Seminar on Importance of Transport Infrastructure for National Development Chamber of Construction Industry 26th August 2008
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1 Amal S. Kumarage Seminar on Importance of Transport Infrastructure for National Development Chamber of Construction Industry 26th August 2008
2 Constraints for Development
3 Infrastructure Investment & Economic Implications Public Investment Cost of Infrastructure (approx 3% of GDP) Highways Railways Private Costs Fuel Imports Vehicle s & Spares Rs 75 bn Rs 20 bn Rs 300 bn (approx 10% of GDP) Rs 100 bn Losses due to Infrastructure Inadequacy Congestion (VoC/VoT) Rs 40 bn Accidents Rs 15 bn Losses due to Management Inefficiency SLTB Rs 6 bn SLR Rs 4 bn Private Buses Rs 8-10 bn Three Wheeler Rs bn Supply Chain Rs xx bn????
4 Is it inadequate infrastructure? Country Nepal Pakistan Bangladesh Bhutan Maldives India Sri Lanka Road Density km per sq km per 1000 km population Rail Density km per sq km per 1000 km population PS/ In addition Sri Lanka also has the highest ratio of buses per capita in the region
5 Is it lack of ability to maintain the large transport system? Is it the lack of modernization? Can this be done without Sectoral Policies Sectoral Plans Institutional Caapcities..?.
6 Functions carried out by Agencies in Transport Sector Policy Planning Regulation Service Providers Sea Private/ SLSC/SLPA Air M/Ports & Aviation urrence with l provinces currence with e province CAA Motor Vehicles (all) RMV Private Private/ Sri Lankan/SLAA Railways SLR Inland Waterways Provincial Road Passenger Transport Services NTC/PRPTA Private/SLTB (bus, taxis etc) Carriage of Goods by Motor Private Vehicles (lorries) Non-Motorized (walking, bicyle) Local Govt/ Private Traffic Management Police RDA/PRDA/LGA M/ Transport Central in concu Province for all OR Province in Conc Central for one
7 Policy To date Implicit policy which comes from continuing funding of government programs are: School Children are provided subsidized bus travel (1960s) State Employees are provided subsidized rail travel by Govt through their employers (1970s) Subsidy is provided to bus operators on unremunerative rural areas (1990s) Private Bus Transport is not subsidized (1980s) Operating losses of the rail and bus transport as well as most capital investments are met by the Treasury (1960s) Vehicle imports, especially four wheeled passenger vehicles are heavily taxed (1970s) For Hire vehicles and goods transport are not regulated (1980s) Diesel is taxed at prices lower than petrol and is sometimes sold below cost (1960s) Regulation for road passenger transport and goods transport services is devolved to the Provinces (1989) Liberalize vehicle imports (1978)
8 Desired Features of New Policy Interventions The essence of policy to be movement of people and goods (as opposed to modes or organizations or infrastructure alone) The government will take pro-active steps to identify the potential market for transport services to meet existing and potential demand for movement (e.g. Premium Coach Services, quality of rural roads) The modes of transport would be prioritized according to the land use limitations, environmental and energy concerns as well as cost and affordability. As such there would be a priority for public transport (as opposed to private transport) in urban and suburban areas (in road user pricing, ERP and parking) Resource utilization as inputs for transport taking into account especially fuel, energy, road space and investment on vehicles (in infrastructure design) Reducing the harmful by products of transport activity such as all forms of environmental pollution, injury and death Transport services would be considered as requiring regulation in order to obtain the best performance of resources (as opposed to unregulated sectors)
9 Features of Policy Policies to include all existing modes of transport (add vehicles for hire, waterway transport, goods vehicles) It should also provide for new modes of /infrastructure for transport (LRT, BRT, Expressways, Pedestrianized Streets) Ownership & Investment of Road Transport Services ( define role of SLTB, individuals or companies fro private buses) Benchmark personnel qualifications (set standards for human resource inputs) Pricing & Regulation (regulated, revision procedures, make recommendations on tolls and taxation of vehicles and fuel) Safety & Security (set standards for vehicles, operators, crew, terminals and other accessories)
10 Features of Policy Develop Existing Infrastructure for Optimal Use (traffic management, bicycle lanes) Quality of Services & Products (set standards) Issues of Sustainability-Environment, Energy, Society etc (set standards on emissions, cap on energy use and advice for policy inputs) Public Consultation (set standards for public awareness, information, consultation and hearings) Technology Inputs (set standards and promote the innovation of new products which add value e.g. VLS, Bus Terminals, ATCS) Issues of Social Equity (set criterion of minimum level of access, pricing, subsidies, facilities for non-motorised transport) Customer Satisfaction (set procedures for surveys, complaints etc)
11 Desired Features of Transport Sector Planning Multi-modal planning New modes of transport Fuel Consumption Plan (e.g. to hold consumption levels) National Integration Institutional Arrangements & Coordination Regional Transport Linkages (e.g. SAARC identify as a function of NTC) Develop road safety, railways, water transport and security plans Supports research and development in transport Repository of Data
12 Features of Regulation Reform Orientation Procedure of Procurement Financial Independence Quantity Scheduling of Services Introduce & Monitor Quality of Services
13 Problems to be addressed in Bus Sector SLTB Role of SLTB not defined SLTB not regulated Primary objectives not clear Problem of Large Number of Individual private operators Unhealthy Competition on the route Bus Crew cannot be developed or controlled High degree of inefficiency, wastage and corruption Time tables cannot be implemented Economic Mechanisms not included Market mechanism do not operate No Freedom to enter/leave Services cannot be easily terminated No mechanism for qualitative development Survival Based Operations (end up as an employment provision) Operators form strong lobby for own ends but cannot implement improvements Unauthorized elements cannot be removed especially from bus terminals
14 Regulation and Industry Status ( ) Result Poor Reinvestment Low Fares Quality Improves then Declines Low Labour Productivity Environment 1979 Mixed State & Private Operators Poor Regulation Environment 1907 Unregulated Regulation based on increasing Revenue Result Owner Operators Standards Decline High Investment Oversupply Collusive Behaviour High Load Factors Result High investment Owner Operators Intense Competition Low Fares Environment 1958 Nationalized Monopoly Single State Operator Result Exploitation of Workers Poor Service Quality by Failing Companies Others make High Profits Environment 1938 Route Licensing Territorial Monopolies Fare Control Bus Companies
15
16 Thank You
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