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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » What ails our Transport Sector?

What ails our Transport Sector?

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1What ails our Transport Sector? Empty What ails our Transport Sector? Sun Apr 07, 2013 1:41 am


Global Moderator
By RMB Senanayake

Last week the Chartered Institute of Transport and Vanguard Management Services conducted a seminar on the transport sector. Professor Amal Kumarage pointed out that the average speed of travel in the City is now 25 kilometers per hour. Bus passengers travel at an even slower speed than that.

Why the traffic congestion
In 2011 the Government reduced the duty on the import of private vehicles and also issued duty free permits for politicians and public sector professionals. So the traffic congestion in the City has increased. Prof Kumarage estimated that the number of vehicles will continue to increase with economic growth. Economic growth of 6% means that the road space must also increase by about 6.7%. He said the road space will have to double to maintain the same average speed. But this means we must build more expressways for building mere by-passes or over-passes without controlling alongside development of shops creates street congestion. But can we afford to invest more on roadways? Presently we are investing Rs 250bn or 3% of GDP per year on road space. Can we build more expressways? How much investment in new roadways can the cash strapped government afford?

There is also the problem of oil consumption. Our oil bill now absorbs 30% of the import expenditure and we are running a current account deficit in the balance of payments. Where is the money to fund more investment in roadways? We will undoubtedly have to borrow from abroad. But can we spare the land space to build more highways or even secondary roads. Will our road network look then not look like a spaghetti. How sustainable therefore is our present transport policy where we encourage the import and deployment of private vehicles? Are we using the Railways economically? Presently the Railways cater to only 4% of transport users. What role can the Railway play in solving our transport problems? It could certainly carry more passengers if the bus stations and the rail stations are linked. Faster trains from the more distant towns could also be introduced if the trains are not halted in every small town on the route because of political pressure.

Road space a scarce resource
The scarce resource is road space and we should make people use the road space most economically when they utilize vehicles for transport of passengers or goods. We should give preference to the vehicle which economizes on the use of road space. When a van built to carry 8-10 passengers plies with a husband and wife the road space is not being utilized economically. Similarly when a car carries only one person it is not using the road space economically. Not only the road space, but the fuel consumption per person is also higher. To promote the use of road space economically economists would argue that there should be a price for the road space to reduce congestion. Car owners and van owners (except those plying for hire) should be charged for road use because they use too much road space per person unless they carry the full load of passengers. We must make it expensive for private vehicle owners to run half empty. Buses of course use the road space most economically since each bus carries a full load of passengers. Should we not give priority to public transport? How can buses ply with adequate speed when we give priority on the road usage to private vehicles?

Traffic congestion causes a loss to the economy by way of excessive consumption of fuel and delays in the arrival of passengers or goods at their destinations. When passengers report late to their workplaces they cause a loss to the output of the firm. If they arrive tired they will not be able to perform at their best and hence their productivity too will suffer. Such losses have been computed to be around Rs 700m per day. Road pricing is the solution offered by economists. But unless it involves costly electronic monitoring, the collection of road fees or tolls during congestion or peak hours would increase delays. But we could still permit a limited number of vehicles to use the roads where traffic congestion is particularly heavy. In Athens at one time vehicles were restricted according to their number with odd numbered and even numbered vehicles allowed to ply only on alternate days. This reduced the number of vehicles and not only reduced congestion but also led to more economic usage of road space.

There are other solutions possible. The three-wheelers are reducing the speed of vehicles. They also cause disruption to the smooth flow of traffic. If we accept the need to give priority to public transport we must set apart one lane exclusively for buses. Perhaps 3 wheelers should be banned from the main roads during the peak hours.

The City of Colombo has attracted too many economic activities of lower priority or which relatively add less economic value. Much of the congestion is caused by a few thousand vans transporting children to schools every day. Schools should be close to the areas of residence of the schoolchildren. Many of these schools are owned and run by the government. But it may be better for the government to establish branch schools of these popular schools closer to the suburbs rather than in the City. These schools could then be run down and eventually closed. The City has not been properly planned and it is necessary to do so even now and give time for the schools to shift with the government taking the lead.

There are several government departments which do not have to be in the City making use of valuable commercial land. The Government has already planned to shift the Welikade Prison - a step in the right direction. They should also move several other departments like the Department of Government Printing.
It is known that the government is subsidizing the price of diesel in order to keep the cost of living down. But there are many owners of diesel vans and diesel driven cars who benefit from this subsidy. Differential pricing is not economically desirable. It is better to allow prices to reflect the costs and subsidize the less affluent through cash grants or vouchers.

It is also necessary to charge vehicles according to the damage they do to the road. Heavy vehicles carrying cargo cause more damage than lorries. In France sometimes a higher fee is charged for vehicles with double axels. Economic use of scarce resources is best achieved by charging for the use of the resources. Subsidies distort the economic use of transport.

Finally the Government must understand the need for an integrated transport plan where the different modes of transport are assessed according to their unit costs and prices. The trucking industry has never developed and old and even unroadworthy vehicles are used to transport tea and rubber from the Estates to the City of Colombo.

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