ASSESSING THE PARADIGM SHIFT IN SRI LANKA S DEVELOPMENT OF THE TRANSPORT SECTOR

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1 ASSESSING THE PARADIGM SHIFT IN SRI LANKA S DEVELOPMENT OF THE TRANSPORT SECTOR AMAL S. KUMARAGE UNIVERSITY OF MORATUWA KUMARAGE@SLTNET.LK AMALK@UOM.LK 30th January 2014 Public Lecture Central Bank of Sri Lanka Colombo

2 Some definitions Emphasis: Paradigm Shift Scope: Mostly on land transport Approach: investigate each of the major elements of policy intervention

3 1. Identifying the Changing Demand Function for Transport Transport functions change with time. Changes in political ideology, trade opportunities, technology and socio-economic conditions lead to change. Period Demand Function Supply Function Pre- Colonial Self Sustaining Communities Internal trade less and infrastructure mostly provided by the respective communities. International trade routes were supported by the Kings- ports, roads. Dutch Development of Export trade Development of Canal Systems in WP, emergence of Colombo as primary international trade node for spices and coconut. Other parts of country largely ignored. British Development of plantation economy Development of tea and rubber exports supported by the rail and road radiating from Colombo. Neglect of rural access. Post- Independence Development of rural economy Rapid expansion of rural road and bus transport network. Neglect of urban and inter-urban transport. Post- Agricultural Emergence of urban economy Rapid expansion of inter-urban and urban transport infrastructure and services. Modern Emergence of leisure lifestyle Change of travel patterns, destinations, modes

4 2. Determining the Correct Role of Government in Transport Reformer Reformer Regulator Self-Regulatory Provider Private Provider

5 3. Ensuring Transport Development leads to Economic Growth Price Consumer Surplus S P o Producer Surplus D Q o Quantity

6 Price Consumer S Surplus S Producer Surplus P o P 1 D Q o Q 1 Quantity

7 Price Consumer S Surplus S Producer Surplus P o P 1 D Q o Q 1 Quantity

8 Consumer Price S Surplus S P o Producer Surplus P 1 D Q o Q 1 Quantity

9 Ancient Lanka Cities located sufficiently inland to protect against invaders Polonnaruwa Urban road networks feed the cities Road and River Networks connect cities to seaports

10 Source: P Vidanapathirana, A Systems, PhD Thesis, Unive E.g. Anuradhapura and Polonnaruwa Multiple roads centered on Capital cities Connecting multiple ports to multiple trade destinations Multi-modal transport system

11 P Vidanapathirana, Ancient Transport Systems, PhD Thesis, University of Kelaniya, 2012

12 Colonial Ceylon Canal, Railway and Road network Centered on international connectivity Strong Inter urban linkages Well developed multi modal systems Modern technology Transport in urban and suburban areas well developed. Neglect of areas which did not contribute to export trade

13 Source :Road Development Authority Post-Independent Sri Lanka Emphasis on Rural Access Develops bus transport as low cost, highly accessible mode Neglects railways, urban and interurban roads Control of private vehicles Current Paradigm Encouraging private/ para transport solutions Single mode future Developing alternate nodes Improving rural and inter-urban mobility

14 Required Outcomes Linking producers and consumers Via suitable market nodes Via suitable transport nodes Efficient transfers (terminals and logistics centres) Choice and flexibility (multi modal)

15 4.Ensuring Transport Development leads to Balanced & Sustainable Development (BSD) Efficiency in Mobility Environmental Sustainability Economic Growth Access to New Economic Opportunities Sustainable Economic Growth LI IVEABILITY Equitable Access to Social Development Sustainable Social Development

16 5. Identifying the Required Supply Function for Transport The supply of transport requires the following: Infrastructure Facilities Rolling Stock Services Delivery Processes (policies+ regulations + institutions + procedures + people) Pre- Colonial Colonial Post Independence Modern Infrastructure State State State State+ Private Rolling Stock Private State (Railway) Private (Buses, Trucks, Cars) State (Railway, Bus) Private (Cars, Trucks) State Private Processes State State State State+ Private

17 Technology Options for Transport Supply

20 Vehicle Ownership Rate (per 1000 person) Vehicle Ownership Rate Vs Per Capita Income at Different Levels of Intervention Low Moderate High USA, Australia, Canada Belgium, Denmark, Finland, France, Germany, Sweden, Switzerland, Japan, Seoul 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 Per Capita Income 1995 PPP(USD) Singapore, Hong Kong

21 Demand for Travel by Mode ( ) Passenger Kms carried by modes- Sri Lanka

22 DEMAND FOR TRAVEL BY MODE( ) Passenger Kms carried by modes- Sri Lanka

23 6. The Supply Function: Public Investment in Transport 200, , , , ,000 Ports and Aviation 100,000 80, % 2.6% Highways Public Transport 60,000 40,000 20,

24 Current Trend Vehicle taxes source road building (with a surplus) Public Transport seen as burden to treasury Future Path Translate financial profit to Treasury to economic gains to economy Cross subsidy between private and public transport Heavy investment in bus transport infrastructure New modes of urban public transport (BRT, Monorail)

25 7. Directing Private Investment in Transport Private Investment in Vehicles-Rs 400 bn+ p.a. (approximately 60% in taxes). Industry Profile Most sub sectors have an over supply and utilization is poor Mostly informal operations, inefficient with limited service parameters. Formal operators marginally improved and serves small market segments Service Delivery by Private Operators Public Transport (low fares, poor service, moderate infrastructure, but profitable-except when govtoperates) Para Transit (rapid growth, high fares, moderate service quality) Trucking Services (high rates, moderate service, poor technology)

26 8. Improving Delivery Processes in Transport Sector Why is there delivery failure? The inevitable steps to proper delivery The correct policy The correct plan The correct infrastructure and rolling stock The correct procedures The correct people

27 Conclusion Focus on rapid improvement of urban transport Focus on reforms to sector as opposed to continuing operations Integrate transport with economic growth and equitable social development Verify long term sustainability in transport policy & selection of transport modes Move on from thinking vehicles for roads which gives short term financial gains Improve service delivery by private sector. Capacity expansion not most urgent. Restore/Set up correct processes and people with correct skills and competencies in key planning and operational positions (both state and private sector)

Seminar on Importance of Transport Infrastructure for National Development Chamber of Construction Industry 26th August 2008

Amal S. Kumarage kumarage@sltnet.lk Seminar on Importance of Transport Infrastructure for National Development Chamber of Construction Industry 26th August 2008 Constraints for Development Infrastructure