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Pedro Pablo Errázuriz, Minister of Transport and Telecommunications

Four years after a fleet of new green-and-white buses hit the streets as part of Santiago’s public transport system Transantiago, they have become like their predecessors – the yellow “micros” that used to roam the city’s streets - the most reviled vehicles on the road.

And not just by those who use them. A show of hands at a recent AmCham breakfast with Transport and Telecommunications Minister, Pedro Pablo Errázuriz, revealed that while most members had a bad opinion of Transantiago, few had taken the bus to the Intercontinental Hotel that morning.

Errázuriz, who took over the portfolio from Felipe Morandé in January at the request of President Piñera, knew his job would be challenging. That is because Transantiago, which was designed during the government of former President Ricardo Lagos and implemented in 2007, has become synonymous with inefficiency and failure.

“People don’t just feel ambivalent about Transantiago, they strongly dislike it,” he told AmCham members.

But this should not surprise anyone who has spent time in Santiago. Buses are frequently late or full and nearly 20 percent of users avoid paying by slipping past the ineffective turnstiles. The government subsidized the system to the tune of US$400 million in 2010, but the basic fare keeps rising and is now US$1.20, nearly double the price when the system was launched.

Even the public image of the Santiago Metro, which used to be considered a jewel in the city’s crown, has been tarnished mainly because more people – around 2.5 million daily compared to 600,000 before Transantiago – now prefer to cram into a subway car than wait for the bus.

According to a 2010 survey by market studies firm Collect GfK, the Chilean public’s net satisfaction with Transantiago is minus 32 percent, compared to an average of plus 50 percent for public services in general. Even those users who are happy with their own bus route, give Transantiago a negative rating overall, said Errázuriz.

So where did it all go wrong for a system that began with football legend Iván Zamorano as its public face? To begin with, expectations were set too high. Users were promised a modern, efficient and economically sustainable system, but what they got was something quite different.

Transantiago introduced segregated corridors and a new route system consisting of five trunk lines and nine secondary routes, which was supposed to make it easier, and cheaper, for people in the suburbs to get to work. In practice this system means some commuters have to transfer several times – from bus to bus or bus to metro - to get to work, but it has had some positive impact.

“Transantiago has been a great benefit to the city in terms of lower noise levels, less pollution and less congestion, it’s a much more liveable city,” said Erazzuríz.

In addition, users pay a single standard fare no matter how far they have to travel and the rechargeable BIP fare card has been very successful, eliminating the need for bus drivers to give change or carry large amounts of cash.

But the quality of the service depends to a large degree on which route and bus you are on. This is because the trunk and secondary routes were awarded by public auction to different private operators, but some are better evaluated than others. The secondary routes, in particular, receive scathing reviews.

The infrequency of buses is one problem, which is partly due to the failure of centralized coordination, but other problems include the quality of customer service and, increasingly, fare evasion which has angered paying passengers.

“It’s like someone shoplifts but the storeowner does nothing and then asks another customer to pay for the stolen product,” said Errázuriz.

According to Errázuriz, these problems are the result of the system’s poor design, which makes the state responsible for its operation but allows private companies to drive the buses. This arrangement, under which operators receive fixed payments from the state, leaves them with no incentive to improve the quality of service or to crack down on evasion.

Most of the system’s 11 private operators are also deeply in debt and have difficulty financing basic repairs or paying their drivers a decent wage. “If they have to replace a flat tire on a bus, they go bankrupt,” said Errázuriz.

One solution is to transfer more responsibility to the operators while the state focuses on quality control and enforcement, but this requires complex negotiations with the operators.

Specific improvements must also be made at an operational level to improve the frequency of buses, routes and customer service. “There are many areas to improve,” said Errázuriz.

But it could be worse and part of the government’s task is to show Chileans that Transantiago is better than they think. Chileans have a tendency to “see the glass half empty” but Transantiago is “by far the best transport system in Latin America”, said Erazzuríz, adding that comparisons with rapid transit systems in Bogota and Curitiba are misleading because both are much smaller than Transantiago.

Minister Errázuriz also touched on other issues during the breakfast including digital TV and the debate over the regulatory framework for public broadcasting, which he said could soon be a non-issue given the explosive growth in the number of Chileans watching video on the Internet.

Other pending issues include deciding where to allow new antennas, introducing number portability for fixed lines and installing high quality broadband connections at 11,600 schools throughout the country by 2012.

Julian Dowling is editor of bUSiness CHILE