Thousands of students living in Ho Chi Minh City suburbs will not have shuttle buses to access school on January 1 as operators of bus transport companies have decided to suspend services.

The operators said the city's subsidy was too low to maintain services, adding businesses had faced losses because of higher fuel prices.

During a recent meeting of the management board of Thanh Son Transport and Tourism Cooperative, which has responsibility to pick up students at 40 schools in the city's outlying districts, Pham Thi Thanh, head of the cooperative, said subsidy contracts for 2013 had not been signed, and little money was available.

Thanh was quoted by Nguoi Lao Dong (Labourer) Newspaper as saying that the subsidy rate her cooperative received from the city for 2013 was much lower than previous years. If the cooperative maintains operations, it would suffer huge losses, she said.

The meeting was held to hear the opinions of the cooperative's members to see if they should suspend operations and wait for the Centre for Public Transport Management to sign a contract for new year.

The cooperative will not receive the August and September 2013 subsidies until January.

"The subsidy is too low while the cooperative has to cover several types of fees such as tolls. Almost all cooperative members agreed to suspend operations. If the shuttle buses maintain operations, we have to charge fees from the students' parents," Thanh said.

Beside the low subsidy, the centre has issued several regulations that create difficulties for cooperative members, such as the penalty of 500,000 VND (24 USD) for buses without GPS gadgets.

Without sufficient number of buses, the cooperative will be fined 400,000 VND (19 USD), and other penalties could occur.

In early December, the Joint Venture of Thanh Long Transport Cooperative and Phuoc Dat Transport Company, which is in charge of transport students from more than 100 schools in the city, also requested that cooperative members stop operating their buses from January 1.

Tran Van Thuan, who has four 35-seat buses that transport students of Hoc Mon District's Xuan Thoi Thuong Primary School and Cu Chi District's Hoa Phu and Trung An Primary Schools, told the newspaper that all of his four buses would stop working soon.

"I will have a big loss if I keep operating my buses. In 2012, when the subsidy was higher, I received about 22 million VND (1,047 USD) monthly for each bus, and I received profits of 10 million VND (476 USD). Now that the subsidy rate has shrunk to one third, I get 7 million VND (333 USD) for each bus. Excluding fuel and other fees, I don't have enough money to pay drivers' wages," Thuan said.

Nguyen Van Tuan, owner of four buses, said he had asked buses for students at Pham Van Sang High School in Hoc Mon to suspend operation. The other buses will also stop running soon, he added.

Tuan complained that he had to spend 15 million VND (714 USD) for his two 50-seat buses, while he received only 13 million VND (619 USD) as subsidy.

In previous years, the two buses received over 40 million VND (1,904 USD) monthly.-VNA