Baku: In order to maintain the quality of public transport services at a stable high level in Baku and Absheron, as well as to create a sustainable financing mechanism for the renewal of the bus fleet, a “gross contract” system will be introduced, Deputy Minister of Digital Development and Transport of Azerbaijan, Rahman Hummatov, told APA-Economics.
According to Azeri-Press News Agency, the deputy minister explained that the revenue from fares will be collected by the regulatory body. Part of the fee for the services provided by the carrier will be paid from these funds, and the rest will come from funds allocated by the state. This model is expected to decrease the risks for carriers associated with a decrease in passenger traffic or changes in fare revenues, thus encouraging them to focus on fulfilling contract terms rather than maximizing passenger numbers. The carrier’s profit will depend on compliance with the terms of the “gross contract,” which will incentivize them to improve service quality and adhere to traffic schedules. The regulatory structure will also introduce penalties for non-compliance.
The Deputy Minister further highlighted that the accessibility of services will increase, as carriers will no longer prioritize profitable routes over unprofitable ones. This will ensure a similar level of service on suburban routes and enhance public transport accessibility for the population. The system aims to protect carriers from external factors such as economic crises or pandemics, ensuring the sustainability of the transport system.
An important aspect of the new model is its potential to bring the sector out of the “shadow” economy. By promoting cashless payments for fares, the system will create a transparent mechanism for fare collection, payment to carriers, and justification of their costs and revenues, thus removing the sector from the “gray” zone.