Peru: Modasa benefits from bus route concentration

Two transportation consortiums have benefitted from the crisis that has plagued the Lima Municipality bus routes, particularly the Tacna-Gacrilaso-Arequipa and Javier Prado bus routes. All bus operator contracts have been cancelled by municipal authorities, except for those of the Consorcio de Transporte Arequipa (CTA) and Expreso Javier Prado (EJP), which have become the sole providers for these important corridors.

Snubbed bus drivers believe that the decisions by the Municipality, supposedly motivated by the refusal of the companies to modify existing contracts, were actually meant to favor the CTA and EJP operators, and their main provider of buses – MotoresDiesel Andinos SA (Modasa). Modasa is a Peruvian bus-assembly company, which between 2008 and 2010 provided over 3/4 of the city’s entire bus fleet.

“In practice, they are creating a sort of monopoly in the bus distribution business, favoring Modasa. And it’s suspicious because it is supported by the Municipality. This could be the reason why Mayor Castañeda changed his mind at the last minute and favoured a company related to Metropolitano, a project that grew during his second mandate.” said Mr. Hernan Núñez, part of Diálogo Vecinal, a community advocacy group.

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