[sustran] Re: Sustran-discuss Digest, Vol 74, Issue 5

[Brendan Finn]

Dear Hassan, 

I am in agreement with the general direction of Simon's e-mail. The Government of the Punjab is being unrealistic if it expects to get anything resembling a quality public transport system without subsidy or support funding. I guess if they give an exclusive franchise to a company without any restrictions on coverage, service level, quality or tariff, it could be possible, but that would not meet the needs of the citizens. There is a common misconception among some politicians and senior decision-takers that if you privatise bus services you don't need to give any subsidies because the private sector is always profitable. Alas, this does not hold true. 

There are two categories of urban public transport system that do not require subsidies:

1) A few rare exceptions such as Hong Kong and Singapore which do not receive Government money, but Government has created the conditions for them to be profitable. 

2) Most cities in Africa and many in other parts of the world where unregulated buses and paratransit provide services with low quality vehicles and poor conditions for the workers. The quality of the service itself varies but I don't think you will find in any of these cities that either the citizens or the city authorities are pleased with what they have even if it is functional. 

In my opinion, a city such as Lahore needs to set outs its goals first and assess the value of achieving them. What sort of city does it want to be? How important is transportation to that vision and how should its people move? Will the city's economy function if traffic continues as it is? Only then decide how to achieve it. 

A good public transport system which has reasonable coverage and service levels will cost money (actually, even a bad one costs money). The questions for the Government are:

a) What role does Government believe it should have in network coverage, service design, vehicle specification, quality, etc.? Once it starts to get involved, it must take some responsibility for the financial outcomes.

b) What can it do to minimise the cost and maximise transportation effectiveness? Well-enforced priority for buses is an obvious method which boosts productivity, reduces unit costs, and makes the service attractive to users.

c) What should be the balance of paying the costs between the customers and the government? Is Government willing to allow price freedom to the operators, or does it wish to provide tariff protection for some or all users? If the latter, then it had better be prepared to contribute something. 

But ultimately it boils down to figuring what a good PT system is worth to the city, and what the alternatives cost. The alternatives can be expensive freeway-construction, or cheap do-nothing in which the city's resources are squandered in congestion and investments go to other better-functioning cities and countries. When they know what they want and what it's worth, it's a lot easier for them to figure how much they would be willing to pay, and will recognise a good bargain if they can get it for less. 

With best wishes, 


Brendan.
_______________________________________________________________________________________________________________
Brendan Finn          e-mail : etts at indigo.ie          tel : +353.87.2530286
----- Original Message ----- 
From: "Simon Bishop" <simon.bishop at dimts.in>
To: <sustran-discuss at list.jca.apc.org>
Sent: Friday, October 09, 2009 6:23 AM
Subject: [sustran] Re: Sustran-discuss Digest, Vol 74, Issue 5


> Dear Hassan,
> 
> I do not underestimate the size of the task you are embarking upon and I wish you all the luck.  I was thinking about your question in some depth and it made me think that your task might be even harder than you think.  
> 
> In my experience it nearly always requires additional finance to have a 'quality' public transport network.  In Delhi I have been working as a consultant with Delhi Transit which has pushed the government to replace the existing bifurcated system of a state monopoly that runs quite inefficiently and requires regular top ups to be kept alive.  The other is a fully private 'Blueline' system that breaks even but, to do so requires cheap uncomfortable truck body buses running at high speed to capture as many passengers as possible.  
> 
> Delhi Transit borrowed heavily from the London model to develop a system of 17 zonal clusters in the city which would be franchised to the lowest cost bidder.  The bidder would collect a per km fee for each km run but in contrast to the state monopoly his/her performance would be measured by GPS and an Operational Control Centre with a system of rewards and penalties.  The fact was that this turned out to require government support, but it was much less than the 650 million pounds or so that is charged in London (back of the envelope figure = about 150 million pounds or 3 flyovers a year - the government are constructing 24 of these in the run up to the Commonwealth Games and already they are becoming saturated).  
> 
> The government has stalled on taking on the commitment so far because it says the charge is too much.  However, I would argue strongly, and suggest that you too strongly consider looking at and arguing for a performance-based bus system even if a subsidy is required.  
> 
> The first reason is that you will need quality performance to compete with private vehicles and you will need to pay for it.  Think of ways of raising the money like a cess on fuel or cross subsidization from parking charges, even like Bogota, support from carbon credits.  Taxing cars and motorbikes, I acknowledge, is difficult politically without a viable public transport system available, but, if a plan were constructed and in, say Year 2 a bus system was in place, it would be possible to commit to raising money from private vehicles in that year to pay back someone like the ADB or WB. 
> 
> The second reason is that the bus network will reduce costs elsewhere, which, as part of your project you should independently quantify (accidents, congestion, pollution, technology transfer, etc).  Even if you think that the government will say, "All very well, but....." you should think about 'playing the long game'.  There is fast approaching a time when even the elite will be beleaguered by long traffic jams and will start to realize that having a good bus system actually helps them drive around more easily in their government cars - in India they're Ambassadors, don't know what they are in Pakistan.  The elite will eventually come to realize a subsidy is a small price to pay for their comfort.
> 
> You could also mitigate some of the costs in the following ways.  I notice in India the preponderance of cycle rickshaws that are totally un-integrated in the public transit system.  At virtually zero cost you could use them as 'feeder routes' to BRT, thereby reducing the costs of running a bus-based service considerably and possibly employing more people.  You could 'upgrade' rickshaws in your contract specification so they are accessible, comfortable and desirable.  Another way to reduce costs would be to develop what we are trying to develop in Delhi, a BRT system that reduces ongoing costs by improving the efficiency of buses spending less time in traffic for instance and increasing revenues from a fast, competitive service.  
> 
> In the end I think we need to start asking the question, 'How much do we want to pay for a quality public transport system rather than 'How can we get it for free'?  'How can we mitigate some of these costs by taking advantage of the strengths already existing in Asian cities, para-transit, cheaper labor (non-existent in the Western world)?' Most importantly, 'How do we COMMUNICATE these needs to our politicians so they sanction the funds?'  You could start by looking at places like London that have turned round their loss of bus patronage and improved journey times by adopting quality performance models.
> 
> All the best,
> 
> Simon Bishop
> 
> 
> ----------------------------------------------------------------------
> 
> Message: 1
> Date: Thu, 8 Oct 2009 13:14:22 +0600
> From: Hassaan Ghazali <hghazali at gmail.com>
> Subject: [sustran] Lahore Transport Company Revisited
> To: cai-asia at lists.worldbank.org, sustran-discuss at list.jca.apc.org
> Message-ID:
> <c4ee40d0910080014m3f4517b7odcccd8d2f8cb655a at mail.gmail.com>
> Content-Type: text/plain; charset=ISO-8859-1
> 
> Friends,
> 
> With all due apologies for cross postings, I seek your assistance in a task which has been assigned by the Honourable Chief Minister of the Punjab to sort out some of the matters regarding the LTC which was formed earlier this year.
> 
> We are reviewing the Motor Vehicles Ordinance, 1965 and amending them to enable a sustainable financial and regulatory framework for the public transport sector.
> 
> At this point I have two specific questions which are as follows:
> 
> (1) Is there any public transport system in existence which does not rely on government subsidies or viability gap funding?
> 
> (2) If not, are there any examples or case studies of how financing has been arranged and how this has been reflected in the tendering process for procurement of buses?
> 
> Many thanks in advance.
> 
> Hassaan
> 
> Institutional Development Specialist
> The Urban Unit
> Planning & Development Department,
> Government of the Punjab
> 
> A: 4-B Lytton Road, Lahore, Pakistan
> T: 9213579-84 (Ext.116)
> F: 9213585
> M: 0345 455 6016
> Skype: halgazel
> http://www.urbanunit.gov.pk