After protests, Brazil cities try again to hike bus fares

miércoles 10 de diciembre de 2014 10:55 GYT

By Asher Levine

SAO PAULO Dec 10 (Reuters) - Brazilian cities are pressing ahead with plans to raise bus fares, despite threats of a repeat of street protests that shook President Dilma's Rousseff's government last year.

The fare hikes are seen as an important test case for Rousseff's plan to roll out several unpopular measures, including higher taxes and budget cuts, in an effort to correct imbalances plaguing Latin America's largest economy.

The last time cities tried to hike fares 7 percent to 10 percent in mid-2013, students and other activists led demonstrations that brought out more than 1 million people across Brazil. The protests sparked a sharp drop in Rousseff's popularity, and she pressured mayors to roll back the fare hikes.

The protests died down, but cities ended up paying subsidies to bus companies to prevent them from going bankrupt. Sao Paulo, Brazil's biggest city, could be on the hook for as much as 2 billion reais ($769 million) in subsidies next year, which city officials say would prevent investments elsewhere.

This time around, city officials plan to more clearly explain why a hike, estimated at about 15 percent by some analysts, is necessary. They also hope a less-charged political climate, following Rousseff's re-election in October, will help prevent a repeat of last year.

"We can spend a billion in subsidies or we could spend it on a hospital ... That's the discussion we're having," said Maria Fernanda Conti, a spokeswoman for Sao Paulo's city hall.

Other cities also plan bus fare hikes, and Rousseff's government believes the timing of the move in January, when most students are on vacation, should help prevent new protests, a senior official told Reuters.

But some protest groups, with members believed to number in the hundreds or low thousands, plan to stop the hikes again.   Continuación...