What Misión really matters? Misión Cheap Gas

While everyone is busy talking and worrying about these intentionally symbolic US sanctions against Venezuelan state oil company PDVSA, there is a real news story happening in Venezuela that is getting little play. The Caracas Metro is tripling its fares, from 0.50 bolivars to 1 bolivar in June and 1.50 in December. Meanwhile, a friend who takes language classes at a Bolivarian University, President Hugo Chavez’s new public university system, tells me that the university abruptly announced it would start charging tuition. Retroactively.

Now, I neither have a strong opinion about these fee hikes, nor do I feel I have much of a right to an opinion — this is the definition of an internal matter. However, I think it’s worth pointing out that the biggest Venezuelan public subsidy is to motor fuel. It’s hard to quantify exactly, but if you take PDVSA at their word that they sell 442,000 barrels a day of gasoline and diesel to the internal market for an average of about $7.21 a barrel, that’s currently an effective subsidy of about $110 a barrel, or $48 million a day, or $18 billion a year. Each year, that money could buy about a dozen new entire Metro lines (at least if they were the economical kind, rather than the gold-plated stuff pushed by gringo export-pushers in the 1970s). And language tutors for all.

17 thoughts on “What Misión really matters? Misión Cheap Gas

  1. Kepler

    Go figure.
    My compatriots have such an irrational AND very stupid attitude towards petrol (me llevo las manos a la cabeza en desesperación)

    They are charging retroactively for language courses to students at the Bananarian universities?
    For less than that the extreme left were burning lorries and cars at Plaza Venezuela while I was a student at the UCV before Chávez came to power. They did that all the time, they did that once because the cafeteria increased the price for a complete meal from 1 (old) Bs to 2 (which was at that time already ridiculously symbolic, for anyone, even with little money as I was back then).
    Those exteme lefties are now probably PSUV deputies and stuff like that.

    Venezuelans will riot if petrol prices were to rise meaningfully and yet a poor family would need to sacrifice one month’s salary to buy all the books 2 children need for their basic education in our free schools.

    Here in Europe almost all computer engineers, neurologists, economists, physicists I know went to free, public schools, most of them in the countryside and they did not have to pay a cent for their books.
    The “reasoning” in Venezuela goes like this: “oil belongs to us, we have a lot”. They should really start giving Venezuelans crude oil in canisters and tell them: OK, go and process it yourself, but return the canister…or better still: let them use their power to pump it out of the field. Stupid, so stupid!
    And let’s not talk about “opportunities lost”.

    We definitely have different priorities.

  2. Elio Ohep

    Sorry, but the Metro hike is understanble and nessesary, is now practicly free.

    The Metro of Caracas was design as an institution to operate within its fare structure, that way no goverment subsidies were needed, so tSorry, but the Metro hike is understandable and necessary, it is now practically free.

    The Metro of Caracas was design as an institution to operate within its fare structure, that way no government subsidies were needed, so there was a guaranty it would provide its service without waiting for government money. In the past 12 years, Chavez scraped that philosophy, results = Metro service chaos.

    By the way the Metro of Caracas, was design to service more than one million passengers per day with 90 seconds intervals between trains, there is no way you can have such service with and economical kind of Metro lines, so your gold-plated stuff pushed by gringo export-pushers in the 1970s, was the only way to go !

    I don’t se the gold plated, I only see a 1980’s State of the Art, Metro System that can move 40.000 passengers an hour, at that time no other system could operated under those conditions, perhaps bronze plated ?here was a guaranty it would provide its service without waiting for goverment money. In the past 12 years the scraped that philosophy, results = Metro service caos.

    By the way the Metro of caracas, was desing to service more than one millon passangers per day with 90 seconds intervals between trains, there is no way you can have such service with and economical kind of Metro lines, so your gold-plated stuff pushed by gringo export-pushers in the 1970s, was the only way to go ! I don’t se the gold plated, I only see a 1980’s State of the Art, Metro System that can move 40.000 passengers an hour, perhaps bronse plated ?

    1. Kepler

      I agree with that. Still, they also need to increase petrol prices significantly. To do that they have to carry out a permanent education programme…but then somehow they seem uncapable of doing that.

    2. sapitosetty Post author

      Elio – your point is well taken about the fare hikes. But my point isn’t to debate that, but rather to point out that they wouldn’t be necessary if the government saw the Metro as a higher priority than motor vehicle fuel. Choices are made. I would much rather see market-price fuel and a free subway than vice versa. Of course at 1.5 bsf per trip, it’s still well subsidized. No problem.

      About the gold-plating: This may not be the place for this debate, but the BART-style system was never the best for moving large numbers of people, quickly. With its proprietary switching system, track gauge and faregates, that system has always been prone to breakdowns. It has been very controversial back in San Francisco, where it was invented, and in Washington DC. Every new extension costs more money, as builders must continue to rely on the “state of the art” materials from the 1970s. I think it’s perfectly apt to compare it to the Santiago Metro, which runs on 100-second headways. Building two entirely new Metro lines from scratch, with current prices for parts and labor, was budgeted at $2.X billion, which will likely increase, let’s say to $4 billion, as land acquisition costs and labor costs are going to rise. By today’s standards, that’s cheap. The reason that costs are low is that with standard track gauge, switches, etc and a very transparent bidding & contracting system, they get competition among suppliers.

      Honestly I don’t know the whole story of how Bechtel got the contract to design the Caracas Metro, but I have long wondered if it had anything to do with the “economic hit men.” These post-oil-boom, debt-financed megaprojects were built all over the developing world in the 80s and there was often a lot of behind-the-scenes nastiness to ensure that one country or another got the contracts, never mind whether they had the best technology.

  3. Francisco Toro

    Oh I love the Universidad Bolivariana tidbit! Chamo, could there be a clearer illustration? These guys want to convince us that their utter disdain for property rights and the sanctity of contracts is ok because only fatcat capitalists will pay the price…but they don’t honor their commitments to their own language tutors any more than they do to ConocoPhillips. I’m gonna steal that one…

  4. Elio Ohep

    Epa !

    You can never compare a heavy duty system like Caracas Metro that moves trains at 90 seconds intervals with 40.000 passengers per hour with the Santiago Metro system, which has much less operational capacity and was designed to move less people.

    And by the way the Santiago Metro is just a copy of the old lines (1960) at Paris RATP systems that were never meant to move mass transit loads.

    I know the BART system well, and inside out, the Caracas system was design by Parson Brinkerhoff, Quade & Douglas, the same firm that design the Bart system, but 10 years later and with the same of the state of the art technology, but without the bugs and a design to work in a dense mass transit systems of Caracas, unlike BART.

    Bechtel, did work for engineering part of the system, specs for rail , cars, etc., however, the design of the operating system did had some changes due to the French manufactures, but they did have to follow the specs of the integrated system.

    Remember, there was not experience what so ever in Venezuela in rail or mass transit transport, only those who when abroad and study transportation in the US and European Universities had the technical knowledge, no operational experience, we had operational advisor from London Transport, and did all the operational training certification in London and travel to Paris, Sao Paolo, Santiago, Honk Kong, Mexico, Tokyo to get further training.

    My MBA from Northwestern’s Kellogg is in Marketing and Transportation, after graduation I work in the CTA – Chicago Transit Authority and my first job back in 1975, in Venezuela was in the Caracas Metro, after 10years, I left as Operations Superintendent. I did my operational training in London Transport for 1 year and in Paris RATP 6 months, and had training stages in Sao Paolo, Santiago, Mexico, San Francisco Bart, Hong Kong, and Tokyo and made short visits to new Metro systems in Europe, Lille, Tyne and Wear, Marseilles, Glasgow, Montreal, Toronto, MARTHA, WMATA, etc.

    Later, I did have my own transport consulting company and did some work in Venezuela in conjunction with ATE Management Inc, a large US company that manage many transport systems in the US.

    1. sapitosetty Post author

      Wow, I had no idea you were a transport guy. That’s great.

      Most of what you’re saying sounds good, but the part about capacity seems a bit off. Yes, Caracas is better than BART — 6 doors per car rather than 4, fewer seats, no carpets or upholstery to filthify. But the Santiago metro now carries over 2.2 million passengers a day (in a day of less than 18 hours, so more than 120,000 passengers an hour) and is rarely so crowded that anyone is forced to wait for the next train.

      While they did build some lines with lower-capacity rubber-wheel systems, I don’t think it’s fair to call it anything but a heavy-duty system at this point. It’s a really impressive subway. In all of the Americas, only New York, Sao Paulo and Mexico City have greater ridership.

      1. Elio Ohep

        One thing is the ridership or passengers capacity of the whole system and another one is is the operational capacity of the system and in this case, when ones talk about the maximum operating capacity is in one specific point, the maximum capacity of the Caracas Metro is 40.000 per hour in line one, at any one station, 90 seconds interval between trains.

        At that time only the Hong Kong Metro had the 40.000 per hour operational capacity and similar intervals, and they carry a lots of more passengers in one line, their cars have double the capacity of ours, that is the reason they have to use catenary wires or overhead electric system, they use a lot of more electricity power to move their trains due to the weigh of the equipment and the people.

        Santiago Metro does not compare at all in operational capacity with the big ones, in Latin America at that time the only that was on those leagues with Caracas was the Sao Paulo Metro, even do Mexico has one of the higher ridership, in operational capacity is not even close to any of the other ones, Parisian rubber wheels systems are build for those liens with less capacity per hour requirements.

        Everybody in the business know that Mexico Metro is not the one to copy, they got the Parisian rubber wheels system and they are stuck with it, very , very inefficient for the amount of passengers they have, I think they might also have a problem with the terrain.

        It is very costly to have a Metro that can put 90 seconds intervals between trains and a lot of 40.000 passengers per hour at one point, everything has to be automatic state of the arts technology, but it is necessary to be able to move that load.

        I’m sure that somewhere now there is a mass transit systems that is more efficient, but the Caracas Metro is very efficient when is up to par, now is just pure junk, intervals average 4 minutes and the capacity per hour is just 10.000 passengers, is just a mess.

        Did you know that since 2009, numbers of passengers in line one has decrease, last year it was just under 1 million per day, people don’t want to be jam pack and waiting in a hot humid station 5 minutes, so they take the crazy camionetas, or like some of my craziest friends that take Moto Taxis !

  5. westslope

    Interesting thread. In some respects, the most important ‘technological choice’ is how society manages access to and use of the Common Property.

    Society does that one well and choosing machines turns out to be easy. Maintenance is easier. Recapitalization is easy. Upgrading is easy.

    On the other hand, if concerns driven by ‘equity’ and ‘generosity’ starve the public asset and perhaps destroys it, then fixing things becomes very difficult.

    1. Elio Ohep

      The technology choice has to match the system requirements as best is possible at the least cost, in Caracas we did just that.

      For the first 20 years, the systems has operated great, increasing ridership in line one to over 1 million passengers per day, up to 90 % of the fleet operational on a daily basis, but in the last ten years, everything in Venezuela has been neglected, it is more important in the nationalized or government companies to have the political pal, than the best professionals.
      Results, Metro, electricity generating and distribution companies, water , health, etc, everything is been neglected and nothing works now.
      Is a question of competence over politics.

  6. jeffryh

    Elio, do you know how Caracas subway compares with those in Toronto and Montreal? I never hear of a problem here (Toronto–I ride daily) and Montreal has a good reputation here–but everything I hear about Caracas is terrible, with riders arrested for protesting, even.

    Is that all a function of larger loads in Caracas?

    1. Elio Ohep


      Caracas is a narrow valley city of 25 kms long and no more than 5 km north-south surrounded by mountains, the Metro was build in the 70’s as a system or network of 5 lines to be ready in 2010 with and estimated 2.5 millions passengers per day, obviously we are way behind.

      The back bone of the system is line 1, designed to move more than a million passengers per day with 23 stations, in order to move that load of passengers it has to be able to have intervals between trains of 90 seconds and with an operational capacity of 40.000 passengers per hr in any one point.

      Line one started operations in 1983, and the rest of the lines have commence operations in a erratic kind of way later on, the original line two was never build, instead they constructed as line 2 part of the original line 3 and after that constructed part of the original line 2, that is now called line 3. They are constructing a line 4, finishing the original line 2.

      So our system is just parts of a network, so they are not operating as they were plan and there is chaos in some transfer stations with loads of people they were never meant to travel that way.

      Besides that construction problem, since 1999, the system has been neglect in its maintenance and the efficiency of the operating systems is down to probably less that 50%, trains out of service, signaling problems, tracks cracks, automatic pilot problems, etc, etc, etc….

      So it means that the million passengers that are to travel in one day in line 1, have to put up with waiting periods of 4-5 minutes instead of 90 seconds between trains, so you can imaging the number of passengers waiting at any given station for a train.

      Chaos is the every day word for the Caracas Metro.


  7. Roberto N

    I rode the Caracas metro in the early days, and I would just like to thank Elio and whoever worked on it for giving us such a wonderful system.
    There was Venezuela above ground, and a different country underground. A much better, more civilized and organized country than the one above ground.
    It’s a shame that it has not continued to be so. I had always hoped that the “Metro model” would leak upwards to the rest of the country.

    Muchisimas gracias, Elio por tu trabajo. Maybe someday we can pick up where it went wrong and fix it.

  8. Alan von Altendorf

    since 1999, the system has been neglect in its maintenance

    I’m shocked, shocked I tell you, that there was neglect. Had many requests to consult in Caracas. Gave the same answer every time. Are you crazy?

Comments are closed.