[sustran] Re: FW: Land Value Taxation Event 23/04/03

[Craig Townsend]

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
> 
> 
>