within two months of the January 1988 reprivatization, the 16 companies miraculously managed to increase the number of buses servicing Rio’s streets by two-thirds, restoring the buses scrapped under government ownership and winning back most of the riders the government had abandoned.
But not all was as before. In that two years, the CTC lost most of its fleet, leaving it with a mere three per cent of the market. Its bloated staff became even more bloated; especially in administration, which employed 40 times as many employees as a private company running the same number of buses (1,123 compared to 27). And the state of Rio de Janeiro had a debt $121 million greater than before.
Milton Keynes can’t hold its liquor
DURING THE ENGLISH CIVIL WAR, soldiers marching through the village of Sherington in the borough of Milton Keynes rested, ate, and drank at the White Hart pub. Over 300 years later, Milton Keynes Borough Council is determined to keep the building as the village’s watering hole — whether or not its owner wants to be a pubkeeper.
The dispute over White Hart’s future began after it became unprofitable, prompting its owner, Phoenix Inns, a chain of 1,700 U.K. pubs, to sell it. Knowing that the building would draw a better price as a home, the company applied for a residential permit. But the council refused, citing a 1992 local government plan to keep commercially viable pubs open, even though the borough’s senior planning officer, Caroline Clapson, admits residential use is worth more.
The highest bidder for the building had no pubkeeping ambitions, and proceeded to use the six-bedroom home and its pleasant surroundings as his home. But domestic bliss in the village of 950 was not to last. The council again refused to allow residential use, claiming other parties were now interested in running the pub. The owner appealed, took his case to the high court in London, and finally lost his challenge. Acting like the village social director, the court declared, “The proposals for change of use . . . would be of significant harm to the social amenities of the village.”
But the court decision was a hollow victory for the Milton Keynes council. Although Clapson claimed the high court’s decision “shows the value of an adopted local plan aimed at protecting pubs,” the White Hart now stands empty. The council can stop the owner living in the building but, as Clapson puts it, “we can’t make him run a pub.”
Nova Scotia cleans up on cow patties
IF NOVA SCOTIA’S GAMBLING CZARS are from hell, could the province’s new premier possibly be from heaven? We can’t say. But his intervention was certainly timely, if not divine, in the cow patty bingo affair.
What, a gentle city-born reader may ask, is cow patty bingo? As the noun suggests, it’s a game of chance based ever-so-loosely on its better known namesake. And the adjective denotes the equivalent of the spinning ball — a bovine chip, cow pie, patty, call it what you will (but please be decorous retelling this tale at work or social functions). Organizers mark off a compound in squares, and players wager on which one receives the first droppings of a heifer loosed to wander. It is — we’re not making this up — much watched at rural festivals.
Typically, half the wager goes to the winner, half to a good local cause. In Chester, for example, the $600 or so the game nets during Old Home Week pays for prizes at the children’s pet show. In Annapolis Royal it helps pay for Natal Day’s fireworks finale.
This isn’t big money in a province where gaming, more than 85 per cent of it commercially run, rakes in $760 million a year. And where the provincial government gets, through licences or a regulated cut, well over $100 million in profits. But enough was at stake to attract unwanted attention from the Nova Scotia Alcohol and Gaming Authority.
No more cow patty bingos, the commission decreed on July 17 — two days before the Chester Old Home Week was prepared to milk festival-goers for the kiddie-prize money. “While the scheme may at the outset seem fun,” intoned the commission, “it raises a number of concerns which affect its ability to be licensed, particularly with respect to the honesty and integrity elements of the lottery.”
In other words, the commission seemed to be saying, some scurrilous cheat might train the cow to “go” on a certain square.
Rural folk nearly choked. The heifer is chosen at the last moment — in essence, the first one caught from the herd of a farmer who volunteers the use of his animal. The organizers toss coins to determine from which corner of the compound to release the beast. And, the bewilderment underlying it all, who would bother trying to train an animal for a once-a-year, penny-ante affair?
Enter Russell MacLellan. Hours before his formal swearing in as premier on July 18, he left his mark by decreeing that the planned bingos could go ahead. And — here is where the question of motivation, political or divine, remains open — he didn’t even ask for a piece of the . . . er . . . pie.