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

[Walter Hook]

At the end of the day, there is little evidence in developing countries that
operating subsidies to bus systems lead to better service over the long run,
mainly because the lack of transparency and accountability of subsidized
enterprises.  There may be mechanisms for one-time capital subsidies for
fleet modernization, but so far these have in practice not proven to be very
successful either.  Bus rapid transit seems to offer the best way to spend
public money on bus services, with the public capital focused mainly on bus
infrastructure.  Perhaps ultimately, given the chronic shortage of equitable
and transparent mechanisms of collecting government revenue, particularly in
Africa, the better approach would be to consider imposing higher road user
fees and congestion charging on all vehicles. 



-----Original Message-----
From: sustran-discuss-bounces+whook=itdp.org at list.jca.apc.org
[mailto:sustran-discuss-bounces+whook=itdp.org at list.jca.apc.org] On Behalf
Of Alan Howes
Sent: Friday, June 30, 2006 8:57 AM
To: Asia and the Pacific sustainable transport
Subject: [sustran] Re: Subsidy and Tax regimes, Buses in developing
countries

See #3? 


--
Alan Howes
Associate Transport Planner
Colin Buchanan 
4 St Colme Street
Edinburgh      EH3 6AA
Scotland
email:  alan.howes at cbuchanan.co.uk
tel:      (0)131 226 4693 (switchboard)
           (0)7952 464335  (mobile)
fax:     (0)131 220 0232
www: http:/www.cbuchanan.co.uk/


-----Original Message-----
From:
sustran-discuss-bounces+alan.howes=cbuchanan.co.uk at list.jca.apc.org
[mailto:sustran-discuss-bounces+alan.howes=cbuchanan.co.uk at list.jca.apc.
org] On Behalf Of Lee Schipper
Sent: 30 June 2006 13:34
To: Alan Howes; Asia and the Pacific sustainable transport
Subject: [sustran] Re: Subsidy and Tax regimes, Buses in developing
countries

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>

tel:      (0)131 226 4693 (switchboard)
           (0)7952 464335  (mobile)
fax:     (0)131 220 0232
www: http:/www.cbuchanan.co.uk/

 

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================================================================
SUSTRAN-DISCUSS is a forum devoted to discussion of people-centred,
equitable and sustainable transport with a focus on developing countries
(the 'Global South'). Because of the history of the list, the main focus
is on urban transport policy in Asia.


================================================================
SUSTRAN-DISCUSS is a forum devoted to discussion of people-centred,
equitable and sustainable transport with a focus on developing countries
(the 'Global South'). Because of the history of the list, the main focus is
on urban transport policy in Asia.