7 - 13 March 2002
Issue No.576
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Al-Ahram Weekly Online 7 - 13 March 2002 Issue No.576 |
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Insuring against catastrophe
The recent train tragedy is only the latest in a spate of railway accidents that have prompted the government to reconsider a life insurance scheme for railway passengers. Gihan Shahine considers the current dilemma
Atef Mohamed Mahmoud, 42, lies helplessly in Kasr El-Aini hospital after suffering severe injuries to his head, neck and lower limbs. He is among the few survivors who jumped to safety in the 20 February railway disaster, Egypt's worst, which left at least 373 dead and 64 with severe injuries. Mahmoud, a workman who lives on an average daily wage of LE7, was not covered by social insurance. On top of this, he has "six mouths to feed" but his family currently has no source of income except "donations by the kind-hearted."
"We live from hand to mouth," Mahmoud moaned in a faint voice. "My wife doesn't work and my children are still too young to work. My brothers have big families to support. But God never forgets His creatures and, judging from the donations we receive every day, there are still good people around."
Mahmoud is not the only one without social insurance -- a matter which has energised the government into activating a previous plan to provide life insurance for railway passengers. In a statement made before parliament on Saturday, Prime Minister Atef Ebeid affirmed that President Hosni Mubarak had ordered a draft law to be presented for parliamentary discussion before the end of this month that would provide compulsory life insurance for railway passengers. On Sunday, Minister of Planning Osman Mohamed Osman met with insurance company representatives to discuss the plan.
The victims of the latest railway disaster belong to the poorest societal strata in Upper Egypt, Egypt's most deprived region. They are mostly labourers with no social insurance. The Ministry of Social Affairs and Insurance (MOSAI) paid LE3,000 for burial services for each fatality and LE1,000 in compensation for each injured individual.
"That represents only symbolic financial support and was delivered on the spot," explains Layla Abdel-Razek of the MOSAI. "Still, we will conduct a social study on all those who were afflicted by the latest railway tragedy to see how we can help out. We may, for instance, provide funds to help those with partial disability start an income- generating project or provide vocational training for unemployed members of those families whose main breadwinner was killed or disabled."
But how will the likes of Mahmoud survive until the preliminary studies are completed? Although donations will certainly keep them going for the time being, tragedies are quickly forgotten and the afflicted families may be left to suffer alone. Will the government then be able to provide assistance single-handedly?
Abdel-Razek insists that the law already provides insurance to those working in the informal sector. They must, however, apply for the service, paying a monthly instalment of LE1 which secures them a monthly pension of LE70 after they turn 60, the formal retirement age. "In case of accident, we pay the pension to the family who lost their breadwinner to death or permanent disability," Abdel-Razek says.
Most of those injured in the railway accident, however, told Al-Ahram Weekly that they never applied for the insurance programme. "I just did not expect this day to ever come when they would pay me compensation in case of injury or disability," said 46-year-old Abu Taleb Ahmed, another survivor of the railway accident who is currently suffering from burns and other injuries. And how much, after all, would LE70 monthly help?
The official answer, of course, is stereotypical: "The government has limited resources," Abdel-Razeq contends. "Can you imagine that we pay a total of LE600 million for that social security programme? The government cannot do everything on its own."
Which brings us back to square one: a life insurance plan is urgently needed, not only to cover railway passengers but also to take account of those in the metro and public venues, such as cinemas, malls and stadiums.
History, however, seems to be repeating itself. The same suggestion was prompted in 1998 in the aftermath of the horrific Kafr Al-Dawwar railway accident, which killed at least 47 and left 104 injured. Again, such a proposal was floated in 1999 when two trains collided in one of the Egypt's worst railway tragedies.
Enthusiasm, however, soon gave way to resignation and the plan remained stalled due to disagreements erupting between insurance companies and the Railway Authority.
"Officials at the authority were never enthusiastic about the plan," complained Fathi Youssef, head of the Egyptian Federation for Insurance and Delta Insurance Company. "They were not cooperative and it took them months to provide basic information -- mainly figures on the average number of passengers, accidents and losses -- which were necessary for us in drafting the programme."
Ultimately, when the programme was designed, the authority objected to certain details in the draft. But it still boiled down to a conflict of interests -- insurance companies looking to make a profit were displeased when the Railway Authority refused to increase ticket fares and objected to a system of paying in instalments.
"The conflict was unfounded. What we suggested was only a meagre increase in the price of tickets that would not exceed 15 to 20 piastres," Youssef said. "The increase would be insignificant compared to the amount of losses. A disaster like the one we have just had would have cost us no less than LE25 to 30 million."
According to the plan, compensation, amounting to a negotiable LE20,000- 40,000, will be paid to the families of each railway fatality or those who have been completely disabled. Those injured in railway accidents will also receive compensation depending on the level of their injury. Tickets will be increased by only ten piastres, something which was decided in the latest meeting with the minister of planning.
The growing consensus is that, had the plan been applied in time, the aftermath of the disaster could have been better managed.
"The government is always bankrupt and there is no guarantee that donations will be honestly managed in reaching targeted families," said insurance expert Nabil El- Aqqad. "Insurance is the safest way to deal with such disasters. But the Railway Authority did not want to pay because people are considered of no value in this country,"
In August 2000, however, a similar spate of highway accidents prompted the Ministry of Transport to increase road tolls by 75 piastres in order to provide financing for a life insurance scheme covering Egypt's 44,000 kilometres of highways. Insurance companies were not included in the programme, however, once more due to financial disagreements with the ministry. The toll increase was meant to bring in an estimated LE9 million annually to the Transport Ministry. According to the insurance plan, compensation amounting to LE20,000 would be paid to the families of each road fatality. Those injured in highway accidents would be treated at government expense in hospitals affiliated to the Ministry of Health.
In the 1970s, life insurance programmes were imposed upon public transport -- metros, trams and public buses -- following an incident in which a trolley-bus sank into the Nile in Giza. Insurance had been imposed on private vehicles -- personal cars and taxis -- since 1963.
However, those who have survived the latest train accident are starting to become aware of the importance of insurance. "We are ready to pay any increase on the ticket fare, just anything, if that would secure our families and improve train services," groans one survivor.
But will insuring railway passengers ever mean improving the railway services?
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