[sustran] Re: Skytrain

Karl Fjellstrom karl at dnet.net.id
Thu May 29 13:28:51 JST 2003


Eric,

Thanks for your v interesting info on the US metro lines and I'm happy
to provide a few more details on Bangkok. I'd welcome any corrections or
additional info.

The city & national government together have spent around US$145 million
per km on a 20km, 19-station "Blue Line" subway which will open in
Bangkok in April 2004. It will intersect with the 23km Skytrain network
at 3 places but will not be fare integrated. The Blue Line is one of the
ways the government is supporting the Skytrain, as clearly it will
significantly enlarge the Skytrain's catchment. Even the Skytrain, which
goes through prime areas of Bangkok, has difficulty getting ridership to
cover operating costs and it's still operating at around 40% of the
projected ridership for 1999. So it's difficult to see how the Blue
Line, which has a much less juicy catchment, will cover costs. The
government btw has paid the $2.7 billion infrastructure price tag for
the Blue Line. The concessionaire is expected to pay for the system
operation & rolling stock.

[To put it in perspective, TransMilenio BRT in Bogota cost the govt
around $5 mill per km (with no operational subsidy) and carries nearly
double (currently at 770,000 passengers per day and rising) the number
of passengers per day that the Skytrain and Blue Line together will
carry in 2004. TransMilenio is the same length as the two Bangkok rail
systems combined.]

Another, more direct way the government is supporting the Skytrain is by
paying for infrastructure extensions to the Skytrain network; 2km to
open next year and a further 17.2km approved. The program of rail metro
expansion in Bangkok has received a big boost in May 2003 with a new
Master Plan calling for a 100km network by 2010. Other options such as
Bus Rapid Transit were not seriously considered.

The original owner of the Skytrain,  Tanayong, is otherwise occupied (in
Bankruptcy Court proceedings), and meanwhile one of the Skytrain
operating company's major objectives appears to be to try to get the
government to pay for more infrastructure extensions to its network. One
way this is done is by exaggerating the benefits of the Skytrain. I'm
sure there are others ...

Regards, Karl



-----Original Message-----
From: owner-sustran-discuss at jca.ax.apc.org
[mailto:owner-sustran-discuss at jca.ax.apc.org] On Behalf Of Eric Bruun
Sent: Tuesday, 27 May 2003 12:25 AM
To: sustran-discuss at jca.ax.apc.org
Cc: del Mistro
Subject: [sustran] Re: Skytrain



Karl

1) Actually, many of us are vitally interested in how the finances of
the SkyTrain are doing. It is an extremely important issue, since
privately financed proposals are being presented around the world. I too
would appreciate some information.

2) You are right about the lack of transparency in decision making in
the US (and Canada). There are some decisions begin made which are
clearly to the benefit of special interests and disregard more urgent
investments with better return-on-investment to the public at large. For
example, the Blue Line extention of the Washington, DC Metro cost $400
Million for only a couple of miles and seems to be largely for the
benefit of the professional sports stadium owners. Meanwhile, a short
light-rail line for the same cost would close the U of the Red Line and
address far more significant needs. Same in Pittsburgh. There is a $300
Million tunnel under a river which goes to the pro sports stadiums and
then stops. If one is going to spend the money on a tunnel, then the
incremental benefit to cost ratio is very high to extend it further into
other communities.

Eric Bruun
----- Original Message -----
From: "Craig Townsend" <townsend at central.murdoch.edu.au>
To: <sustran-discuss at jca.ax.apc.org>
Sent: Monday, May 26, 2003 3:56 AM
Subject: [sustran] Re: FW: Land Value Taxation Event 23/04/03


> Karl,
>
> I haven't kept up with the recent details concerning the extensions to

> the
BTS
> and other issues regarding government support to Bangkok's rail 
> systems
under
> construction. From your comments, it sounds like the Government of
Thailand is
> now providing financial support to the BTSC: an operating subsidy or 
> help
with
> debt servicing?. Could you or anyone else provide me with some details
(e.g.
> cost, financing, government agencies involved)? It would probably be 
> best
if
> you reply to me personally (townsend at central.murdoch.edu.au), rather 
> than through Sustran, and would be much appreciated. Thanks.
>
> Craig
>
> Quoting Karl Fjellstrom <karl at dnet.net.id>:
>
> > Thanks for the updates & interesting information on the US.
> >
> > The 'lack of transparency' I was referring to is about mass transit 
> > options. Transparency may be much greater in the US but even there, 
> > when policy-makers (or was it a referendum) approve spending $180 
> > million per km on a metro rail system in Washington, are they really

> > exploring all available options in a transparent manner?
> >
> > Lack of transparency often means a lack of information about how 
> > public money is being used. A good example is the comment below that

> > 'government institutions are not really involved' in the Bangkok 
> > Skytrain. If only ... In fact, the government is paying for the 
> > infrastructure for Skytrain extensions; 2km to open next year and a 
> > further 17.2km approved. It's probably only through the ongoing 
> > intimate involvement of the government that the system is still 
> > operating, as it has never covered its operating expenses plus 
> > interest costs.
> >
> > Even if there were perfect transparency, however, it's true that the

> > interests of powerful landowners - as described below - would 
> > probably keep something like value capture off the political agenda 
> > anyway, at least in Bangkok.
> >
> > Regards, Karl Fjellstrom
> >
> >
> >
> >
> >
> > -----Original Message-----
> > From: owner-sustran-discuss at jca.ax.apc.org
> > [mailto:owner-sustran-discuss at jca.ax.apc.org] On Behalf Of Craig 
> > Townsend
> > Sent: Sunday, 25 May 2003 4:23 AM
> > To: sustran-discuss at jca.ax.apc.org
> > Subject: [sustran] Re: FW: Land Value Taxation Event 23/04/03
> >
> >
> > Eric makes good points about the US. Similarly, in Canadian cities 
> > the level of transparency surrounding mass public transport projects

> > (usually
> > rail) is
> > very high. Costs of public transport projects and operations are the

> > subject of a high level of public scrutiny and debate. There is a 
> > big debate going on
> > now in Vancouver about a proposed rail line, and due to extensive
news
> > coverage anyone who reads the newspaper has a good understanding of
the
> > costs
> > involved and the various debates surrounding the project: e.g. see
> > today's
> > Vancouver Sun newspaper http://www.canada.com/vancouver/story.asp?
> > id=30BD1DF4-E7CC-42BD-AA5C-D3D310ACF9E0). The level of transparency
> > surrounding road projects is typically much lower.
> >
> > One point that I would like to make about value capture is that it 
> > is worth clarifying who is capturing value. A form of indirect value

> > capture by government (and hence in theory all sectors of society) 
> > from transport infrastructure improvements does occur in Australia 
> > because the improvements
> > raise the market value of adjacent lands. Those increases are
reflected
> > in the
> > level of property assessment and will result in more tax revenue to
the
> > government. The situation is different in Bangkok where there are
only
> > small
> > administrative charges on land owners, but no taxation based on
assessed
> >
> > market value. The Bangkok Transit System is a privately owned and 
> > operated rail rapid transit system. The owners of the system make 
> > deals with other
> > corporations, businesspeople, and landowners to mutually increase
their
> > revenue, but government institutions are not really involved.
> >
> > Craig Townsend
> >
> > Quoting Eric Bruun <ericbruun at earthlink.net>:
> >
> > >
> > > I want to point out that in some places, public transport agencies

> > > are specfically not allowed to use land value capture. It would 
> > > take changes in laws first.
> > >
> > > Secondly, the lack of transparency about costs for public 
> > > transport projects is certainly not true in the US. The Federal 
> > > government requires all kinds of documentation about local/state 
> > > contributions and about future operating cost supports for public 
> > > transport projects
> >
> > > before it contributes. This is then used by the highway lobby to 
> > > point
> >
> > > out how expensive public transport is. But the truth is that there

> > > is no matching requirement for highway projects, especially not 
> > > about the
> >
> > > operating and maintenance costs. This is good for the highway 
> > > lobby, because much of the operating support comes from property 
> > > taxes and general taxation, not from user taxes.
> > >
> > > Eric Bruun
> > >
> > > ----- Original Message -----
> > > From: "Karl Fjellstrom" <karl at dnet.net.id>
> > > To: <sustran-discuss at jca.ax.apc.org>
> > > Sent: Friday, May 23, 2003 5:05 AM
> > > Subject: [sustran] Re: FW: Land Value Taxation Event 23/04/03
> > >
> > >
> > > > Dear Paul & Craig, sorry for the delayed response.
> > > >
> > > > Bogota implemented a value capture scheme along the TransMilenio
> > > > (www.transmilenio.gov.co) lines which was apparently (according 
> > > > to the Mayor of the time) successful in recouping some of the 
> > > > windfall gains which accrued to land ownwers along the 
> > > > TransMilenio route. This value capture is an important part of 
> > > > the funding arrangement for the ongoing expansion of the system.
> > > >
> > > > The COO of Bangkok's Skytrain system in March gave a 
> > > > presentation to the Thai-German Chamber of Commerce where he 
> > > > outlined major increases in property values in proximity to the 
> > > > Skytrain stations; especially for commercial premises like 
> > > > shopping malls. Responding to a question, he said however that 
> > > > there was no plan for any kind of tax/charge to capture the 
> > > > windfall gains to the owners of these premises, but that they to

> > > > some extent capture these gains by imposing charges for the 
> > > > commercial premises to establish walkway connections to the 
> > > > Skytrain stations.
> > > >
> > > > Similarly in Brisbane, when it is proposed to the transit 
> > > > officials express strong interest in some form of value capture 
> > > > to fund system
> >
> > > > expansion, though nothing like that has been implemented there. 
> > > > What's the catch? Here's my conspiracy theory: there is often an

> > > > incredible dearth of transparency and open debate surrounding 
> > > > all issues of mass transit system cost, especially when it comes

> > > > to rail
> >
> > > > metros. It's only when there is no financial black hole to hide,

> > > > such as in Bogota's bus rapid transit system, that you might see

> > > > these options openly canvassed. (Political commitment helps too,

> > > > of
> > > > course...)
> > > >
> > > > Regards
> > > > Karl Fjellstrom
> >
> >
> >
>
>




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