[sustran] Re: Subsidy and Tax regimes, Buses in developing countries

[Lee Schipper]

Less road congestion in Developing Countries? 

>>> Alan.Howes at cbuchanan.co.uk 6/30/2006 6:05 AM >>>
I'm doing a bit of digging on this for a current job.  See for example
this quote - 
"The Chief Minister has rejected the proposal for reducing any taxes
for
[Bus Undertaking] as if it is allowed to [Bus Undertaking] then it has
to be allowed to all the city transport undertakings in [State], which
will result in loss of revenue to the Government." 
 
In the developed world, it is generally accepted that buses and other
public transport are worthy of financial support by reduced tax
burdens,
subsidies or both (even in post-Thatcherite Britain!).  These may be
user subsidies (e.g. payments to carry older people at reduced fares),
or direct subsidies by negotiation, tender or franchise (or by blanket
subsidy to a state-owned operator), or relief from, e.g., fuel tax.
 
This logic seems much less accepted in developing countries, for a
variety of reasons that I can think of.
 
1.  Lack of funds
 
2.  Higher PT demand, thus less financial need for support
 
3.  Less acute road congestion, so less environmental need for
support.
 
4.  Resistance on the part of treasuries and/or World Bank etc. to the
idea of revenue (rather than capital) support.
 
Yet financial support for PT services would often offer better value,
economically and/or environmentally (let alone socially), than the
major
capital road projects that still seem to go ahead in many developing
countries.
 
Any comments on this?  Are there developing countries that disprove my
assumptions?  Could it sometimes be the case that funding for capital
programmes can be got from WB etc, while revenue support has to come
from domestic sources - therefore the roads get built and the buses go
unsupported?
 
Alan
 
--
Alan Howes
Associate Transport Planner
Colin Buchanan 
4 St Colme Street
Edinburgh      EH3 6AA
Scotland
email:  alan.howes at cbuchanan.co.uk <mailto:alan.howes at cbuchanan.co.uk>

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