CONTRIBUTED BY:DR.NASIR JAVED
A few days ago, there has been a yet another announcement for brining in thousands of buses on the Karachi roads. In the last five years or so, we have seen at least half a dozen public statements, by the provincial ministers and at times by the federal government. In fact, as way back as 2012 perhaps, the Federal PSDP had an allocation of around 8bn for brining in 8000 CNG buses for Karachi, which never arrived. In each case, the Government allocates funds for the purchase of buses, and operations in the public sector. In a few instances, the project did not take off, as the price negotiations failed, for reasons not difficult to guess.
Now, the issue is how to solve this riddle. In my opinion, the Government should not ‘purchase’ buses, rather should leave this to the private sector. One thing that always baffles me is the direct role of ‘operator’ that the Government assumes, and starts running services. Whereas in almost all trading services, where consumers are supposed to pay, the operations should be left to the private sector and the government should regulate the service and may subsidize, if needed.
In case of public transport, if the private sector can provide thousands and thousands of trucks and trailers for transport of goods across the country and even beyond, freely available to the citizens, why is it impossible for it to invest in public transport? The reason is that government tries to regulate the routes and fairs and this leads to chaos, as we see in Karachi. The issue is one of public policy.
The Solution: The Government should strengthen the department of public transport, with the right kind of professionals, data and IT tools. The department should carry out a comprehensive survey of potential bus routes in the city. With the use of mobile apps and social media, it should not take more than a couple of weeks to come up with a reasonable good quality of data that can help us map the routes. Just for clarity, in most of the cities of this kind, there are usually hundreds of routes and thousands of buses. For example, Shenzhen in China has around 19 Metro Light Rail lines, and around 20,000 buses on 1100 routes. The thumb rule is to have one bus for every 2000 of population. By this formula Karachi needs around 8-10,000 buses.
Once the routes are mapped and numbered, the private sector be invited to run the buses on these, after conducting auction of the routes. Every route would have different financial feasibility, depending upon the area and passenger load. The government should fix the fare for all routes, on a per km formula. Since the objective is to provide high quality AC buses across the city, and to keep the fare affordable, there would obviously be need for a subsidy. The basis of auction of the routes would be the amount and level of subsidy asked for each route. The operator asking for the least subsidy gets the route. This of course would be subject to some feasibility study and a benchmark figure.
The department should have a Video wall and IT based monitoring system of every bus movement, using commercially available trackers. This shall ensure that the operator runs the buses as per schedule and covers the full route. Mobile Apps and technology be used for public facilitation and information.
As a rough estimate, operating an AC bus within city costs around 150PKR /KM and an average bus covers around 200km / day. Now assuming that we start with 2000 single Deck AC buses in Karachi, the per day running cost is Rs 30,000/ bus. This includes all operational expenditure, and cost of capital and return on equity and operator s profit etc. This makes almost Rs 10m / bus per year, assuming a slightly reduced operation on holidays. A total of 2000 buses would cost us 20bn rupees per year, providing high quality affordable transport to millions of passengers. Now assuming that the fare can recover at least half of it, the government needs a subsidy of just around Rs 10 bn / year; actual to be decided on the basis of auction. Is this too much for 2000 AC buses?
As a policy, we should encourage the local manufacturers to upgrade their facilities and provide us with high quality buses, comparable to imported ones. This would further boost our industry and employment. If can imagine the public benefit of these 2000 buses in Karachi, which later on can be increased to 8,000 in over say a period of five years, so that we can significantly reduce the traffic load and pollution. And all investment would be private, with of course loans from the banks, which should discourage car loans and prefer public transport.
What we need is right kind of public policies and private sector investments and operations, and empower the Government to act as regulators and not operators.
ABOUT THE AUTHOR:
Dr. Nasir Javed
Head of Public Sector Consulting | ACS Consulting | An ACS SYNERGY Company
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