Report No. 1 6269-CE Sri Lanka Transport Sector Strategy Study (In Two Volumes) Volume 11 Background Papers March 1 997 Infrastructure Operations Division South Asia Country Department I Government of the Democratic Socialist Republic of Sri Lanka with assistance from the UNDP FOR OFFICIAL USE ONLY Document of the World Bank, This docurment has a restrictedt disitibution and maiy le uisedl by recipients only inr thie performance of ttheir ofticial duties. tLIs contents may not otherswise be disclosed wilhout World Bank authorization SRI LANKA FOR OFFICIAL USE ONLY TRANSPORT SECTOR STRATEGY Table of Contents VOLUME I BACKGROUND PAPERS AND PRESENTATIONS Table of Contents I. ROLE OF THE GOVERNMENT 1. Vision of the Transport Sector as an Effective and Efficient Public-Private Partnership Athulathmudali, S. 2. The Changing Role of Government in Ports and Shipping Bennett, M. and J.E. Ricklefs 3. Changing Public Roles in Road and Passenger Transport: An Overview and the Example of Highways G6mez-Ibainez, J.A 4. OECF's Assistance Strategy for Privatization and Introduction of Private Sector Participation in Infrastructure Including the Transport Sector Hashimoto, K 5. Decentralization and the Public Investment Program in Sri Lanka: Some Aspects of Budgetary and Planning Processes Jegarasingham, K 6. Public Infrastructure: Private Investment Opportunities Nanayakkara, M 7. Decision-Making in Project Procurement Norman, A. IT. SUSTAINABLE PROVISION OF TRANSPORT INFRASTRUCTURE AND SERVICES 8. Opportunities for Employment Generation in the Transport Sector Chandarasena, S. 9. UNDP Goals of Sustainable Development and Transport Sector Strategy Conroy, R 10. Complexities in the Relationships Between Railway Costing, Railway Marketing, Joint Development, Externalities, and Transit Integration Diandas, J. 11. Economic, Social, and Environmental Demands on Transport: Past Performance and Emerging Challenges Dheerasinghe, K.G.D.D. and D.S. Jayaweera 12. The National Highway Program for Economic and Social Development Fowzi, * 13. Traffic Management for Congestion Control and Safety Kumar, A., with contributions from R. Parker 14. Urban Structure Planning and Transport Kumar, A.with contributions from W. Mendis and S. Wickremasinghe Vice President: Ms. Mieko Nishimizu Acting Director: Mr. Fakhruddin Ahmed Division Chief: Ms. Marie Robinson Task Manager: Ms. Frannie Humplick This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 15. Implementation of Clean Air 2000 Action Plan Kumar, A. with contributions from R. Perera and S. Pilapitiya 16. Access and Mobility in Rural Areas Perera, L. 17. Regional Integration and National Highways Senanayake, D. III. OPPORTUNITIES FOR COMPETITION IN TRANSPORT 18. Bus Industry Issues and Options G6mez-Ibainez, J.A. 19. Study of Transportation Services Provided by School and Office Vans Lye, *. 20. Methods of Managing Routes Served by Multiple Operators Premaratne, M.C. 21. Development of a Local Road Construction Contracting Industry Norman, A. 22. Towards a Better Image of Road Construction Contractors Munasinghe, E.I. IV. MAKING PUBLIC SECTOR MANAGEMENT MORE MARKET SENSITIVE 23. OECF's Recommendation for Restructuring Road Agencies in Sri Lanka Abe, H. 24. OECF's Assistance Strategy for Private Sector Participation in the Port Sector Kusaka, H. 25. Efficient Utilization and Development of the Sri Lanka Rail Network McCullough, G.J. 26. Strategic Issues in Development of Sri Lankan Ports Mobarek, I. 27. What to do About Peoplized Companies? Premaratne, M.C. 28. Reforming the Railway Weerasooriya, G.P.S. V. PRICING AND FINANCING IN TRANSPORT 29. Competitiveness of Charges in Sri Lanka Ports Abeywickrema, R.J. 30. Subsidy Allocation in Road Transport and Operation of Bus Services on Unremunerative Routes Diandas, J. and M.J. Sahabandu 31. Road User Charges and Their Purposes G6mez-Ibantez, J.A. 32. Are Current User Charges in Roads Adequate? Jayaweera, D.S. 33. Operation of Non-Economic Routes by RaiL Weerasooriya, G.P.S, and U.E., Storm PART I. ROLE OF THE GOVERNMENT 1. Vision of the Transport Sector as an Effective and Efficient Public- Private Partnership Hon. Athulathmudali, S.1 The importance of transport in promoting the economy of the country cannot be over-emphasized. Its role has been recognized by all concerned. As the Minister of Transport I am very much concerned about evolving a realistic transport policy. As such this Workshop is most welcome and could not have been better timed. I thank the World Bank, the UNDP and our own professionals in the field of transportation for their assistance and participation. Transport had received special attention in Sri Lanka even in Colonial times. At the time we received independence nearly half a century ago, we inherited from the British an effective network of roads and a railway system. Since the middle of the last century the British rulers had recognized the importance of roads for administrative, military and commercial purposes. With a booming coffee plantation industry to be followed by the even more prosperous tea industry, roads from the plantation areas in the "up country" to the Colombo port became an absolute necessity. With transport costs by road using bullock carts going up and the realization that no increase in the means of transport then in use could keep pace with the increase in production, planters were prompted to consider the feasibility of a railway between Kandy and Colombo. When Brazil, even then a major coffee producer, developed its own railways to transport the product, thereby reducing the price of Brazilian coffee, the British Government pursued assiduously its plans to build a railway here to keep costs down to meet the threatened competition from Brazilian coffee. It was Governor Ward in 1855 who considered the establishment of a railway "an absolute and imperative necessity". The construction of the railway began in 1858. I have delved into a little bit of history purposely to show that administrators of a bygone era had a clear vision of which we at the present time happen to be the beneficiaries. Making use of the road network available early entrepreneurs took the initiative to start a bus transport industry. The first bus service on record was in 1907, when a passenger cum goods service was operated between Colombo and Chilaw. The industry seems to have expanded over a period of ten years to that level, that in 1916, Government sought to intervene by enacting the Vehicles Ordinance act of 1916. These early years saw more than a flurry of activity among individual bus owners which developed into unbridled and intense competition with many attendant unsavory features. This naturally called for greater Government intervention in 1942 which compelled these individuals to group themselves into Companies, with territories of operation being allocated to them on 1 Minister of Transport, Environment, and Women's Affairs 2 the basis of route monopolies. This experiment too was a failure as the Companies could not put in the required number of buses. The service was provided through aging buses inefficiently managed. In 1951 Government made an attempt to compel the formation of public companies. But this too was a failure for the same reasons. The discontent of the traveling public was expressed through newspapers and on some political platforms. With the coming into office of a new Government in 1956 with distinct socialist leanings under the leadership of the late Hon. S.W.R.D. Bandaranaike MP, the days of the private sector were numbered. In 1958 the new Government nationalized the bus services bringing them under the Central Transport Board (CTB). It is of interest to note that it was during the same period that a wave of nationalization swept through Britain as well, under the Labour Government. The setting up of the CTB with the monopoly of road bus transport vested in it was a landmark event in the transport history of this country. Discipline, efficiency and professionalism became hallmarks of the new monolith. By 1978, however, within a period of two decades signs of deterioration were becoming quite patent. Financial difficulties due to fares not keeping pace with escalating costs and overstaffing were among the host of problems that plagued the CTB at this time. This was reflected in a drop in efficiency and the consequent inability to satisfy the expectations of the traveling public. In 1977 with the coming into office of a new Government with a mandate to "open up" and "liberalize" the economy, the private sector was allowed to come back, initially to complement the CTB services. Very soon the private operators, most of them "single bus owners", were there in a big way offering severe competition to the CTB, making serious inroads into its market share. In 1989 the same Government decided to peoplize the CTB and set up 93 Peoplized Bus Companies by peoplizing 93 depots, with workers owning 50% shares and the Government owning the balance. These Companies are a halfway house between privatization and nationalization and are legally recognized as Public Companies under the Company Law. The same problems that plagued the CTB such as inadequate finances, have visited these companies. Today they have become financially unviable, struggling to survive while venturing to serve the community. Subsidies, though inadequate to cover up in full the operational costs and new buses provided with bank financing on a Government guarantee, have propped up these companies. The recently announced fare increase will no doubt be a welcome, much-needed shot-in-the-arm for them. There is competition today within the private sector itself as well as competition between the private sector and the Peoplized Bus Companies. This unbridled competition is neither in the interests of the industry nor that of the public. 3 This sequence of changes will show that in Sri Lanka too the bus industry has gone through the vicissitudes of "classical cycle" of private and public involvement in the industry, as elsewhere in the world. The story of the railway is that of a valuable asset that has been run down over the years. Lack of adequate capital has led to the poor maintenance of track, locomotives and rolling stock. Poor maintenance has in turn led to a drop in the efficiency of the services. As a result the transport of bulk freight, the very purpose for which the railway was constructed, is no more a major revenue earner for the railway. Road transport seems to have won over a significant share of the freight business which at one time was the monopoly of the railway. Where passenger traffic is concerned too the picture is no better. While struggling to overcome the legacies of the past the railway has lost a good share of its passenger traffic to road transport, though when taking into account the congestion on the highways the desirable trend should have been the other way about. With this somewhat dismal backdrop what should be our aspirations and what should be our vision. We are about to see the dawn of a new century. The aspirations of our people are not that grandiose. What they need is a transport system which a low income earning country could afford to speed up socio-economic development. It should cater to those who cannot afford the luxury of private transport. The community expects a service with minimum waiting time, particularly at peak periods, to enable them to be at their places of work and schools in time. In short it should be a service that is regular, reliable and safe, affordable to all regular passengers and with a rational fares policy. Effective cost recovery measures, with subsidies or public service obligations schemes in place will make the services viable. In a developing country like ours the social service character of public transport should be upper most in our thinking when planning for the future. Thus the responsibility of providing public transport cannot be left exposed solely to the vagaries of market forces resulting in undue inequalities and distortion in fares structures. At the same time it will be too much of a strain on the Government if the Treasury were to absorb all the commitments of a State sponsored transport system where the State would be subsidizing inefficiency in the industry. To my mind therefore, public road transport is an area of economic activity deserving an effective merging of private and public resources. If the private and public sectors are to play a meaningful role sufficient safeguards have to be made available to the private sector to make bus transport an industry worth investing in. In Sri Lanka, to achieve this I see two major steps that should be taken. The first is to phase out the "single bus owner" system that now operates. A system where only companies or cooperatives would qualify for route licenses should be evolved, with provision being made for the present single bus owners to join such companies or cooperative. I am happy to state that this policy has already been approved by Government and that legislation is now being drafted to implement it. Government has 4 also realized the need to restructure the Peoplized Bus Companies. Legislation is now under way to set up 11 new companies more or less on a regional basis with professional managers to run them. It is my expectation that they would not only give an improved service, but would also be viable financially and not be a burden on the Government. The second is a rational policy on fares. Fares are a very sensitive area, where for political and social reasons the tendency would be to keep them down as far as possible regardless of economic consequences. Such an unrealistic approach would slowly but surely bring about the ruin of the industry. I am happy to announce that on recommendations made by me to Government, after a competent committee had studied their implementation, Government has recently taken a decision to make a modest raise in railway fares by 20% and bus fares by 15%. This increase has come after nearly five years and should give confidence to those in the industry that Government is committed to a realistic fares policy. I would even go further and recommend the setting up of an independent "Fares Forum" which would make recommendations to Government on fares having considered representations from the industry as well as from the users of transport. this would avoid the need for "ad hoc" decisions on fares or a situation where no decisions to be taken at the correct time. A policy on Public Service Obligations is also to be commended as it would take care of Government's obligations to satisfy community demands, on non-remunerative routes on which operators, be they state or private would be normally reluctant to provide services. With the public and private sectors operation services, an important area that would be worth watching is as to how they compete with each other and even among themselves. "Healthy competition" would of course be the ideal. But we are yet to see an area of economic activity where this ideal has been achieved. If however both groups are given equal opportunities to compete we would with the benign guidance or monitoring by a central agency avoid the extremes of monopoly and ruthless competition, of the type which we see today. When it comes to the railway, which since its inception has been a Government concern, one may not straight-away see a ready made private sector, public sector partnership. But the possibilities are always there and they should be explored. In the area of intermodal transportation, links between road transport and railway is an area rich with possibilities for such partnership. For instance with the proposed development of the Port of Galle, I see for the railway a major role in transporting containers between Colombo Port and the Dry Port. When it comes to passenger transport, feeder bus services to suburban community services should be rewarding field for exploitation. The freight transport sector is yet another area where I would expect a lot of possibilities for private sector/public sector collaboration. The railway was established originally to carry commercial commodities. It maintained its monopoly in freight till the 1940s when it had to face severe competition from road haulers. The time has come to 5 recapture this lost area by new methods of collaboration with the clients. The railway has still an edge over road transport in the freight of bulk commodities such as flour, petroleum limestone, cement and fertilizer. As the railway is just now short of locomotives to be totally dedicated to freight transport, it would be worthwhile to negotiate with these prospective customers as to whether they would participate in a partnership to provide the much needed locomotives, rolling stock and even track rehabilitation. The railway controls real estate above and beyond that required for its railway operation. These would be eminently suitable for development with collaboration of the private sector. There are also areas such as central railway stations that would lend themselves for development as shopping malls, etc., while continuing to serve railway purposes. Private sector participation is required for these developments. Building up a workable partnership between the public and private sectors both in road transport and railways should be the answer for the future. It would perhaps add a new spoke or dimension to the "classical cycle" of public and private sector involvement in the industry. Such a partnership would fall in line with Government's policy to maintain an open, challenging, competitive environment within a liberal economy, free of unnecessary Government intervention and controls and conducive to restoring market incentives. In conclusion I would like to refer to the series of studies that had been done on transport in Sri Lanka in recent years. Several conferences, seminars and workshops have also been held at different levels on this subject. We, thus, have a wealth of information on the subject. What seems to be lacking, however, is a clear cut program of action to translate into reality the findings and recommendations made from time to time. I would like to draw your attention to this lacuna and express the hope that with the conclusion of the ongoing National Transport Strategy and the Colombo Urban Transport Study a coherent and workable plan of action would emerge. 6 2. The Changing Role of Government in Ports and Shipping Bennett, M. and J.E., Ricklefs2 2.1. INTRODUCTION Since the pioneer Asian privatization at Port Klang, Malaysia, in 1986 private sector investment in infrastructure has become widely accepted (at least in principle) throughout the continent. Now, ten years on, the question is much less whether to "privatize" in some way and much more "how to" implement the concept . The first question dealt with such macro issues as philosophies of governance and socio-political considerations. The second involves the details, sometimes at a micro case- by case basis. Socio-political factors persist, but they are now joined by the hard world of commercial reality. To address either question is to grapple with defining the role of government within a particular environment at the outset of the twenty-first century. By framing the issue as location and time specific one realizes that there is no single universal answer available off-the-shelf Solutions must be shaped in a local context. Nevertheless, there is now sufficient experience, both worldwide and within Asia, from which one can draw useful lessons. This paper addresses a few of the broad lessons regarding infrastructure and government. I then turns to transport infrastructure with particular emphasis on ports. 2.2. ROLE OF INFRASTRUCTURE In defining what should be the ongoing role of government, it is necessary first to identify what is the role of infrastructure. It is an economic world and economists would argue that provision and operation of physical infrastructure is not a primary activity, that is, it is not an end in itself Instead it represents service: service to domestic industry (e.g., communication, power generation and transmission); service to domestic and international trade (e.g., roads, airports and seaports); and service to the population in improving the quality of life (e.g., all of the above as well as education, health care, water and sanitation, etc.). A number of actions are needed to arrive at the appropriate role of government in the ports sector. These include: 1 Define Objectives of Government in Ports Sector 2 Define Guidelines for Ongoing Government Involvement as Conservator/Regulator (how to fill statutory role for safety, enviromnent, etc.) 2Frederic R. Harris 7 * as Landlord (how to fill trusteeship role; including tendering and evaluating investment opportunities and ongoing performance monitoring) * as Operator (how to fill this role if it is an objective) * as Investor/Equity Shareholder (how to fill this role if it is an overall objective or required for a specific project) * as Facilitator (how to fill this role for, e.g., land acquisition, permitting, utilities) * as Partner in Transport (how to fill this role in providing or assisting in provision of supporting transport, e.g., road rail) * as Guarantor? (if desired) 3 Define Guidelines for Private Sector * as Investors * as Operators 4 Define and Establish Structure of Government's Ongoing Ports Body 2.3. ROLE OF GOVERNMENT The importance of its society-wide role is one of the primary reasons that governments historically adopted the practice of "public works" to provide necessary infrastructure. The other reason, of course, is that the high capital investments required and the low or slow revenue potential often inhibited private entrepreneurial interest. It remains the role of government to promote society-wide benefits including economic advancement. Now, however, governments across Asia are soliciting the private sector to enter the infrastructure field, either in pursuit of improved service efficiencies or because of financial limitations or both. Infrastructure is not longer solely within the purview of government. At the same time it would be both irresponsible and unrealistic to thing that infrastructure can be turned over totally to the private sector. The challenge is to design procedures and, where necessary, institutions which protect the public interest while also satisfying the private investors' need for fair and reasonable returns on investment. This situation need not be characterized by natural antagonism but rather by creative tension. One of the lessons which can be identified is that successful infrastructure privatization arises from an effective public/private partnership, at least in attitude if no in fact. It is the responsibility of government, which is the party seeking the investor, to take the initiative in creating this essential partnership. 8 2.4. STRUCTURING A PUBLIC/PRIVATE PARTNERSHIIP IN PORTS There are four key actions the in order to structure an efficient public/private partnership in ports: 1. Define the Roles of Ports Within Government's Economic Development Planning 2. Define the Ongoing Role of Government in Ports (regulator? investor? equity shareholder? operator?) 3. Define Requisite Protection for Port Users (policy considerations which must be built into program) 4. Define Requisite Protection for Investor/Operator (commercial considerations) 9 3. Changing Public Roles in Road and Passenger Transport: An Overview and the Example of Highways G6mez-Ibanfez, J.A.3 My assigned to! J- for this 15 minute talk is incredibly ambitious: to survey the changing role of the publicsector in road and passenger transportation, drawing on international experience. To do so I will first provide a brief overview of the types of public involvement and the broad trends in both industrialized and developing countries. Then I will use one particular type of transportation -- high performace highways, also called expressways -- to illustrate in more detail the motives, possibilities, and limitation of increased private involvement. I choose expressways as an example in part because in a later session of this workshop I have been asked to discuss the case of local bus services in detail. Types of Public Involvement Briefly, there are three main forms of public sector involvement of roads and passenger transportation, as illustrated in Table 1: * First, the public sector may subsidize transportation services or facilities, so that the users of those services and facilities do no pay the full costs of providing them. * Second, public agencies or enterprises may directly provide or operate transportation services or infrastructure. Examples are public bus companies and roads built and maintained by public highway authorities. * Finally, the public sector my regulate the behavior of private firms or individuals providing transprotation services. Such regulations can focus on several different aspects of their behavior: competition, safety or pollution. An Overview of the Variation and Trends Table 2 presents an impressionistic overview of the variation in levels and trends in public sector involvement in road and passenger transport in both industrialized and developing countries. Briefly, most forms of public involvement are declining, the principal exceptions being safety and environmental regulation. Subsidies, for example, are generally declining but still substantial for some types of transportation services or facilities. The levels of subsidy for use of highway infrastructure vary enormously among and within countries, although there is much controversy and confusion about how such subsidies shoudl be measured. Generally, highway use is subsidized less in those countries, such as many in Europe, that tax motor 3 Kennedy School of Govermnent, Harvard University 10 vehicle fuels heavily or rely on toll financing for expressways. Thsi is true even if the environmental effects of highway use are included with the infrastructure costs. Even in the countries that tax fuels heavily, however, certain types of users often do not pay their full costs, most notably heavy trucks and motorists on congested and costly urban highways. The general trend has been to increase hgihway taxes and tolls, however, and thus to reduce subsidies. Aside from infrastructure and environmental costs, trucking and long distance bus service are rarely directly suidized. Local bus service, by contrast, is heavily subsidized in industrialized countries and more modestly subsidized in those developing countries which have public bus companies, although in both cases the levels of subsidy appear to be declining slightly. The degreee for which public enterprises are used to provde transportation also has been declining, although public enterprises still dominate several important types of services or facilities. Public highway agencies are responsible for providing local roads everywhere and most high performance roads in the industrialized countries. They typically contract with private firms for major construction and resurfacing, however. Moreover, almost all expressways in developing countries are now built and operated by private concessionaires. Finally, public regulation of competition is generally declining, but public regulation of safety and environmental damages is genrally increasing. The reasons for these trends are not hard to fathom. Public subsidies and public enterprises have been declining in large part because governments in both industiralized and developing countries face increasing claims on their limited tax revenues. Making transportation users pay their way is attractive because it saves scarce public resources to be used to finance needed social services, such as health care, education, and support for the very poor. Public enterprises are in decline because they are often higher cost than private providers, and thus more likely to require subsidy. The increase in environmental and safety regulation has two sources. First, as awareness and incomes rise, so to does the public's demand for safety and environmental protection. Second, the costs of complying with environmental and safety regulations are borne primarily by private firms and individuals, and thus more stringent standards usually have little impact on the public sector's budget. Circumstances Favoring Private Involvement: The Case of High Performance Highways Increased private involvement is not always a good idea, however. An interesting case in point is high performance highways. The motivations for granting private concessions to build and operate expressways shown in Table 3 are probably universal: 11 * The first, and by far the most important, is the desire to access private capital markets to finance needed new infrastructure investments, usually because of constraints on the borrowing capacity of the public sector. * The second is the hope that a private firm might build and operate the expressway more efficiently. Yet private concessions for new expressways are far more common and successful in some parts of the world than others. In particular: * Private concessions are most common in the higher income developing countries where auto ownership has been growing rapidly for a number of years. Mexico has constructed over 4000 kilometers of private tole expressways since 1989, for example, although not without problems. Argentina and Malaysia have substantial systems of private expressways open or under construction, and many other countries of Latin America and Southeast Asia have smaller networks, mainly around or in the largest metropolitan areas such as Jakarta or Bangkok. In fact, among these countries virtually every expressway under construction is a private concession. * By contrast, private concessions make up a fairly small proportion of the expressway systems in industrialized countries. France and Spain have approximately 700 and 1000 kilometers, respectively, although these date back to the 1960s and 1970s and most new construction is by public expressway authorities. The United States and Britain have less than 100 kilometers of private expressways or bridges open or under construction. * Finally, private expressways--or expressways of any type--are comparatively rare in lower income developing countries, particularly where auto ownership is still less than 50 to 100 vehicles per 1000 population. The reasons for this are reasonably simple. There are four circumstances that favor private concessions for any type of infrastructure--be it roads, ports, electric generating plants, or telecommunications systems. These cicumstances, listed on the bottom of Table 3, vary among the types of infrastructure and the specific local market and political environment in which a facilty is to be built. Briefly, they are: * that the facility operates in a reasonably competitive market or environment, * that it be profitable from user charges alone, * that there are few environmental or other siting controversies that might delay or add costs to the project, * and that any cost savings expected froim the project be realized from real efficience gins rather than transfers of costs from one party to another. 12 Given the time available, I will discuss only the first two.4 It will also be helpful to introduce another type of transportation facility--container ports or terminals--to contrast with expressways. Virtually all studies of privatization agree that it is easier if the private firm or facility operates in a competitive environment. This is so for three reasons, listed in Table 4: * First, competition is the pricipal incentive for the efficiency gains that are usually hoped for from privat provision. * Second, a competitive environment insures that most or all of the efficiency gains will be passed on to the facility user rather than retained as profit by the enterprise. This is important because it makes private provision politically more acceptable. * Finally, competition reduces the need for public authorities to regulate the profits or tariffs charged by the private firm. If the private firm has a monopoly, then regulation of tariffs or profits is usually necessary to protect the public. Although it is beyond the scope of this presentation, designing a regulatory scheme that is fair to both the customer and the firm is no easy task. Expressways actually fare rather poorly by this test. While there can be competition in the awarding of an expressway concession, competition is usually limited during the life of the concession. This is so because if the expressway is to be financed primarily by tolls--as most private expressways are--then the competition from parallel roads must not be too great; otherwise not motorist would pay the toll. Thus critical tasks in privatization are to insure that there is effective competition during the concession award and, equally important and more difficult, to design a concession contract that will serve to protect both the public's and the firm's legitimate interests throughout the 10 or 20 year life of the concession. Container ports or terminals, by contrast are much more competitive. Not only is there usuallly fierce competition between ports, but it is also possible to stimulate competition between individual terminals in the same port, as long as they are privatized separately. Thus all the complications of tariff or profit regulation can usually be avoided. The second condition favoring privatization is that the facility can recover its costs from user charges alone. Where the facility is financially self-supporting, the concessionaire does not need to search for additional sources of revenue, such as government assistance or profits from ancillary real estate developments. Dependence on public aid greatly complicates the negotiation of the concession agreement, since the govenrnment will want to add conditions to protect its interest and investment. Similarly, 4For a more complete discussions, see Jose A. Gomez-Ibanez and John R Meyer, Going Private: The International Experience with Transport Privatization (Washington, DC: Brookings Institution, 1993) 13 ancillary real estate developments are often highly speculative, and thus compound the risk and complexity of the project from the concessionaire's point of view. A comparison of toll expressways and container ports can be seen in Table 5. The possibility that an expressway can be financed from toll revenues alone depends, of course, on its traffic potential and its construction costs. In countries or metropolitan areas where motor vehicle ownership is still relatively low or where parallel roads have fairly high capacity and are not heavily congested, the traffic and toll revenue potential may be modest. This is the essential reason for the differences in the numbers of private expressways in various parts of the world. In the high income developing countries, vehicle ownership has reached the point where the conventional roads are becoming extremely congested, and thus the potential for tolling is high. The industrialized countries have high rates fo auto ownership but usually they have already built extensive expressway systems, so the number of unbuilt links that might be financially self supporting is small. In most low income developing countries, vehicle ownership has not reached the point where expressways could be financially viable. Within a metropolitan area or country, moreover, expressway projects tend to be of two types, development road or congestion relievers, and each carries its own type of risk. A development road extends the highway system into an area hat is thought to be ripe for development. While its construction costs are often low, its traffic potential is also uncertain; if development is slower than expected, the financial results can be disastrous. A congestion or bottleneck relieving highway or bridge may have high traffic potential, but usually the construction costs are much higher as well semply because the area is developed or because difficult terrain or a river crossing had limited the expansion of the conventional highway system in the past. Container terminals, by contrast, generally have much higher potential for financial self-sufficiency. This is not always the case--a port may have limited demand or excess capacity. But container traffic is growing rapidly world wide, and at congested ports the profitability of new investments is probably high. Conclusions In sum, although the public sector's role in roads and passenger transportation is generally declining it is not in certain areas, such as safety or environmental regulation. Even areas which are often touted as important opportunities to substitute private for public involvement, such as the provision of new infrastructure, it is often important to examine each case on its own merits. 14 TABLE 1:TYPES OF PUBLIC INVOLVEMENT (1) PUBLIC SUBSIDIES (2) PUBLIC OPERATOR (3) PUBLIC REGULATION OF PRIVATE FIRMS * COMPETITION (E.G., FARES OR ENTRY) * SAFETY * ENVIRONMENTAL POLLUTION 15 TABLE 2 VARIATION AND TRENDS LEVEL OF INVOLVEMENT TREND Industrialize Developing d Countries Countries Ind. Dev. PUBLIC SUBSIDIES * HWY INFRA. Varies Varies -4 * OTHER OPERATING TRUCKING None None -- -- LONG DIST. BUS None None -- -- LOCAL BUS =50% =30% IF 0 PUBLIC =0% IF PRIVATE PUBLIC PROVIDER * LOCAL ROAD ALL ALL 0 0 * EXPWAYS MOST FEW 4 4 - TRUCKING NONE NONE * LOCAL BUS ALL MIXED PUBLIC REG. • COMPETITION TRUCKING LOW LOW 4 4 LONG DIST. BUS LOW HIGH 4, 4 LOCAL BUS -- HIGH -- 0 * SAFETY HIGH MEDIUM t 1' * ENVIRONMENTAL HIGH MEDIUM 1 1' 16 TABLE 3: MOTIVATIONS FOR PRIVATE INFRASTRUCTURE (1) ACCESS TO NEW CAPITAL MARKETS (2) GREATER EFFICIENCY PREVALENCE OF PRIVATE TOLL EXPRESSWAYS COMMON: HIGH-INCOME DEVELOPING COUNTRIES RELATIVELY RARE: INDUSTRIALIZED COUNTRIES VIRTUALLY UNKNOWN: LOW-INCOME DEVELOPING COUNTRIES CONDITIONS FAVORING PRIVATE INFRASTRUCTURE (1) COMPETITIVE MARKET (2) PROFITABLE FROM USER CHARGES ALONE (3) FEW ENVIRONMENTAL OR SITING CONTROVERSIES (4) SAVINGS FROM REAL EFFICIENCY GAINS, NOT SIMPLY COST TRANSFER 17 TABLE 4: COMPETITION IMPORTANCE (1) ENCOURAGES EFFICIENCY GAINS (2) INSURES SAVINGS PASSED ON TO CUSTOMERS (3) REDUCES NEED FOR REGULATION PREVALENCE TOLL EXPRESSWAYS: COMPETITION WHEN GRANTING CONCESSION, BUT NOT AFTER PORTS: COMPETITION BOTH DURING AND AFTER 18 TABLE 5: PROFITABLE FROM USER CHARGES ALONE TOLL EXPRESSWAYS: HIGHLY VARIABLE TRAFFIC VARIES * AUTO OWNERSHIP LEVELS * COMPETING ROADS * LOCAL LAND USE CONSTRUCTION COSTS VARY * URBAN, SUBURBAN, RURAL CONTAINER PORTS: OFTEN 19 4. OECF's Assistance Strategy for Privatization and Introduction of Private Sector Participation in Infrastructure Including the Transport Sector Hashimoto, K5, 1. Japan's Support to Private Sector Initiatives in Infrastructure Development The Government of Japan (GOJ) recognizing the importance of the private sector initiatives in infrastructure development, declared its policy to support such initiatives by utilizing Japan's Official Development Assistance (ODA) including OECF assistance and other public and/or private facilities. The way in which this policy is implemented is described in the section entitled "Possible Support to Private Sector Initiatives in Infrastructure Development". The main components of the said policy are: (1) GOJ will enhance its policy dialogue with LDCs on issues related to the promotion of infrastructure development funded by the private sector. (2) GOJ will extend ODA loans (OECF loans) to projects implemented by the government (or public sector) of LDCs, which are directly or indirectly related to private sector projects, including basic infrastructure development and environmental protection projects. (3) GOJ will utilize its technical cooperation schemes (JICA assistance) for project formulation, institutional building and training for project operation and maintenance. (4) GOJ will consider the prompt and flexible use of other OECF functions (i.e., private sector investment finance scheme) for appropriate infrastructure projects. (5) GOJ will actively utilize other public and/or private facilities including the Export-Import Bank loans, trade insurance, and private infrastructure funds. OECF, as an implementing agency of GOJ' s ODA program, will actively support such an initiative if the relevant project is "realistic" and "feasible" under the given environment of each country and the policies adopted by the host government are considered "sound". 5OECF 20 2. Issues Concerning the Private Sector Participation in Infrastructure in Sri Lanka Sri Lanka has promoted privatization of state-owned enterprises in the manufacturing, construction, agriculture, transportation, financial and service sectors since the second half of the 1980s, reaching its peak with the decision in April 1995 on full privatization of plantations and privatization and private sector initiative in the infrastructure sector. The Sri Lanka economy achieved a real GDP growth rate of 5.4% as mentioned above, but infrastructure deficiencies have restricted further development of the Sri Lanka economy. However, in the tendency toward public investment reduction caused by fiscal deficit, investment to improve infrastructure, which has been made by the public sector, has reached its limit, and traditionally poor performance of the public enterprises poses concerns over the implementing capability of the public sector in infrastructure development. With these problems, infrastructure development projects in Sri Lanka seem not to have progressed well enough. In order to promote infrastructure development while coping with the above problems, GOSL came out with a policy to encourage participation of the private sector in the infrastructure development, and the Secretariat of Infrastructure Development and Investment (SIDI) was established in 1992 as an organ to promote private investment. Since the establishment of SIDI, private sector infrastructure development such as BOO/BOT has not yet been realized, but the current administration formed in November 1994 puts more stress on promotion of private sector participation in infrastructure development. Based on that policy, Sri Lanka has taken various measures such as organizational reinforcement of SIDI and the Board of Investment (BOI), establishment of incentive schemes including tax exemptions to promote private participation under BOI, securing the transparency of the private sector infrastructure development process according to the BOO/BOT guidelines (now being prepared) and advancement of reform of public enterprises and privatization by Public Enterprise Reform Commission (PERC), which indicates the commitment of the current administration to private sector infrastructure development. The World Bank is now planning the Private Sector Infrastructure Development Project to further support private investment in infrastructure by establishing the Private Sector Infrastructure Development Fund (PSIDF) for funding private infrastructure projects in cooperation with private investors. OECF recognizes the importance of the purpose of the World Bank's projects for private infrastructure development but emphasizes that the public sector needs to be assisted instead of giving up its responsibilities (for example, the World Bank has suspended its assistance to CEB). OECF will consider its support for the Private Sector Infrastructure Development on condition that the following four requirements are met: 21 The government should: (1) define an appropriate role for the public sector and accept the accompanying responsibilities (2) develop an adequate institutional framework for promoting private sector infrastructure development (3) make substantial efforts to reform related public sector institution (4) implement sound infrastructure development plans with due attention paid to the public nature of infrastructure services In relation to the above four conditions, attention should be paid to see if the current administration willingly takes the government's "responsibility" to obtain consensus of the Sri Lanka people on rationalization of the tariff structures for public utilities such as electricity, telephone, water, railway fare, bus fare, etc. and if relevant public enterprises can be reformed while keeping morale high. Furthermore, OECF pays special attention to see if the GOSL is ready to give more autonomies to the public enterprises with regard to decisions on tariff setting, investment, procurement and personnel recruitment, which would be the prerequisite for creation of healthy competitive environment in the infrastructure sector. 3. Possible Support to Private Sector Initiatives in Infrastructure Development 3.1 The Need for Public-Private Partnership for Infrastructure Development (1) According to the World Bank, investment requirements for infrastructure development in developing economies in East Asia and the Pacific region are projected at between $1.3 - $1.5 trillion for the period 1995-2004. however, it would be very difficult for the developing countries to depend solely on their domestic resources or public funds extended by donor countries to cover such massive investment needs. (2) Against this background, developing countries are now seeking the possibilities of utilizing private funds and know-how to fill the financial gap needed to improve economic infrastructure in an efficient manner. (3) Infrastructure investments in developing countries, on the other hand, are likely to expose the private sector to various types of risks, some of which cannot be overcome solely by the efforts of the private sector. As a result, there have been a relatively limited number of success stories in this area. (4) Under these circumstances, GOJ recognizes the needs to take supplementary measures to facilitate private sector initiatives in infrastructure development in order to help developing countries achieve sustainable development. 22 3.2 Japan's Support to Private Sector Initiatives in Infrastructure Development The following outlines the measures the Japanese government intends to take to support private sector initiatives in developing countries: The government will have policy dialogue and consultation with host countries, where appropriate, on issues related to the promotion of infrastructure development funded by the private sector such as specific development program or legal framework of host countries. (a) extending ODA loans - extending ODA loans to projects implemented by the government (or public sector) of the host country, which are directly or indirectly related to private sector projects, including basic infrastructure development and environmental protection projects; - considering providing such ODA loans in a timely manner; (b) utilizing technical cooperation schemes - utilizing development studies schemes and technical cooperation schemes for studies necessary for project formulation; - utilizing technical assistance for: - institutional capacity building in the host country, e.g., for the development of related laws and regulations; - training of experts for project operation and maintenance; (c) considering the prompt and flexible use of other OECF functions (i.e., private sector investment finance scheme for appropriate infrastructure projects within the existing framework 3.3 Implementing Policy Measures. In implementing the above-mentioned policy measures, the Government of Japan will take into full consideration the following aspects: 23 (1) Supplementary Support Infrastructure projects initiated by the private sector should be implemented, in the first place, by the host country and private sector concerned. Bearing in mind the role of the govermnent which is to facilitate such initiatives through supplementary measures, GOJ will support development projects only when it is likely to greatly contribute to the socio-economic development of the host country but cannot be undertaken solely by the private sector due to the high risks involved, and only when the host country and/or private sector concerned request GOJ to do so. (2) International Partnership GOJ would like to welcome the participation of private entities of any nationality and the collaboration with other members of donor community, including the international financing institutions and foreign development organizations. (3) ODA loans to be extended as a part of such supplementary measures will be provided, in principle, under general untied procurement conditions in order to avoid any misunderstanding that said policy measures aim at promotion of Japan's export. 24 5. Decentralization and the Public Investment Program in Sri Lanka: Some Aspects of Budgetary and Planning Processes Jegarasingham, K6. Introduction 1.01 The topic "Decentralization and the Public Expenditure Program" contains two concepts which need some explanation as to their precise meanings in this analysis. The concepts are "decentralization" and "public expenditure program". The concept of decentralization is of recent origin though one could observe isolated instances of decentralization in the past. Similarly, public expenditure as a program is a new phenomenon. 1.02 Decentralization means "allocation of selected functions and finance to the periphery, region, district, town or village" (Suriyakumaran, 1994). The allocation of functions are limited to law and order, maintenance services and administration functions which are allocated at the discretion of the Central Government. Decentralization has been in vogue since the 1970s with varying degrees of success. The attempts at decentralization in the Sri Lankan context has been a political endeavor. This process took a step forward in the late 1980s with the passage of the Thirteenth Amendment to the Constitution, and the formation of the Provincial Councils. The Provincial Council System ushered in new political institutions and structures resulting in the powers of the Centre being devolved substantially to the provinces and again from the provinces to the grassroots level organizations. This was a radical departure from the past system of exercising powers and the concomitant activities such as collection of revenue and incurring expenditure. 1.03 To take up the other concept, Public Expenditure Program, it simply means that the expenditure incurred by the Government for the benefit of the people at large through the maintenance of law and order, delivery of services such as health and education, provision of infrastructure facilities such as roads, railways, posts and ports, and the distribution of essential food items at affordable prices. Undoubtedly, without incurring expenditure, especially in a developing country like Sri Lanka, no government could ensure the economic and social well-being of the people. There is also another dimension to the public expenditure program in our context. It also means public investment, and in this respect, public expenditure program and the Public Investment Program are deemed to be the same in this analysis. 6 Transport Infrastructure Division, National Planning Department, Sri Lanka 25 The Budgetary Process 2.01 The Constitution of Sri Lanka empowers the Parliament to exercise control over the public finance. It entails that all receipts of the Government by way of revenue and foreign aid, both grants and loans, should be credited to the Consolidated Fund, a Central Fund operated by the General Treasury for effective management of the finances of the Government. Any withdrawal from this Fund, irrespective of the quantum of funds involved, has to be effected by means of a resolution moved in the Parliament or in accordance with the laws governing such expenditure/services. All expenditures met from this Fund during a year are sanctioned in the preceding year by the Parliament and are published in the "Estimates of the Revenue and Expenditure of the Government of the Democratic Socialist Republic of Sri Lanka" (Budget Estimates). In cases where provisions have not been made altogether in the Budget Estimates or provisions are inadequate, and if such items are critical or cannot be postponed to the next financial year, such expenditures should also be approved by the Parliament in the form of Supplementary Estimates; otherwise such expenditures are illegal. Likewise, Government, compelled by circumstances, may also introduce new revenue measures after the adoption of the budget estimates. Such measures also should be submitted within the stipulated time limit approved by the parliament. Similar arrangements, as could be seen in the subsequent sections, are in place in the case of Provincial Councils as well. 2.02 All sources of revenue and areas of expenditure are worked out by the revenue and spending agencies respectively. These estimates discussed and agreed upon by the Treasury are later presented to the Parliament for its approval. In the first instance, only the aggregated revenue and expenditure amounts are presented to the Parliament as the Appropriation Bill. Once the bill is approved, the aggregated amounts under each head is broken down into programs and projects and are presented to the Parliament, for its approval, as the Budget Estimates. The general expenditure is grouped under two categories, namely the capital and recurrent expenditure. The Budget Estimates, in addition to the revenue, recurrent and capital expenditure, also contains details of the Advanced Account Activities carried out by government agencies, and the emoluments given to the public officers. A detailed account on the form of Budget Estimates are given in Annex I. The Planning Process 3.01 All capital projects approved by the Cabinet Ministers are eligible for budgetary support. The Cabinet also, under normal circumstances, approves only those projects whose economic and financial viability are proven/established by feasibility studies. In effect, all projects should contain the basic details such as the total estimated cost, benefits, and the implementation schedule. However, the Cabinet also, depending on the circumstances, approves projects so as to enable the relevant agencies to carry out feasibility studies, detailed designs, and prepare firm total cost estimates. The projects that are approved by the Cabinet are eventually included in the Public Investment Program 26 (PIP) which is the primary planning document of the Government. Once the projects are included in the PIP, they have a safe passage to the annual Budget Estimates. 3.02 Projects undergo a thorough screening process in the Department of National Planning (NPD) before they are referred to the Cabinet. Another feature of the approval process in the last few years is that all projects have to be cleared by the Central Environmental Authority as regards the impact of the projects on the environment. All projects should therefore obtain the environmental clearance in order that the NPD could appraise them. 3.03 Up to May 1996, the projects were submitted to NPD on a format named "Two Stage Approval Form". It is evident from the name itself that a project is approved in two stages. In the first stage, a project, depending on the prospects it has as revealed in the project proposal, is approved in principle by the Committee of Secretaries (now defunct) so that the sponsors could undertake feasibility studies, detailed engineering drawings and the like. Once the feasibility studies and the required information are received by NPD, the project is appraised for its financial and economic viability. If the project is viable, then it is referred to the Cabinet for approval. Now the procedure is slightly changed; a new format (Annex 2) has been introduced in place of the earlier form. This is a simplified version of the earlier format, placing greater emphasis on economic and environmental aspects, besides giving information of a general nature such as the project site and the surrounding areas, dates of commencement and completion, and the implementing and executing agencies. However, the rest of the procedure, namely appraisal by the NPD and the approval by the Cabinet, are still in force. Public Investment Program (PIP) 3.04 The PIP is a planning document which is basically a "Five Year Plan"; the distinct feature of it is that it is updated every year unlike in the case of the earlier conventional "Five Year Plan 1972-76" of Sri Lanka. By updating annually, investments in the current and in the following year become realistic estimates of the programs and projects approved for implementation during these two years. At the same time, the PIP also serves as an indicative plan showing in broad outline the possible investment in the respective sectors during the remaining three years. It is therefore evident that the sectoral investments in the PIP and the public expenditure program as reflected in the Estimates of the Revenue and Expenditure of the Government are identical. The apparent differences in the PIP and the Budget Estimates are due to the omission of items such as the recurrent expenditure, capital transfers and subsidies, and loan repayments in the PIP which is in effect, as the name suggests, is an investment plan. Project Pipeline 3.05 This is a companion volume to the PIP. In this document, projects identified by the line ministries are presented in order to solicit donor assistance. One of the objectives behind this volume is to offer the donors with increasing number of projects in all sectors, 27 thus providing them with a wider choice of projects. The majority of the projects are conceptual ideas requiring detailed studies. Nevertheless, the basic aim is to indicate to the donor community in broad outline, the "areas where they could contribute most profitably to the development of the country. Specific areas of support include assisting in the final project preparation or in financing the implementation of projects". The Provincial System (Finance) 4.01 The Thirteenth Amendment to the Constitution of the Democratic Socialist Republic of Sri Lanka brought into existence a new political and administrative structure - the Provincial Councils. There are in all eight Provincial Councils for the nine provinces. And the Ninth Schedule to the thirteenth Amendment specifies the subjects and functions that are devolved on the Provincial Councils, those that are reserved by the Government, and those that are concurrent. It is pertinent to look at the implications of the devolution of power on the institutional framework relating to the finances of the Provinces. The effective functioning of the Provincial Councils as well as the execution of the devolution powers and functions make it obligatory on the part of the Provincial Councils to enact their own statutes as a means to enhance their sources of income. Unfortunately, most of the Councils have not succeeded in framing the necessary statutes, thereby allowing the enhanced collection of revenue to go by default. Legal Provisions on Finances to Provincial Councils 4.02 The following legal enactments are available to the Provincial Councils for the mobilization, utilization and management of the Provincial finances: (a) Thirteenth Amendment to the Constitution (b) Provincial Councils Act No. 42 of 1987 (c) Provincial Councils (Consequential Provisions) Act No. 12 of 1989. 4.03 Some of the salient features of the Provincial Councils Act of 1987, in so far as the finances of the Provinces are concerned, are as follows: (a) Provides for the Government to allocate funds from the Annual budget as are adequate for the purpose of meeting the needs of the Provinces. (b) Specifies the principles on which the Finance Commission shall act in recommending the resource allocation, keeping in mind the objective of achieving balanced regional development in the country. The principles are as follows: (i) the population of each Province; (ii) the per capita income of each Province; (iii) the need to reduce social and economic disparities; and (iv) the need to reduce the differences between the per capita income of each Province. (c) Provides for the establishment of a Provincial Fund for each Province. The Fund includes: 28 (i) the proceeds of all taxes imposed by the Provincial Council of that Province; (ii) the proceeds of all grants made to such Provincial Council in respect of the Province by the Government of Sri Lanka; (iii) the proceeds of all loans advanced to the Provincial Council from the Consolidated Fund of Sri Lanka; and, (iv) all other receipts of the Provincial Council. (d) Provides for the Minister in charge of the subject of Finance to give guarantees in respect of loans raised by a Provincial Council. (e) Permits Foreign Aid to be negotiated by the Government for a project or scheme in a Province, and to be allocated by the Government to such project or scheme. (f) Provides for the Provincial Council to introduce an act in relation to any subject with respect to which the Provincial Council has power to make statutes only on the recommendations of the Governor, for: (i) the imposition, abolition, remission, alteration or regulation of any tax; (ii) the amendment of the law with respect to any financial obligations undertaken or to be undertaken, in respect of the administration of the Province; (iii) the appropriation of monies out of the Provincial Fund; (iv) the declaring of any expenditure to be expenditure charged on the Provincial Fund of the Province or the increasing of the amount of any such expenditure; and, (v) the receipt of money on account of the Provincial Fund of the Province or the custody or issue of such money. Local Government System (Finance) 5.01 The local bodies derive their income mainly from three sources, namely: (a) local taxation; (b) Grants from the Provincial Councils; and (c) Loans. The realization of these incomes by the local bodies depends by and large on the willingness of the relevant groups to pay the rates and taxes, and above all on the exploitative capacity and efficiency of the local authorities themselves to collect them. The local bodies over the years have lost substantial portions of their income derived from motor vehicle licensing, electricity, and water tariffs to the Central Government. Though there is a legitimate claim for the Central Government to collect these income fully on the ground that these services transcend the boundaries of local authorities. This has inevitably led to the erosion of the income base of the local bodies, and the existing sources also do not yield that amount of income to meet even the marginal cost of the services provided by the local authorities. It is to be noted that the local authorities among themselves control around one-half the total road mileage on the island. 29 The Form of Budget Estimates: An Explanatory Note The estimates of revenue are itemized under Heads, Sub Heads and Items; the classification is in accordance with the classification adopted by the United Nations. The estimates of expenditure are also classified into Heads, Programs, Projects, Objects and Financing Details. The objects are also itemized wherever necessary. A brief definition is given below in respect of each of the budgetary units mentioned above. (i) Heads - Units of appropriation showing the line of authority and accountability. Classification into Heads is on the basis of administrative structure - Ministries and Departments. (ii) Programs - Functional units of appropriation facilitating the extraction of expenditure on a functional basis. Accordingly, the major functions of each Head is listed and the expenditure necessary for fulfilling such functions is also given. For instance, the Sri Lanka Railways (SLR) has five Programs denoting the functional areas in the SLR, namely: Program 1 - General Administration (administration and establishment services) Program 2 - Transportation Services (motive power, operation of train and commercial activities) Program 3 - Purchasing, Overhauling and Maintenance of Rolling Stock Program 4 - Permanent way, signaling, buildings and new construction Program 5 - Working of the Kelani Valley Railway Line (iii) Projects - Sub divisions of a program highlighting an activity or a group of similar activities. It facilitates costing of each activity as well as the evaluation of input - output data. (iv) Objects - Economic cost components of a project. They are grouped into broader categories while maintaining the capital, and recurrent expenditure distinctions. Both recurrent and capital expenditure have seven categories respectively. Each of the above units are given numerical numbers. The numerical numbers of Heads begins from 200 onwards. Program are numbered consequently from 1 to 5. Projects are numbered in sequence from I to 199; of which 1-100 denotes recurrent expenditure while 101-109 denotes capital expenditure. Similarly, there are four digits for object codes. The first 30 digit indicates whether it is recurrent or capital expenditure. The next digits denote the economic category and the other two digits denote the object class. (v) Advance Accounts - The system of advance account denotes the provision of working capital to the Government Agencies that involved in commercial activities. The estimates under this category are presented by way of a schedule indicating the limits of expenditure, receipts, debit balances and the liabilities as well. It gives the maximum and minimum limits in each area. 31 FORMAT FOR SUBMISSION OF PROJECT PROPOSALS FOR PRELIMINARY SCREENING Department of National Planning The Secretariat Colombo, Sri Lanka March 1996 32 1.0 Project Title: 2.0 Justify why this project should be considered, indicating the main problems that are addressed through the project: 3.0 Immediate objectives/purpose of the project: 4.0 Project Outputs (Specify quantities and values): 5.0 Available documents (if any, please check appropriate boxes and submit them along with the duly filled form): Feasibility/pre-feasibility reports [ ] Project documents prepared according to donor format [ ] 6.0 Responsibility: 6.1 Implementing Agency/Ministry 6.2 Supervising Agency/Ministry 7.0 Duration: 7.1 Project Duration (number of years/months) 7.2 Expected year of commencement 8.0 Locational data (give details to the extent possible): District(s) Locality(ies) 33 9.0 Project Cost: Land/land development ............................................. .......................................................................I.......... .................... ........................................................................ ... Construction (Buildings, roads, etc.) ......................................I................. . ............................... ...................................................................................................................................... EquiVpment/Machinery (excl. vehicles) V e ................... - ,....................I................................... .................................................................................................. Vehicles ..... n.........t ............... ........ ....................................................................... .......................................................................................... Training .............. .. ................................................................................................... .................................................................................... I........... . Project Management and Operational Momtorin, .. ..... ......................'. ................................ . ........................................... .. ..................................... ............................... ................... . ...... ............. ............................................................................ ..................................................................... I.......................... BASE COST B A SE... .................... .......... .. ................................................ .................................................................................................. Add: Contingencies ................................... ................ ............................................................................. .......................................................................................... ... TOTAL COST ..................................................... ............................................................................. ......................................................................................... .... Out of the TOTAL COST, Foreign cost: (Rs mn); Local cost: Rs mn) 10 0 Project financing: I , ,,,,,,,.,,,,,,,,,, ........................----------- -- - -- - -!---'--'-''-'----'-'-----''-'-'''''-'-'-''--'------- Consolidated fiind Loans Others (in-kind contribution, banks, private sector, etc. , . . . . . . . . . . . . . . . . ........................................................................................................................ TOTAL . 11. 0 Environmental checklist: Use following key to characterize the significance of potential impacts (adverse or favorable) IIighly favorable: Hf Highly Adverse: Ha Not Clear: X Slightly favorable: Sf Slightly Adverse: Sa None: N a. Water Pollution ......-.......-.................................-................ ........................................................................................... Aikr Pollution ,. ......................................................... I.......... I....... ...................... .................................................................................................................... . ... c. Coastal Pollution d. Solid/hazardous waste F-------. --------.........I......................................................... ... . ..:.......... ........ .................................................... .... e. Soil and Land degradation f Groundwater extraction ,............................................................. .......... ....................... ................................................................................................................... . ... ..... .... ................................ ..........I................. ......................................................................................................I............................................ h. Impact on Wetlands , ...~~~~................................................................................. ..................................................................................................................... .... i. Human health impacts F..................... . ............. .... . ....... ...................... -------...................... ww X ........................................ I i- Reocation k.k. Impact on historical and '. ', cultural assets/values 1. Landscape/Scenic effects n c ............................... ...... .......... ............................. ........................................................................................... Urban congestion,, 34 12.0 Project benefits/impacts Use the following key to rank project benefits/impacts: Impact neutral X Unknown U Slightly Favorable Sf Slightly adverse SA Moderately favorable Mf Moderately adverse Ma Highly favorable Hf Highly adverse Ha a. Output and/or ....klMJI.entI .......................................................................... ............................................................................................................ b. Economic infrastructure ...................................................................................................................................................... ........................................... c. Financial and/or economic viability .... ....... ............. .......................... .................................................... ............................................................................... d. Income distribution and/or poverty alleviation e. Rural development. f Social infrastructure and/or human capital ........................................................................................................ ............................................................................... g. Place of Women and/or Children . ................................................................................... .................................................................................. ..... h. Natural resources and/or environmental management .................. ..................................................................................................... ....... ................ ............................................................................... i. Public sector capaiy i Public sector capacit.............. . .. 4 ................................................................................... ......................................................................... J Involvement and role of private sector f............................................................. ............................................................................ ...................... k. Science and technology 13.0 Monitoring and Evaluation (Delete what is inappropriate): 13.1 Performance & implementation monitoring reports: Monthly/Quarterly/bi-annual 13.2 Project benefit monitoring - Baseline : [Yes/No] Mid-term : [Yes/No] At completion : [Yes/No] 13.3 Ex-post benefit evaluation planned for? : [Yes/No] 14.0 Sustainability: 14.1 Recurrent cost implications (check appropriate box): High Medium Low None a.O & M costs of post-project operations [ ] [ ] [ ] * b. Expenses on additional permanent staff & establishment [ ][ ] [ ] [ ] 14.2 Involvement of beneficiaries (check relevant box): Major Minor None a. In project operations [ ] [ ] [ 3 b. In post-project management [ 3 [ 3 [ ] 14.3 Parameters which might lead to deterioration of project benefits in the long run: 35 GUIDE TO FILL THE FORM FOR SUBMISSION OF PROJECTS FOR PRELIMEARY SCREENING 1.0 Name the project: (e.g., Southern Highway Development Project) 2.0 Justification: Justify the necessity for the project by describing the main problems which are to be addressed through the project. Comment on the situation without the project and give reasons why the proposed alternative is selected, if there are other ways to address the same problems. Also, give reasons why this project should be given priority. 3.0 Immediate Objectives/Purpose of the Project: List the IMNEDIATE objectives of the project, while making a preliminary estimate (preferably in quantitative form regarding the IMMEDIATE benefits which are targeted through the project objectives. (E.g., To provide easy and fast access to south by achieving a 40% reduction of travel time, and a 30% reduction in fuel costs). 4.0 Project outputs: List the direct outputs of the project, with quantitative estimates and values wherever possible. (E.g., 120 km of highway with two lane traffic to each direction, access roads at four points, under- and over-passes, and service roads). 5.0 Available documents: The objective of this format is to improve the quality of project proposals at the earliest possible stage of project development. However, if pre- feasibility/detailed feasibility studies have already been carried out on the project, or if any project documents have already been prepared according to donor format, such reports or documents should be submitted to the Department of National Planning, along with the duly filled form. 6.0 Responsibility: Name the implementing agency/ministry and the supervising agency/ministry. (E.g., Implementing agency: Road Development Authority; Supervising agency/ministry: Ministry of Health and Highways) 7.0 Project duration: (E.g., 4 years and 3 months). Expected year of commencement: (E.g., 1997) 8.0 Project location: Mention the exact location(s) of the project, specifying the local authority(ies), divisional secretariat(s) and district(s). In the case of networks (such as roads/railways), indicate town on the proposed trajectory. (E.g., Kottawa, Bandaragama, Badddegama, and Matara) 36 9.0 Project cost: Fill the given table with estimated cost components. If any relevant cost category(ies) for the submitted project is (are) not identified in the form, specify them under "other costs. If possible, provide an estimated breakdown of the TOTAL into "foreign cost" and "local cost". 10.0 Project financing: Indicate the sources of financing, if identified, at least tentatively. 11.0 Environmental checklist: Characterize the significance of potential environmental impacts (both adverse and favorable, and both during and after the implementation of the project), using the key provided. Your assessment should be within the "local" framework of the project. Where significant adverse impacts are anticipated, list the mitigatory measures proposed, if any. 12.0 Project benefits/impacts: Rank the project benefits/impacts in a "macro" framework using the key provided: a. Output and/or Employment (including productivity and production capacity building impacts) b. Economic Infrastructure (Power, Telecommunications, Ports, Posts, Roads, Railways, Airport and Transport) c. Financial and/or Economic Viability d. Income distribution and/or Poverty (Net benefit/impact on equity and low income groups) e. Rural Development f. Social Infrastructure and/or Human Capital (Health, Education, Water Supply, Sanitation, Low-cost Housing, and the Development of Welfare Net) g. Place of Women and/or Children (Net benefit/impact on socio-economic standard of women and/or children) h. Natural resources and/or Environmental Management (Net effect on environment and/or natural resource base) i. Public sector capacity (Net benefit/impact on public sector skills and capacity building, mainly through efficiency of its operations) j. Involvement and role of private sector (The extent to which the private sector participates in project ownership, development, management, and post-project operations) k. Science and Technology (Net benefits/impacts of the project towards research & development, technology transfer, skill/capacity building on scientific and technical domains) 13.0 Monitoring and Evaluation: (Delete the option[s] which are not appropriate.) 13.1 This item is concerned with the monitoring reports on project performance and implementation. Identify the frequency of reports expected to be produced. 37 13.2 Indicate whether the activities relating to benefit monitoring (in the beginning, mid-term and by the completion of the project) are planned for. Though there are no benefits to monitor in the beginning, baseline survey is necessary to understand the pre-project state of beneficiaries. Some benefits, though the project is only half-way through, may be available by mid-term. These monitoring exercises are usually undertaken by outside consultants. 13.3 Ex-post benefit evaluation is usually done two to three years after the completion of the project implementation. Therefore, this item is not included in the project cost. The aim of this question is to see whether such an activity of ex-post project benefit evaluation is anticipated or not. 14.0 Sustainability: 14.1 Recurrent cost implications: Assess post-project recurrent costs (Post- project Operation & Maintenance, and salaries of additional permanent staff) by checking appropriate boxes. 14.2 Involvement of Beneficiaries: Check appropriate boxes indicating whether the involvement of beneficiaries in project operations and in post-project management is expected, and if so, to what degree. 14.3 Identify the areas of concern, which might affect long term sustainability of project benefits. These may include: parameters which could have impacts on continuous availability of inputs in adequate quality and quantities; outputs of the project which could possibly conflict with other activities and development objectives in the long run; other projects or programs in the region or sector the cumulative effect of which could adversely affect the benefits; areas which may require technology upkeep, skill building, or marketing to sustain benefits; and the long term validity of any important assumptions on which the project is built, etc. 38 6. Public Infrastructure: Private Investment Opportunities Nanayakkara, M7. Background. To encourage participation of the private sector in infrastructure development, the Government formed the Secretariat of Infrastructure Development and Investment (SIDI) in 1992 as an organ to promote private investment. SIDI was financed by technical assistance from the USAID and operated under the Ministry of Planning. After a review in mid-1995, the Government decided to restructure SIDI, creating the Bureau of Infrastructure Investments (BIL), which operates under the Board of Investment (BOI). The mission of the BII is to promote, facilitate and spearhead private investment in public infrastructure. Among the key objectives of the BII are: (a) assist the government in packaging transactions, (b) promote public infrastructure projects to investors; (c) provide financial skills to evaluate offers; (d) provide legal and negotiation input to the Government; and (e) provide the legal and regulatory environment necessary for private sector investments. Capital Investment Needs in Infrastructure. The infrastructure sectors in Sri Lanka have large needs for capital investment, in the order of US$ 3 billion (Table 1). . The biggest demand for investment is in the power and ports sectors. . There are a number of capital sources for infrastructure investments in the country including: (a) IFC; (b) Commonwealth Development Corporation; (c) World Bank; (c) Asian Development Bank; (d) Commercial Sources; (e) Infrastructure Funds; and (f) Private Sector Development Fund. However, given the fiscal strain the country is facing, it is imperative that it secures financing from the private sector. Table 1: Capital Investment Needs in Infrastructure Sector US$ Million Telecommunications 400 Power 1,500 Ports 900+ Transportation (Rail and Highways) 100+ Total Capital Needs 2,900_ Incentives to Private Sector. To attract private investors in large scale infrastructure, BOI gives a number of incentives. For investments exceeding US$ 10 million, BOI offers a tax holiday of 10 to 20 years, exemption from import duties, turnover tax & excise duties during project implementation, and tax concessions for non-resident consultants and expatriates. 7Board of Investment (BOI), Sn Lanka 39 Private Investment Opportunities. Among the areas included in the search of private financing are: power plants, port development, telecommunications, highways, railways, mass transit, water supply, solid waste, and airports. Since the initiative to seek private financing, a number of transactions have been completed or are in the post-negotiation stage in telecoms and electricity generation. Telecommunications was the first sector to be involved in private sector financing of infrastructure in Sri Lanka. Among the areas where private financing is in operation include: radio paging services, cellular mobile phones, data communication services, pay- phone services, mobile trunk radio network, and trunk telecommunication system. Projects at the post-negotiation/pre initialling stage include United Telecom (pvt) Ltd. and Telia Lanka (pvt) Ltd, both of which are BOT with a 20 year licence period, to provide 100,000 wireless telephones. The former is a US$ 204 million investment while the latter is a US$ 125 million investment. Electricity Generation. The power sector currently has available 1,385 MW of capacity. The country needs between 1996 and 2000, in addition to the existing capacity an additional 1,537 MW. Only about 270 MW of the additional needs can be met by hydro sources. Which means the remaining 1,267 MW will have to come from diesel, gas, combined cycle, and coal sources of generation. This presents a great opportunity for private sector investment. So far, in electricity generation, the Dikoya Mini Hydro project has been commisioned and commercial operation commenced in October, 1996. This is a BOO for a 1.2 MW capacity plant, with a 11 year renewable concession to a consortium of members: Vidya Silpa (Sri Lanka), Jiangxi Machinery & Equipment Import Export (China), and DFCC (Sri Lanka). The Sapugaskanda Diesel Project, which was initiated in March, 1996, has already been negotiated as a BOO for a 51 MW capacity generation plant. The investment is for US$ 62 million on a 20 year concession. Consortium members for this project are KHD Great Britain Ltd., IFC, and CDC/DEG. There is a barge mounted power project for 60 MW currently under negotiation. Other opportunities for investment in electricity include three projects currently under review by CEB: (a) Kelanitissa Combined Cycle Plant -150 MW; (b) Hambantota Refinery cum Power-300 MW; and (c) BiWater Mini Hydros Project-40 MW. Two other projects are under development by promoters: (a) Broadlands Hydro Project-40 MW; and (b) Strothert 2 Mini Hydros Project-10 MW. The CEB also has a Least Cost Plan under development. Self-Generation. The Government is also encouraging private financing of electricity under the self-generation program. For this it is providing a number of incentives until September 1996. These include: Rs 3 million (US$ 0.6 million) incentive for each 1 MW of capacity, an effective subsidy rate of 40%, interruptible power supply, Rs 240 million (US$ 4.8 million) incentive for BOI enterprises, Rs 150 million (US$ 30 million) incentive for non-BOI enterprises, and 135 MW of high-speed diesels. 40 Highways. The only projects that are currently in the pipeline for private sector financing are two expressways and a bypass road. These include: (a) Colombo-Katunayake Expressway which is US$100 million investment on a 27km stretch of highway; (b) Colombo-Matara expressway; and (c) Marine drive. Ports. In the port sector, there are a number of investment opportunities. The Government is now preparing the largest BOOT project for the Colombo port. This is a US$ 600 million investment for expansion of the QEQ and construction of additional breakwater and berthing. A letter of intent has been issued to P&O. In Galle port, private investment is being sought for a US$ 500 million investment for additional breakwater and berthing. A consortium led by Mot MacDonald is currently negotiating with the Government. Opportunities also exist for Trincomalee port. Small Scale Infrastructure: For infrastructure investments in the range of US$ 2.5 - 10 million, to attract private sector financing, the Government is providing incentives such as: tax holiday of 7 to 10 years; exemption from import and excise duties during project implementation, and tax concessions for expatriates. Lessons Learned. In its experiences so far in seeking private financing, the BOI has learned that it needs to have better inter-agency coordination to get good results. Other areas that need strengthening include the knowledge within BOI on finance and legal issues. The way in which proposals from the private sector are requested also needs to be improved as is the need to strengthen the capacity to prepare the regulatory and procedural framework for private financing. 41 7. Decision-Making in Project Procurement Norman, A8. Introduction. For the Government to make public sector investments more efficient it will need to reform the processes by which projects are implemented. Among the key areas requiring reform is the system of procurement. At present, procurement decisions are made in a very centralized manner using a system of central approval processes. These processes cause delays in implementation and suffer from a number of problems including information asymetries due to the non-involvement of line managers. There is a need to reform the existing system. Decentralizing responsibilities for procurement to the line managers while strengthening their capacity to manage projects will greatly enhance the effectiveness of public investments. Implementation Delays. At present there are frequent and long delays in awarding contracts for services, civil works, and goods in Sri Lanka. Such delays, in turn delay project implementation, which leads to increased costs and scope reductions to keep within budgets. All these factors reduce the benefits and returns on investment, and jeopardize the ability to mobilize funds for future investments. Key Procurement Se. There are four key procurement stages at which approvals are needed and where delays happen: (a) production and approval of prequalification o shortlisting documents; (b) evaluation of submissions and approval of prequalification/shortlist recommendations; (c) production and approval of bid documents; and (d) evaluation of bids and approval of contract award recommendations. Procurement Approvals. Typically, for even modest value contracts, each approval requires: (a) scrutinity and recommendation by a Technical and Financial Evaluation Committee (T/FEC); (b) endorsement by the management of the concerned Government Department; and (c) approval by a Cabinet Appointed Tender Board (CATB). In addition, Cabinet approval is usually needed. Issues and Consequences. The problems of the current system of approval above has a number of consequences. First, project managers who have more superior knowledge about the investment are largely excluded from the scrutiny and approval activities. Second, the T/FEC and CATB are comprised of busy people with other responsibilities, and so they do not pay particular attention to the details of the project that may result in future delays. Third, a body like the T/FEC may have certain authority but also has the option of referral to higher authority for guidance, an option that frequently results in delays. Finally, each approval process for each contract in a project may take many months. Towards a Solution. An ADB financed Technical Assistance has been launched to find a solution. This TA is managed by the Ministry of Finance with inputs from other 8Asian Development Bank (ADB) 42 Government agencies. The effort under this TA deserves commitment and cooperation to find acceptable ways of decentralizing Government procurement decisions to the most appropriate level. The Prizes. There are two key potential benefits from a decentralized system of procurement: (a) greatly improved returns on project investments; and (b) safeguarded ability to raise funds for future project. The importance of these prizes cannot be overstated. 43 PART II. SUSTAINABLE PROVISION OF TRANSPORT INFRASTRUCTURE AND SERVICES 8. Opportunities for Employment Generation in the Transport Sector Chandrasena, S.9 A. Introduction Improvement of transport is a continuing process and has a direct relationship to economic development. Transport is one of the vital inputs which generates growth by facilitating trade both domestically and internationally on one hand, and by increasing access to social amenities such as education and health on the other. The transport system in Sri Lanka can be broadly divided into two sectors namely transport infrastructure and transport services. Infrastructure in transport consists of roads, railways, air and sea routes while, transport services include passenger and freight services. The passenger transport market in Sri Lanka consists of peopleised bus companies, large number of private bus operations, Sri Lanka Railways (SLR), and a relatively small percentage of domestic air, sea and canal transportation. The former two are operated under private ownership, while the SLR is a fully stated owned organization. Freight transportation is handled by the private sector, the Shipping Corporation and the Ports Authority. The significance of the transport sector in the economy can be measured by using macro economic indicators such as the size of the transport sector in the Gross Domestic Product (GDP), expenditure on transport in total government expenditure, share of investment in transport equipment in the Gross Domestic Capital Formation, and employment generated in the transport sector as a share of total employment in the country. The transport sector including transport infrastructure and transport services is a vital source of labour absorption in the country. Increasing transport activities creates additional job opportunities in the other related ancillary service sectors, such as service stations, garages, fuel stations, directly and in the wholesale and retail trade sector, communication and storage sector, hotels, insurance and real estate sectors, indirectly. However, information on employment creation in the transport sector is not readily available as this sector is incorporated in broader sector namely transport, storage and communication services according to the standard industrial classification. Therefore, it may not be possible to disaggregate the transport sector's vital contribution to the economy. Gaps and deficiencies in the sources of data on employed persons in the transport sector impose constraints to conducting a comprehensive analysis on employment creation in the transport sector during last two decades. 9 Director, Central Bank of Sri Lanka, Rural Banking and Staff Training Center 44 B. Sources of Data Census of population in 1981 and the Consumer Finances and Socio Economic Survey (CFS) conducted by the Central Bank in Sri Lanka and the quarterly labour force survey, conducted by the Department of Census and Statistics are the available data sources at present to asses the employment situation in the transport sector. However, a population census has not been carried out since 1981 due to the security conditions prevailing in the country, and hence 1981 census data is now out dated. Similarly, the latest CFS was conducted in 1986/87. The Quarterly Labour Force Survey conducted by the Department of Census and Statistics since 1990, covers 2500 households in each quarter and 10,000 households in a year. The sampling error is high due to the smallness of the sample. However in this survey also employment data on the transport sector are presented together with the storage and communication sectors. In view of the difficulty in disaggregating this sector it may not give a realistic picture of employment generation in this vital sub sector. Further, it is evident that employment creation in the transport sector tends to be under-estimated due to the difficulty in identifying this sector separately. This statement is further confirmed by observing the data from the 1981 population census. Employed persons in the transport sector was estimated at 168,170 in the 1981 population census. Based on that the Transport Study and Planning Center (TSPC) has estimated the number for the year 1989 to be 237,502. However, the quarterly survey on labour force indicated that the transport sector together with storage and communication sectors provided employment only for 221,239 persons in 1990 (Table 1). Therefore, disaggregating this broad sector may further distort the employment creation in the transport sector. Inconsistency of these figures and gaps and deficiencies in the data sources suggest that a comprehensive survey targeted specifically on employment generation in the transport sector is a necessary requirement. Apart from that, the classification of industries will also pose problems in estimating the total employment generation in the transport sector. According to the classification of Industrial sector (ICIS) employed persons in land vehicles, railways, air and sea and other connected services such as persons in filling stations, garages and service stations are included under the transport sector. Therefore, job opportunities directly related to these sectors are considered as employment created in the transport sector. Employment opportunities generated in the other service sectors such as persons employed in spare parts shops as a result of the increasing number of vehicles comes under wholesale and retail trade sector. Further, the improvement of the road networks provided jobs for quarry men where these jobs come under Mining and Quarrying sectors. Therefore, an estimation of employment opportunities created as a result of the increase in transport sector activities is a difficult task. 45 Table 1 Employment in the Transport Storage & Communication Sector Total Employment Employment in the (3) as a % of (3) as a % Employed in the Services Transport, Storage the Service of the Total Sector and Sector Employed Communications (1) (2) (3) (4) (5) 1990 5,159,383 1,870,605 221,239 11.8 4.3 1991 4,898,957 1,794,090 198,697 11.1 4.0 1992 4,846,001 1,998,535 259,446 13.0 5.3 1993 5,249,008 1,740,618 223,432 13.0 4.3 1994 5,299,078 2,404,452 295,519 12.3 5.6 1995 5,339,646 2,146,733 236,837 11.0 4.4 Source: Department of Census & Statistics, Quarterly Labour Force Survey C. Present Situation in the Transport Sector In the absence of reliable data on employment creation in the transport sub sector, indicators such as vehicles registered with the Motor Traffic Department can be used to asses the employment creation in this sector. Information available in Table 2 reveals that there has been a considerable increase in new registration of passenger transport vehicles in 1990 when compared with 1981 (almost 300%). This was mainly due to the increased profitability in this area. However, after 1990 this increasing trend has been reversed indicting that investment in private passenger services sector is becoming less attractive to new entrants to this sector. Pricing policy has not been kept in pace with the escalating cost of inputs and this has been the major contributory factor to the declining trend observed in the passenger transport sector. In contrast to the performance observed in the passenger transport services, the new registration of goods vehicles showed a significant expansion in 1995 when compared with 1990 (3 fold increase). This suggests that there is a greater scope for the development in this expanding sector with the development of trade, both domestic and international. Consequently, additional employment creation in this sector can be expected in future. Similarly land vehicles which include tractors and trailers registered a 536 increase in 1995 over 1990. These vehicles are used as a mode of transport particularly in remote areas in Sri Lanka. The increasing trend in new registration of tractors and trailers also indicate that there is a greater scope of creating employment opportunities directly through the transport sector and indirectly through connected service sectors. 46 Although data are not available to measure the indirect employment created in the other ancillary services as a result of the performance of the transport sector, indicators reveal that a considerable number ofjob opportunities would have been generated during the past few years. Judging by the fuel stations and service stations registered with the Ceylon Petroleum Corporation, it is evident that the number of jobs created in these areas have grown significantly. Additional job opportunities are created in other connected services such as increasing jobs in spare parts shops, garages, tyre shops, etc. This indicator showed that there is a greater scope for expansion in employment opportunities in the transport related sectors by expanding the infrastructure in transport and services. Similarly, three wheelers which can be identified as a source of self employment creation have increased considerably during past several years. The performance of the Sri Lanka Railways in creating employment opportunities showed no significant improvement over the past several years. The total work force engaged in the Sri Lanka Railways was around 22,000 in 1995. The deterioration in the performance of the Sri Lanka Railway was largely due to the lack of investment in strengthening and maintaining rail infrastructure in the past years. The unsatisfactory conditions of the existing rail tracks, insufficient availability of locomotives, obsolete conditions of the existing locomotives and outdated communication and signaling systems adversely affected the scale of operations and lowered the quality of service. There were also disruptions to railway operations in the Northern and Eastern parts of the country due to the prevailing security conditions. A significant number of persons is employed in the Ports Authority which is responsible for developing the port network. This is vital to support export led growth. The main port is in Colombo where around 16,000 permanent employees with a large segment of casual and contract workers are engaged in port activities. Trincomalee, Jaffna and Galle are the other ports in Sri Lanka where relatively a small number is employed. Analysis of the present unsatisfactory performance in the passenger transport sector suggests that policy reforms during last two decades have not been successful in meeting with needs at present. Therefore, policies should focus on removing constraints faced by this crucial sector in providing employment opportunities to a rapidly growing labour force in our country. D. Future Prospects (a) To achieve economic and social sustainability, improvement in the existing transport infrastructure should be given utmost priority. A large part of the road network, particularly in the provincial and local authority areas, are in a bad state of repair due to negligence of routine maintenance. A substantial increase in vehicular traffic adds further pressure to the existing road network causing production losses. Hence, rehabilitation and proper maintenance of the road network, as well as the construction of alternate 47 highways in major cities should be given high priority. In Sri Lanka, a large segment of the population lives in rural areas. There is a greater demand for better transport facilities in these areas. The income of the people living in these areas depend on their ability to produce and market their agricultural products. Improvement in transport activities will result in a reduction in the cost of inputs which in turn increases their profit margins. Providing better transport infrastructure will create more job opportunities particularly in the non agricultural sector. In rural areas more labour can be used to construct, maintain and rehabilitate the present road network. Labour intensive methods in rural areas may be less costly than using capital intensive methods. consequently, small enterprises will become a major important source of demand for the transport facilities thus providing a scope for employment creation in these areas. Small scale contractors should be encouraged to undertake the construction work of rural road networks, by providing them with necessary financial assistance. Training must be provided to contractors in the use of labour intensive techniques, thus allowing them to absorb rural unemployed, particularly the female workers. (b) Developing infrastructure facilities mainly in the transport sector is a prerequisite for the economic development in rural areas. Regional development through the distribution of industrial locations into regions will create demand for better transport facilities which in turn helps to absorb the growing labour force in rural areas. This regional industrialisation will discourage migration to urban areas and increase employment opportunities in rural areas. At present, most of the industries are located in cities mainly due to the availability of better infrastructure facilities in major cities. The establishment of industries, particularly garment industries in rural areas is a good attempt toward promoting industrial activities which will result in an increase in labour absorption in rural areas. This policy needs to be balanced against the greater demands for infrastructure investment of a dispersed location policy. (c) In Sri Lanka, the structure of employment is changing rapidly over the past several years, shifting from the agriculture sector to the newly expanding industrial and services sectors, thus, creating more job opportunities particularly, in the urban sector. Increased urbanisation will demand better quality infrastructure services such as rehabilitation of the present road network as well as construction of super highways. The provision of better transport facilities is one of the major inputs to industrial development which in turn facilitate international trade. Among industries registered under the Ministry of Industrial Development, 77% of the industries are located in the Colombo district. This is mainly due to the availability of transport infrastructure facilities in major cities. Therefore, the improvement in the existing transport infrastructure facilities is a necessary 48 prerequisite for a sustainable industrial development. This would result in creating additional employment opportunities in other connected service sectors in urban areas. Apart from this, increasing employment opportunities in the industrial and other service sectors may help to absorb the redundant labour in the agriculture sector. (d) The demand for passenger and freight transportation is growing rapidly with the increased personnel income and changing markets in the country. This situation can be further confirmed by analyzing the information on average buses operated per day, passengers carried by buses and the operated Kilometers by the buses and the railway (see Table 3). The average number of buses operated per day by the peoplised bus companies was 4,692 in 1995, when compared with 4,207 buses in 1994. Traffic carried by these companies increased by 24% over 1994. The operated Kilometers also rose by 14%. In contrast, passenger Kilometers by rail increased at a lower rate of 6% in 1995 when compared with a 14% increase in 1994. These statistics indicate the growing demand for the passenger transport sector particularly in road transportation. In 1980, the Central Transport Board had a bus fleet of 7,545 buses of which 6,275 where scheduled for daily operation and the average operated per day was 5,670. At present, the fleet of the peoplised companies is estimated to be as 8,807 buses and the number scheduled for operation is around 6,218. The average of buses operated daily is only 4,692. The above figures clearly indicates that there is an expansion in demand for transportation and meaningful measures have to be taken to cater to this growing demand in order to develop this sector as a potential source of employment creation. Further, the rapid increase in school and office vehicles may be a good indicator of increasing demand for transport services. This is mainly due to the deteriorating conditions of the bus and rail transportation. (e) The rehabilitation work in Northern and Eastern provinces will generate an increasing demand for transport services and infrastructure facilities. Consequently, labour absorption in this area will grow faster providing a better environment for the development of this region. (f) The liberalization of the economy in 1977, expanded trade both nationally and internationally over the past two decades. Consequently, demand for freight services showed a considerable expansion indicating this sector's capacity in absorbing unemployed population in the country. The increased number of registration of goods transport vehicles also suggests that there is a greater demand for these activities which generates more employment opportunities in this sector as well as in the other connected service sectors. Rapid growth in the manufacturing sector also facilitate the generation of employment in freight transport. According to National 49 Account Estimates, this broad sector of transport, storage and communication recorded a growth of 5.5% in 1995 mainly due to an increase in road haulage brought about by the expansion in the output of the industrial sector. With regard to the freight handled by the railway, a continuation of the declining trend was observed during previous years. To continue the increasing trend observed in the road haulage, improvement of the present road network should be given high priority, thereby leading to sustainable employment generation in directly related as well as indirectly related sectors. (g) With regard to freight transport, development of the ports of Galle, Trincomalee and Kankesanturai will facilitate domestic trade through regions which in turn create a sound environment for new job opportunities in the shipping sector directly and in other service sectors indirectly. E. Employment Oriented Policies and Institutional Reform (a) Economic and financial sustainability in the bus transport sector requires urgent attention in order to enhance investment opportunities in the transport sector. (b) Expansion of the role of the private sector in the development of road infrastructure and transport services by allowing them to create a more competitive transport market would enhance productivity of transport- dependent activities; generating more employment opportunities. (c) Structural and managerial inefficiencies should be removed by restructuring and reorganizing both the Peoplised and Private Bus Companies, to allow more effective competition. (d) Fares should be rationalized and deregulated to keep pace with escalating costs of operation to allow entry into the transport service provision markets. (e) Duty rebates or concessions should be provided to import buses. (f) Implementation of a programme for the effective participation of the rural sector people on the designing, construction and maintenance of transport infrastructure and eliminating constraints faced by small scale contractors through providing financial assistance, would assist in creating employment. (g) Supporting cost-effective labour-based methods for constructing and maintaining transport infrastructure would also generate employment in the rural sector. 50 (h) To satisfy demand for public transport in the rural sector, a compensation scheme should be introduced to the private sector operators where the transport services are not remunerative. (i) With the conversion of the railways into a commercial venture, measures should be taken to mitigate the effects of labour redundancy in this sector, by ensuring re-employment or providing financial assistance. (j) Finally, to be in line with the changing characteristics of world trade as well as to meet the growing aspirations of the people for a better quality of life, it is necessary to adapt transport policies that are more economically, financially and socially sustainable. F. Summary and Conclusions The transport sector is one of the expanding areas which helps to generate more employment opportunities which in turn facilitate to increase the aggregate output of the economy. Improvement of the transport sector will create additional demand for jobs in transport related services such as garage service stations, fuel stations as well as demand for other skilled labour. At present, there are several impediments to the growth of this vital sector. Although, information on labour absorption in the transport sector is not readily available, indicators show that there is a greater potential of expansion in creating employment opportunities in this sector as well as in the other ancillary services sectors. Unsatisfactory performance both in the bus and the railway sectors and the deteriorating conditions in transport infrastructure, hindered the development of this sector during the last two decades. The implementation of labour intensive and cost effective programmes in the improvement of transport infrastructure would be an appropriate measure in easing the unemployment problem to some extent, particularly in rural areas. Involvement of unskilled labour in constructing and maintaining infrastructure work will create additional employment opportunities in the other connected service sectors. Small scale contractors should be encouraged to undertake construction work in small scale roads. Regional industrialisation is also an appropriate measure to develop rural areas thus providing employment opportunities in these areas. Developing infrastructure and services in the transport sector will pave the way to increase industrialisation which will in turn create new job opportunities in urban areas. To cater to the growing demand in the transport sector, encouraging private sector participation is a necessary requirement. In order to achieve rapid growth, policies should be focused on eliminating obstacles for the creation of a competitive environment through encouraging private sector participation in the transport sector. The commercial viability of the passenger transport sector is a necessary requirement for expansion in this area. Managerial inefficiencies and structural deficiencies should be eliminated. Fares should be rationalised and deregulated in order to increase profit margins. Expansion of the role of the private sector in the development of transport infrastructure and services is necessary, requiring a 51 commercially viable management approach in the railway system. Such reforms will ensure a sustainable well functioning transport system which is a crucial determinant of a country's economic growth. In conclusion, the opportunities for employment generation in the state owned transport sector seem to be deteriorating with the restructuring of the Railway system. Consequently, labour redundancy will occur rather than employment creation. The only available scope for absorbing labour is the opportunities that would be created by the private sector. To encourage private sector participation in investing in this sector, a financially and economically viable environment should be created by eliminating constraints to entry. This would result in the creation of direct employment opportunities in the existing transport infrastructure and services which would in turn lead to an increase in labour absorption in the other growing ancillary service sectors. Therefore, as a potential source of new employment creation, enhancement of private sector participation should be given utmost priority to achieve sustainable economic growth in the long run. However, the intervention of the Government should be necessary to some extent for the enforcement of law relating to the provision of a safe, efficient and a reliable transport service to public. Table 2 New Registrations by Class of Vehicles Class of 1981 1985 1990 1991 1992 1993 1994 1995 Vehicle ................... ............................................................................................................................................................................................ Passenger Transport Vehicles Private Cars, Hiring Cars & Car Trailers 5,760 6,978 9,831 6,620 9,346 7,829 12,719 18,86 Motor Cycles 17,160 22,782 84,424 58,643 65,834 53,934 36,791 34,0 Private Buses 2,330 91 88 272 425 295 476 Hiring Buses - 3,462 1,071 2,987 2,449 1,835 3,347 1,65 Dual Purpose Vehicles - 1,121 5,225 8,456 10,831 8,973 9,798 6,97 TOTAL 25,250 34,434 100,639 76,978 88,885 72,866 63,131 61,70 Goods Transport Vehicles Lorry Proper 7,785 7,098 2,756 3,052 3,909 4,653 4,971 11,17 Lorry Tractor 01 01 - 10 - - 20 10 Lorry Trailers 194 103 38 43 101 94 110 11 Lorry Others 56 14 20 95 136 201 95 9 TOTAL 8,036 7,216 2,814 3,200 4,146 4,948 5,196 11,49 Land Vehicles Tractors 733 664 392 582 1,182 1,563 1,807 2,32 Trailers 941 543 242 333 553 928 1,184 1,70 Others 2,371 2,942 2,038 3,088 3,752 4,156 4,169 5,08 Ambulances 31 05 21 69 131 04 33 2 Hearses 05 04 - 07 03 04 TOTAL 4,045 4,149 2,672 4,003 5,487 6,647 7,160 9,12 TOTAL 37,367 45,808 106,146 84,257 98,652 84,469 75,520 82,34 Source: Department of Motor Traffic 52 Table 3 Salient Features of the Transport Sector 1991 1992 1993 1994 1995 1. Regional Bus Companies Operated Kilometers (Mn) 247 351.1 Passenger Kilometers (Mn) 11454 19361 Total Revenue (Rs. Mn) 2761 4339.5 2. Sri Lanka Railways Operated Kilometers (Mn) 7.6 8.1 8.2 8.0 8.0 Passenger Kilometers (Mn) 2653.4 2613.4 2821.6 3201.7 3404.0 Total Revenue (Rs. Mn) 808.0 885.0 820.0 916.0 947.0 Sources: Sri Lanka Railways, Sri Lanka Transport Board, and National Transport Commission 53 9. UNDP Goals of Sustainable Development and Transport Sector Strategy Conroy, R'0 Hon. Sr;mani Athulathmudali, Minister of Transport, Environment and Women's Affairs, Mr. Cecil Amarasinghe, Secretary, Ministry of Transport, Environment and Women's Affairs, Ms. Humplick, Mr. de Mel, Director, TSPC, distinguished invitees, colleagues and participants. It gives me great pleasure to speak a few words on behalf of UNDP, at the opening of this important workshop which is organized by the TSPC under a UNDP and World Bank assisted programme of Transport Sector Development. As you are aware, UNDP supports this programme through provision of technical assistance to the tune of US$536,000 to assist the Government of Sri Lanka to refine and strengthen its institutional framework for multi-modal transport sector planning. The main output of this project is the development of a National Strategy Document covering all modes of transport and a complementary set of specific policy action plans designed to implement the strategy. This document, it is envisaged will form a framework to coordinate transport policy and investment with the country's overall economic and social development goals. The UNDP financed project is concerned with the formulation of a strategy to increase the efficiency of the transport sector and maximize its contribution to sustainable economic development. With the introduction of the "changed vision and goals of UJNDP" within its new development paradigm, UNDP is increasingly focussing attention on supporting projects and programmes which clearly foster Sustainable Human Development (SHD), in particular, those emphasizing poverty alleviation, sustainable livelihoods (employment creation), gender equity (empowerment) and environmental management. Our technical assistance focuses on these thematic areas and capacity development for good governance needed to achieve these objectives. In this we try to avoid providing assistance to physical infrastructure development projects that require substantial financial investment and face serious environmental or social risks. Our aim is to ensure that UNDP's development activities do not lead to harmful effects on the environment or vulnerable social groups and are ecologically and socially sustainable throughout all stages of the programme/project development process beginning with identification and continuing through and beyond implementation. It is within this SHD framework that we agreed to provide assistance to this project as the outputs would lead to environmentally sound and sustainable development. Within this SHD framework, UNDP sees institutional development as an integrated, multi-disciplinary, holistic process as it addresses the concerns of participatory development, public-private partnerships and promotes or facilitates sustainable livelihoods through which lies great potential for alleviating poverty. 10 Deputy Resident Representative, UNDP, Colombo 54 Cognizant of rapidly changing technology and the globalization of national economies and the complexities associated with it, UNDP agreed to provide assistance to formulate a National Transport Policies. Transport and communication play a key role in reducing absolute poverty by improving the movement of people, goods and information. If SHD is people centered development, SHD focussed activities should focus on widening the choices available to the people and empowering them to access resources and services such as land, capital, and other economic and social goods and services. In this context, transport and communication can contribute to integrating the different regions of a country into the mainstream of economic activities thus facilitating rural- urban linkages, equitable distribution of the benefits of growth from the centre to the periphery, and promotion of backward linkages, thus involving participation of the poor into the economy, making them the real players, and reducing rural-urban migration. However, we should also note that transport and communication alone cannot alleviate poverty. We have to identify how best the transport sector can meet the challenge of poverty alleviation. This can be achieved by creating interaction and close relationship between trade and transport programmes to achieve the ultimate objective of poverty alleviation. Therefore, national programmes such as these should focus on creating the right environment for such an integrated approach. With the liberalization of the economy and privatization process being pursued by the government, the transport sector has to play a key role in facilitating the private sector if it is to function as the engine of growth. The structural adjustment policies, public reforms, and the re-orientation of trade from an inward-looking to an out-ward looking open market system creates additional demands on transport, particularly inter-regional transport and also on communication services to carry the cargo or transmit information. The already available transport capacities in the countries in Asia, and particularly in Sri Lanka, are being stretched to the limits (ships queuing for berths, road and traffic congestion, cargo delays in air and sea ports and in railways, depleted fleet of vessels, wagons, etc.) all of which require an integrated approach and a coordinating mechanism within a comprehensive national framework and a policy and strategy. Without major improvements in the capacity, reliability and efficiency of the transport services, economic growth achieved over the last 5 years cannot be sustained. In upgrading transport services the possibilities are the exploitation of new technologies such as containerization, establishing trade information networks, computerization of import export data and facilitation of clearance at sea and airports, etc. complimented by the introduction of multi-modal transport, commercialization and management, and the involvement of the private sector to maximize efficiency of the transport system. I am confident that the studies done under the project by the World Bank experts in collaboration with the National consultants and the senior officials attached to the TSPC and other relevant agencies would have identified these strong linkages and the intrinsic relationships. What is required is a holistic approach to facilitate growth and distribution. The UNDP funded project therefore, provided funds to strengthen the capacity of the TSPC and planning capabilities of its staff and the staff of other agencies involved in transport planning to undertake such studies and to formulate a National 55 Transport Strategy. It is the role of the Government to provide this regulatory and planning framework within which the transport sector would operate in order to promote national goals of sustained growth and cost-effective and efficient services to the trading community, investors and the general public while guaranteeing social equity at the same time optimizing the allocations of resources. UNDP support to the TSPC to enhance its capabilities as mentioned earlier assists the Government to do just that. Hitherto planning has not taken into account the increasing competition between modes (rail, roads and internal water-ways) and between countries that may offer transport services (regional shipping, air). These elements were not recognized in the planning process which focused only on individual modes or even project level developments rather than national, regional and global transport and communication linkages. Therefore, I am glad that UNDP came forward to continue with the assistance provided to the TSPC earlier until 1990 by the World Bank through assistance to the data bank. With the UNDP's on-going assistance for bridging gaps, the background studies and other relevant papers which will be discussed today will lead towards the formulation of a comprehensive transport strategy. I am sure that the World Bank will continue not only its back-stopping and provision of experts advice but also funding that would be required for further development towards finalizing the Strategy which would ultimately be approved by the Cabinet of Ministers. UNDP is happy that we were able to provide funds to the Ministry of Transport not only for this project but also for the project on Bus Drivers Training which subsequently was modified to help training of the Managers and other staff of the peoplised bus companies. I am sure that these studies would shed some light on addressing the issues that are being faced by the Ministry and the Provincial councilors in running the peoplised bus companies in an efficient manner to ensure cost effective services to the public. I hope that you would have useful deliberations during the next two days and enable those who are involved in decision making to have a clear vision of the role of the transport sector in the country's overall development and enable formulation of an appropriate strategy for transforming the transport sector into an effective and efficient public/private partnership. The pragmatic solutions will help in promoting environmentally sound sustainable development of the sector and the economy as a whole. 56 10. Complexities in the Relationships Between Railway Costing, Railway Marketing, Joint Development, Externalities, and Transit Integration Diandas, J." 1. Introduction 1.1 Railways enjoy a set of technologies which ensure economy in energy, space, wear and pollution and which enable fast safe travel provided sufficient demand is available and attracted to use such travel. 1.2 However, most, if not all, railways, and in particular the Sri Lanka Railway, are largely innocent of marketing, hence cannot exploit the full advantages of those technologies. When the only competition was animal-drawn and water transport, railways expected the customer, whether traveler or consignor of goods, to come to them, rather than they seek out the customer. Most railways have still not emerged from this mind-set. 1.3 So far as the Sri Lanka Railway is concerned, the crisis-ridden need to keep the railway rolling from day to day has pre-empted high level thinking time, leaving little time to think about the future, or even to contemplate optimizing revenue from existing fit, but under-utilized assets. 1.4 These twin defects, namely innocence of marketing and near total pre-occupation with day-to-day issues, as well as other restraints, have led to the following among other deficiencies: (a) Inadequate understanding, display and explanation of railway costs; (b) Inability to convince successive governments of the need for electrification and other appropriate technologies; (c) Failure to p propagandize the external benefits to society of railway transport as against other modes; (d) Loss of tea transport even during periods when government owned and ran the tea estates; (e) Failure to develop off-peak and reverse peak travel; (f) Retreat from key locations such as Katunayake Airport, Orudodawatte curve and Kehelwatte land; Chairman, National Transport Commission, Sri Lanka 57 (g) Unsuitable location of new stations, e.g. at Anuradhapura Navanagara and Mihintale; (h) Opposition to, instead of promotion of integration with bus services; and (i) Lukewarm approach to joint development of station property and other railway lands. 1.5 All of these failures have contributed towards: (a) Exacerbated need for external funding; (b) The reluctance of Government and external financiers to provide funds; and (c) General and media awareness of the advantages of railways; 1.6 Hence this paper will examine some of the main issues in turn in the following sections: (a) Problems of allocation costs between services and segregating transfer payments and the costs of enforced obligations; (b) Marketing initiatives which could increase revenue at low marginal cost; (c) Integration of railway and road transport of passengers and goods; (d) Fashioning an attractive image which would find favor with public, media; (e) Potential for joint development; (f) Defining and valuing the factors whereby railways impose less environmental and congestion costs on society than other modes; and (g) Methods of enticing cash flows from passengers, tax-payers (via Government), and external agencies. 2. Costing Problems 2.1 The media, the public and the political community are always prone to take published accounts at their face value. But published accounts are notorious for lack of transparency. They tend to display minimum data and are based on many assumption, some of which are questionable. 2.2 These deficiencies are particularly acute in railway accounts, where a large part of expenditure cannot be truly allocated between goods and passenger services, and between different lines, trains and types of trains. 58 2.3 Furthermore, the distribution of capital costs over the years during which capital assets can be utilized is largely based on arbitrarily decided rates of depreciation or an archaic accounting systems. 2.4 Moreover lenders and treasuries compute viability using the notions of "discounted cash flow" and "net present value" which distort the value of projects and investments with extended time horizons. 2.5 The difficulty in ascertaining true costs (or even approximately true costs) is explained in the 1993 Administration Report (the most recent one available) in the following terms: "The accounting system is designed to satisfy mainly the requirements of the Treasury. (Hence) A costing exercise was a separate exercise by itself as data to be reprocessed separately." 2.6 Assuming that the overall cost of running a railway has been reasonable compiled, the following among other problems arise:- (a) Track, Signals and Stations: how to allocate the costs among trains? (b) Segregating the cost of temporarily or permanently redundant staff, track, vehicles, etc. (e.g. the extra cost of 4-man train crews where 2 men would suffice); (c) Extracting transfer payments (especially tax encapsulated in the cost of supplies) which are not a resource cost but a transfer of purchasing power from the railway to government; and (d) Ascertaining the marginal resource cost of running particular trains. 2.7 Allocating infrastructure cost is a vexed question about which many learned studies have been undertaken and published in USA, Canada, Germany, Britain, etc. Some railways charge the bulk of infrastructure costs to the main train type (e.g. goods, or suburban passenger, or whatever is dominant) and charging only marginal cost to other train types. But other railways divide infrastructure costs in proportion to train miles, gross-ton-miles, revenue earned, and some other indictor of usage. Yet others do not attempt to allocate but retain infrastructure cost an unallocated cost along with overheads, to which the different user activities make contributions out of the surplus of their revenue over directly distributable costs. 2.8 The heaviest infrastructure cost is for maintenance of the right of way and the track. The cost of this is occasioned partly by the weight, volume and speed of axles passing over it, partly by the weather and partly by other factors including the need to 59 protect the line even if not trains run. The cost of signaling is largely unaffected by the number of trains. The cost of stations is primarily a function of the volume and time-wise spread of passengers. 2.9 Unless a reasonable method of allocating costs is established, any railway will not be able to make appropriate decisions on the following among other issues: (a) Whether to inaugurate or withdraw particular trains; (b) Whether to construct or abandon particular lines, branches, sidings, tracks or other facilities; and (c) What expenses can be pruned without undue safety risk or loss of patronage. 2.10 Of particular interest in this regard is that BN (Burlington Northern), one of the most successful American railroads which has recently merged with ATSF (Atchison, Topeak & Santa Fe) is presently regretting the cost-cutting enthusiasm of an earlier "outside" president who, during a recession, singled a number of double-track main lines and abandoned or sold off others. Today, with traffic boorning, there are costly bottlenecks which can only be cured by reopening and relaying track which will cost much more than would have been incurred by retaining what was elimninated. The lesson is that cost and its cutting must be weighed against the potential future. 2.11 The 1995 Dheerasinghe report on Fares shows Sri Lanka Railway Losses on passenger services. This is summarized in Annex 1. In this all costs are allocated including notional values for cost of capital. 3. Marketing 3.1 Marketing is usually considered to embrace the four Ps, namely Product, Price, Proximity and Promotion. The last P includes scanning the market and the future. In the case of railways, marketing in its broadest sense must deal with:- (a) Attracting patronage (passengers and goods); (b) Pricing and Timing to improve yield; (c) Lobbying Government (the political and administrative communities); (d) Wooing the public not only as customers but as tax-payers and acquiesces (if not supporters of railway development); (e) Manipulating the media to induce it to fashion favorable public opinion; 60 (f) Educating the workforce at all levels on the technological advantages of railways and about the yield value of good public relations. 3.2 Scanning the future is what the cost-cutting outsider (from the banking profession) President of BN did not do. He did not foresee, although it was just around the corner, a traffic boom in such stable commodities as coal and grain, and the new trend in containers. Likewise during the deep recession, London Transport cut back trains, de-staffed stations and put new line development on the back burner, hence cannot cope with passenger demand as the resumption of economic and employment growth in London gathers pace. 3.3 And likewise, sadly, the Sri Lanka Railway has in the past, withdrawn important physical facilities (under pressure no doubt from high authorities), the loss of which has impaired (or will impair) potential revenue earning opportunities. These withdrawals include: (a) The Orugodawatte Curve; (b) The Pettah (Kehelwate) Railway Lands; and (c) The Katunayake Airport connection. 3.4 The Orugodawatte curve enabled trains to proceed direct from the main lines (Puttalam, Northern and Upcountry) into Colombo Harbour. The track was lifted during the last great war, but until recently the embankment remained unused. But a few years ago the railway land was given to Kollonnawa Pradheshiya Sabba for a housing scheme. Hence any railway attempt to re-instate the harbour link will need first to relocate 200 families. The railway authorities who allowed this link to lie disconnected, and later accepted the alienation for housing are to be blamed for lack of forward vision and for not protesting vigorously and publicly about the alienation. 3.5 The railway possessed extensive land adjoining Olcott Mawatha all the way from near Technical College to the Fort Station. This land was used for freight rain marshaling. It surrounded the canal basins used earlier for transloading goods from train to harbour barges. Although goods traffic declined drastically and the rail track deteriorated by non- use, this land was ideally located to divert suburban trains in order to provide an additional station between Kehelwatte and Bo Tree Junctions. This would have especially boosted passenger traffic by its proximity to Olcott Mawatha. However the railway had no forward vision, no marketing foresight, and meekly surrendered the land for Bastian Mawatha. It must also be pointed out that the railway (together with the harbour) was a substantial contributor in the development of wholesale trade and enhancement of value of land in Pettah. Did it at least receive compensation for the land surrendered? 3.6 At Katunayake the railway line extended right up to the location of the present departure air terminal building. Yet at the very time when cities all over the world were projecting new railway links into and under airport terminals, the SLR allowed the line to be cut back to Baseline Road Junction under a plan developed by Dutch Consultants whose own Schipol airport has a railway station underneath. The consultants and the airport authority claimed (and still claim) that air travelers do not use public transport, 61 road or rail. They seem unable to realize that nobody can or will use non-existent o badly located and publicized public transport. Once again the railway lacked either foresight to see the potential or the courage to protest. 3.7 There are dozens of other examples of unpromoted railway facilities, especially those that would have off-peak attraction. The worst example is the station-in-hiding at Fort Secretariat. It could provide the easiest way for travel from Forth to Maradana, Borella, Slave Island, Bambalapitiya, etc., but it is hidden behind the expanding temple and unserved by any train except a few peak runs. 3.8 In the case of goods, the railway taciturnly accepted the migration of tea from rail to road. It made no audible attempt during the years the government owned and operated the tea estates to get it back. With the advent of containers SLR could have entered into joint venture with leading trucking firmns to put containers on trains in Bandarawella, Hatton, Navalapitiya, Matale, etc. The stock argument about pilferage, damage and transshipment do not justify the railway's failure to reap in this market, with trains running at night when the tracks are not congested. 3.9 To return for a moment to costing, the fixed overheads and infrastructure costs of the railway could be spread over more travel and carriage if railway marketing would have captured more off-peak traffic. The yield from such traffic would be one source of funding rehabilitation. 4. Public Transport Inte2ration 4.1 The total integration of urban public transport was set in motion by Hamburg when it formed the HVV (Hamburger Verkehrs Verbund or Hamburg Transport Federation) in the mid-1 960s. It was a federation of several public transport undertakings including:- (a) German Federal Railways; (b) City Underground and Elevated Railway; (c) Two private suburban railways; and (d) City bus services. 4.2 Although the operators owned and ran their own vehicles, HVV presented a single face to the public with common run-through fares and closely linked interchange points. This encouraged what is called seamless journeys and resulted in increased patronage. 4.3 The concept spread throughout Germany and Switzerland and came to Britain later in the form of PTEs (Public Transport Executives) which were agencies of the metropolitan governments of seven large cities and their hinterlands. These PTEs dictated to British Rail the time tables in these areas and promoted railway interchange to bus or metro. Here too increased patronage was achieved. 62 4.4 In Lanka, because of visible overcrowding of trains, there has been no perceived need to increase patronage by such means. However, both railway and buses have lost considerable market share to charter vans, motorcycles and, to a less extent, cars. There is also scope to attract passengers into off-peak and reverse peak trains. This needs more (and regular, reliable) trains and better access. However access has deteriorated in recent years with no protest by SLR. Some examples follow. 4.5 Bambalapitiya: The distributor/feeder bus services to Torrington, Borella, Battaramulla, etc. used to ply to/from a terminal adjacent to Bambalapitiya station. This encouraged travelers to use train to Bambalapitiya and continue by bus. Of a sudden Bambalapitiya Station Road was closed to buses, and train passengers had the weary task of walking up Station Road, cross Galle Road, along the narrowed footwalk alongside Mayfair and Lyon House, across Bullers Road and on to the bus-stop, with vice versa in the opposite direction. Bus interests protested to no avail. (The Railway, however, not only refrained from protesting, but before the change had actually requested buses to move away from the station court yard). The result is to encourage travelers from places like Moratuwa, Panadura etc. who have to walk to get to those stations in the first place, to take the easier path of traveling the whole way by bus. Only severe traffic congestion has reversed the train desertion rate. 4.6 The "Fort" railway station had, at one time, a sequence of bus-stops under its canopy. Buses took train passengers the final half-mile into Fort, giving revenue to buses and convenience to train customer, thereby encouraging them to do the main trip by train. Yet it is the railway which asked for these bus-stops to be shifted out. Later long-distance private buses terminated in the Fort Railway Station Courtyard. Buses ran about 6 trips per hour to the south, train about 6 per day. SLR thought that "their" passengers were abstracted. The fact is that the high frequency bus service attracted all far-southbound travelers to the station courtyard and if a train was announced on PA, the moved over from bus stand to train. 4.7 At Maradana, the Zahira bus-stop was suppressed by the Police in interest of "traffic". This made bus/train interchange more inconvenient and SLR lost marginal business. Yet the Railway made no protest in the interest of its patrons. 4.8 These cases illustrate the railway's apathy towards public transport integration with consequent loss of seamless journeys and discouragement to all travelers by public transport in favor of charter van and motor cycle. 63 5. Image Building 5.1 In USA and Britain where there were several railways and Canada where there were two main ones, image was an important ingredient of public relations. Image building promoted thousands of school boys who developed loyalty to this railway or that. School boy loyalty matured into the rail fan community of USA and the rail enthusiast in Britain. In those countries and in Europe a copious literature proliferated with thousands of books and hundreds of video films produced. 5.2 Some railways resent this trend, especially trespassing on railway property to take photographs, but other railways are happy because:- (a) School boys and enthusiasts become regular customers; and (b) A degree of enthusiasm is transmitted to some of the decision-makers. 5.3 The last point is important, especially in countries where public transport travelers are a dwindling minority. The politicians, administrators and advisers infected with enthusiasm ensure at least that a good hearing is given in their domain for the railway cause. This in turn gains some funding from government sources and occasional sanction for fare adjustments deemed necessary. 5.4 In Lanka, there has been no discernible school boy enthusiasm, no rail fans and no literature, nor has SLR tried to cultivate such trends, perhaps because of the stodgy ways of the colonial government which built walls around both railways and harbour. 5.5 In today's context of crowded shabby trains and very unglamorous stations, it would not be easy to promote such trends. However there is a small model railway society which might become a nucleus in better future days to nurture some enthusiasts and enthusiasm for railways, which could at least marginally induce improvement in the quality of service and increased ridership. 6. Joint Development 6.1 Most large Indian Railway Stations have many vendor-tenants whose rent contributes to the cost of maintaining and operating the station. Most Hong Kong Mass Transit Railway (MTR) stations were financed by selling or leasing the air-rights above the station. 6.2 In Japan, the private railways are themselves developers of land adjoining their railway lines. They consider railway transport, shopping and office complexes above key stations, and residential estates and leisure parks as a total human settlement system. Whether revenue (and profits) come from train passengers or tenants is immaterial so long as the total system generates a satisfactory return on the investment. 64 6.3 In USA, high-risk entrepreneurs were enticed to build railways across cowboy land to the West Coast by land grants of one square mile for every mile of railroad. They sold, or developed or retained the land for later exploitation according to their insights after the trains enabled hum transit and settlement. 6.4 In recent time, joint development is becoming more popular. Where a railway owns adjacent land, often disused goods yards, it invites a developer to join in a company which will clear and develop the land, provide suitable access roads and sell lease or rent shops, officers and homes so developed. The yield from such joint ventures can be sufficient to reffirbish a station, or finance the running of branch trains, or, in favorable circumstances, to construct a new line. 6.5 There are plenty of opportunities for such joint development in Lanka. The following three are discussed briefly: (a) Kurunegala; (b) Anuradhapura; and (c) Ambalangoda 6.6 KURUNEGALA: Daily there are approximately 5,000 passengers departing by bus towards Colombo, but only 250 by train. This represents a meager 5% market share. This is due partly to paucity of trains, and partly because the station is in the wrong place, 2 km from town centre along the Kandy Road, and down a side lane. Moreover the station building and platform are on the wrong side of the track. On the town side of the track is the little-used goodshed, a substantial bare yard and some railway quarters. There is scope to transfer the platform and buildings to the goodshed vicinity and develop the yard with shops and a small bus stand for a local bus service across town centre to Yantanpalawa. The railway could enter into a joint enterprise for this purpose with UDA and, if necessary, a private developer. Later a branch line could be built (from a point one km or so south) into the town, passing behind Madiulwewa Girls School. A station could be provided adjacent to the market. This too might be fundable by a joint development. The railway benefit would be a share of income from the development and a huge increase in passenger market share. 6.7 ANURADHAPURA: The new "Navanagara" station was built in the wrong place in recent years. The new bus station is about 800m meters to the North. There is good empty land between the bus station and the rail track. The bus station is better sited in relation to shops and other facilities. The station could be shifted to a position behind the bus station. The land in between would then be ripe for lucrative development. Here too UDA could be asked to promote a joint development, the proceeds of which could more than pay for the station relocation. The railway would also attract more riders apart from improving the quality of service. 65 6.8 AMBALANGODA: There is already a development funded by the ADB for a bigger bus station an adjacent shopping complex. The shop rents will enable the Urban Council to repay the ADB loan. NTC helped the UC, ADB and UDA to include in the project an archway linking train and bus stations. A train ticket selling booth and 3 boutiques could be established inside the archway. The SLR contribution to this was to be a small sliver of land. SLR would reap boutique rents and, hopefully, enhanced rail patronage attracted by the convenience of interchange with buses to/from the interior. It might even capture some passengers bound towards Galle and Colombo if the Archway portal displayed the expected time of departure of the next trains to these destinations. However the railway jibbed at joining the venture pending persistent persuasion. This stemmed from a lack of understanding of passenger behavior patterns. 6.9 In Colombo there are many locations when SLR has extensive land close to stations, most of which could be jointly developed, instead of giving away valuable land for competing road schemes like Bastian Mawatha, or for an incompatible bank building which blocks the potentially attractive entrance on the Lake House side of Fort Station. This entrance, if developed appropriately, could serve the growth area of Fort which is spreading down Sir Chittampalam Gardinar Mawatha. 6.10 The point about joint development is that, like good marketing, it can help fund railway rehabilitation and, as well induce extra patronage. 7. Externalities 7.1 The railway's claim to be environment-friendly rests not on positive contribution to the environment, but on the negative ground of occasioning less harm to the environment then all other modes of transport except pedal bicycles and walking. 7.2 The comparative advantage of the railway lies in two ingredients of environment- friendliness viz.: (a) Less pollution; and (b) Less congestion in urban areas. 7.3 This paper is not the appropriate channel for a chemical analysis of the emission from vehicles propelled by engines burning fossil fuels. However it is generally accepted that the lesser rolling resistance to movement of steel wheels on steel rails enables a railway to expend from a quarter to half the energy per ton-mile of freight than trucks on the highway. Gaseous and particulate emissions are roughly proportionate to energy. In the transport of passengers, rail and bus are in the same environment-friendly league, and both are very much more efficient, measured by passenger-km per liter of fuel or kilocalory of energy than cars. Moreover the railway has the advantage that emissions are confined to the railway right-of-way, whereas buses and cars emit their harmful gases and particulates in busy streets. 66 7.4 In the matter of congestion, railways carry their passengers economically in space terms on comparatively narrow rights-of-way, and can be underground if need be. Buses too use road space sparingly, but if measured in dynamic square meters per passenger carried are less economic than trains although must more efficient than cars. The value of urban railways when carrying substantial loads of people is seen not only in more efficient use of scarce urban space, but in postponing, if not averting, the need for new road construction. 7.5 The actual or estimated social cost saved by railways in urban settings is the subject of intense research overseas and could be estimated at twice the cost of railway fuel for congestion relief, and one tenth of the cost of railway fuel for pollution. 7.6 If railways are electrified they do not use significantly less energy. But if thermal energy is used, the generation and the emissions can be filtered, and if hydro/energy is used emissions are largely eliminated. 8. Funding 8.1 Railways throughout the world complain that in assessing viability a level playing field is not provided for comparison with highway viability. This applies equally to new projects such as railway extensions and the Southern Highway and to operational benefit/cost evaluations. (It is also relevant for railway electrification). The present playing field is basically unfair as follows: (a) RAILWAYS - All costs of projects are charged to the railway upfront, and interest charged year by year even if there is no loan involved. Thus annual costing of train operation bears interest as well as depreciation charges. Performance is then assessed on actual income against expenditure including the above capital charges; and (b) HIGHWAYS - Vehicles operating on the highway do not pay anything up front for their use of the highway, do not pay directly for wear, tear and maintenance of the highway, and do not pay for the congestion they cause. 8.2 Use of highways is supposed to be covered by taxation of users, but tax gathering is such that in most countries heavy trucks underpay and cars overpay for road wear and damage, which related to the 4th power of weight carried on vehicle axles. On the other hand, cars, with average capacity of 1.5 persons do not pay for the congestion they cause by virtue of the excessive space they take up per passenger carried. 67 8.3 In most countries part of the capital operating cost of urban and other passenger railways is paid for out of general or dedicated taxation. For example: (a) In Paris all employers of 8 or more persons pay a payroll tax direct to the Passenger Transport Authority which runs the metro trains, trams and buses; (b) In Atlanta, local citizens pay a sales tax which is dedicated to MARTA, the train and bus operator. MARTA used this to pay capital and interest on the loans taken to build the Atlanta Underground Railway and to subsidize operating costs of trains and buses. Passengers are expected to pay only 25% of the cost of operation. Meanwhile the loans were secured by hypothecation of the tax; and (c) AMTRAK is the US Federal Government's passenger railway which runs all the long distance trains. From its inception it has depended on an annual grant from Congress ranging from $505 million to $800 million. From now on it will receive the proceeds of a special dedicated levy of a half-cent per gallon of petrol. 8.4 Appropriate taxes imposed on heavy trucks for roads and pavement damage would help to level out the competition between highway and railway for freight. 8.5 Appropriate charges on low occupancy vehicles, mainly cars and vans would provide dedicated support for public transport, especially railways. In Sri Lanka the following tax sources are readily available: (a) PETROL - A surcharge of Rs 10 per litre, increasing the price to Rs 50, would yield over a billion rupees, net of elasticity effect, and would at the same time inhibit some car journeys, so relieving congestion to some extent; and (b) PARKING - At 2 cars per perch, parking slots in Fort are worth Rs 1 million on-street or on bare land. A mere 12% yield on this value would need a parking charge of Rs 50 per hour, but the existing municipal charge is only Rs 2. A surcharge of Rs 48 for an on-street parking, a top- up charge on off-street parking and a tax on private non-residential (PNR) parking would both inhibit car use (significantly reducing congestion) and provide funds for public transport. This could include the funding of new rail stations and improved access to existing train stations. 8.6 This paper is looking at sources of funds, but it is pertinent to quote from a commentary (in Local Transport Today of 20 June 1996) on the British Government's 68 recently initiated program of research to achieve a better insight into the relationship between car use and availability of off-street parking:- "Restrictions on private non-residential (PNR) parking are increasingly regarded as the most palatable and effective means of discouraging car use in congested town centres". 8.7 Dedicated taxes on petrol and parking discussed above have the twin objectives of raising funds for public transport, including railways, and relieving congestion and air pollution. But single purpose taxes dedicated to railways with or without buses and trains as additional beneficiary should also be considered. In this connection funding for AMTRAK, the US Federal Government owned passenger railway may be examined. As mentioned earlier, every year from 1971 until now, AMTRAK has secured congress support for both capital and current needs. This has ranged from yearly $500 to 1,000 million. Just now AMTRAK is electrifying to line from New Haven, Connecticut to Boston with government money. Furthermore, Congress is debating a motion to enact a half cent (worth Rs 28) AMTRAK support tax on gasoline sales, proposed by two prominent Republicans. 8.8 There are many other cases discussed earlier of special tax support for urban railways, including Atlanta (a general sales tax), Paris (a payroll tax called "versement transport"), Germany (general taxation), etc. 8.9 Thus there are three tax options: (a) Dual purpose dedicated taxes; (b) Single purpose taxes on consumer goods; and (c) Taxes hypothecated to bonds raised for capital projects. 8.10 In addition there is straight government financing as has been the Sri Lanka practice for 50 years or more. In this connection there has been much confusion over funding for suburban railway electrification. One overview report has suggested Rs 10 billion to cover electrification to Kurunegala, Kochchikade, Kottawa and Kalutara, comprising Rs 6.7 billion for trains and Rs 3.3 billion for infrastructure. 8.11 It has been argued that passenger revenue will be unable in the near future to pay a return or such an investment whether provided by Government, International lender or BDO/BOT investor. However government presently reimburses railway losses on suburban passengers t the extent of approx Rs 1 billion per annum. If electrification can reduce this annual loss (by a combination of cost reduction and traffic generation), by an initial Rs 200 million, the saving will represent a 2% return. By adding the value of externalities (in similar manner to the way private time saving is added in highway proposals) the return may be considered adequate. The BOO/BOT entrepreneur would 69 meanwhile include his return in a bid to require only Rs 800 million annually from government. 8.12 In sum, funding the railways can come from the following:- (a) Dedicated taxes; (b) Joint development; (c) Technology related cost reduction; and (d) Increased traffic revenue arising from positive marketing, better image and integration with buses. 9. Conclusions 9.1 As a preliminary step towards securing the funding sources identified above, some reorganization of the SLR is essential. This may apply, too, to the railways of many other countries, both developing an developed. There should be two stages in the reorganization of SLR namely: (a) Changes within the present railway department; and (b) Transformation to an autonomous institution. 9.2 In the short-term the Railway should recruit professionals and set up units to support them in the following areas: (a) Environment; (b) Economics; (c) Overall Transport Planning; (d) Urban Planning; (e) Property Management; (f) Marketing; and (g) Public Relations. 9.3 The Railway should also engage in more formal and informal discussions with other transport operators and regulatory authorities. These actions will help the railway to broaden its outlook and to acquire the capability of lobbying its cause among political, administrative and media communities and to its customers and the general public. 9.4 The next step would be to establish the Sri Lanka Railway Corporation or Authority. To establish this statutory railway it will be necessary to convince the railway trade unions that they will be generally better off in an institution which operates at arms length from Government. However, it must be recognized that such entities established in Lanka from the 1950s onward in all sectors have never achieved the autonomy inferred by the term "arms length". On the contrary, the political community has found it easier to manipulate such bodies than government departments, while the administrative community has not relaxed its reins over spending, recruitment, promotion, etc. 70 9.5 Assuming that a statutory railway is established, a subsidiary institution may be needed in regard to urban public transport integration. Government has already accepted a report which recommends the establishment of a Metropolitan Bus Company which will absorb about 16 peoplised bus companies in the Greater Colombo area. Whether integration with railway services and interface at stations should be achieved by a liaison committee or by forming a separate Greater Colombo Mass Transport Undertaking embracing trains and buses needs examination. The latter might pay trackage fees for running it strains on SLR tracks, or might take over the track and charge trackage fees for SLR trains (freight and long distance passengers) running over the suburban tracks. 9.6 Given these reorganizations, the Railway or Railways would seek funding from the following sources identified in section 8 above: (a) Dedicated Taxes; (b) Joint Development, (c) Trackage Fees; and (d) Enhanced Patronage 71 11. Economic, Social, and Environmental Demands on Transport: Past Performance and Emerging Challenges Dheerasinghe, K.G.D.D. and D.S. Jayaweera A. Introduction Objectives. The purpose of this paper is to: (a) understand the economic, social, and environmental factors which influence transport activity; (b) quantify their relationships with the transport sector; (c) analyze these relationships in conjuction with transport policies in the past; (d) examine to what extent these relationships were recognized in formulating transport policies in the past; (e) understand the significance of economic, social, and environmental factors in influencing transport policies especially with regard to allocation of resources within the transport sector and between the transport sector and other sectors of the economy, as well as to examine how overall social welfare can be improved by means of transport while satisfying efficiency criteria; and (f) bring the main issues to light to make some observations. Definition. It is important that we have a clear definition of the transport sector. For the purpose of this paper the transport sector includes all transport services, organizations, infrastructure, and vehicles relating to all modes of transport and the maintenance, operation, and management of these activities, as well as sectoral and national policies. Any evaluation should therefore, recognize the linkages between different activities in the total system. Any single activity considered in isolation would tend to draw misleading conclusions. A particular transport activity e.g., railway, private bus operators, etc cannot be considered separately, but with regard to the inter-relationships between different activities within the transport sector. B. Past Performance Sri Lanka has a well endowed and extensive system of transport infrastructure (see Fugire 1). However, the performance of this system and its accompanying services has not been up to international benchmarks, presenting major bottlenecks to economic growth. B.1. The Road System Road Infrastructure. The road system in Sri Lanka is the most extensive mode comprising 94,209 km, including 10,974 km of national and 14,916 km of provincial roads as shown in Table 1. All class "A" roads and 99% of class "B" roads are paved. The expansion of the road network during the last two decades was limited to 201 km in the Kotte Sri Jayawardanapura Development area and the Mahaweli Development area. Only 20% of the national roads (2150 km) of class "A" and "B" has been rehabilitated during the last 14 years. The available data shows that the average roughness level of provincial roads has been about 9.8 II (International Roughness Index), which is a very bad state. Table 1 indicates that in relation to the condition of other national roads the provincial roads 72 require improvement. The average daily traffic on these roads is almost close to those of the "B" class national roads. Motorization. The total active fleet of the road was 1,030,103 including motor cycles. The total number of other vehicles without motor cycles was 541,383 in 1995 (see Table 2). The past growth of the diesel vehicle fleet has slowed down as a result of the diesel tax introduced in 1995. However, the growth of the dual purpose vehicle has not changed. It should be noted that only 200,000 vehicles were in the active fleet in 1982 and it rapidly increased to 550,000 in 1995. The growth of trucks and dual purpose vehicles was very specific in this decade, in addition to the motor cycles and tri-cycles as shown in Table 2. The growth in per capita GDP was higher than vehicle ownership until 1988 after which the growth in vehicle ownership has surpassed per capita GDP growth. The growth of motor cycle ownership was very much higher than per capita GDP. The reasons for these high growth rates in auto owmership are the rising incomes which have led to increased demand for private means of travel, generous import and tax structures for private vehicles, and the declining condition of services in public transit. Public and Private Bus Services. The active bus fleet of the country provided by the public and private sector has not grown as fast as road passenger service demand. Table 3 indicates that between 1982 and 1995, there has not been much growth in the total bus fleet, which was 15,114 in 1982 and reduced to 15,906 in 1995. However, there has been a shift from public to private buses as the private buses grew from 9,500 in 1982 to 12,815 in 1995. Part of this switch was due to the increase in the luxury and semi-luxury service fleet. Among the reasons for the increase in the use of private buses is the inefficiency in the provision of bus services by public bus companies. The privately operated fleet has much lower operating costs than the publicly operated ones. Until 1992, the private sector was able to break even in the bus industry. Since there were very infrequent tariff increases, these services have become unprofitable since 1993, when operating costs exceeded the revenues in Rs per km (see Table 3). The public bus systems (and now the peoplized companies) have not been able to break even during the last 14 years. As a result of past tariff structures, the private sector has not been able to develop and public sector services are fast deteriorating. Each time the services require improvement, the capital has to come from public funds. Passenger Services. Total passenger km has increased from 31 billion in 1982 to 50 billion in 1995. Passenger demand for transport in the domestic market, whose growth has outstripped GDP growth, is met by road and rail modes. The railway share of the market has reduced from 12% in 1982 to 7% in 1995. The growth of passenger demand met by the road services is shown in Tables 4 and 5. The bus fleet, as mentioned above, has not increased in capacity during the same period, resulting in overcrowded buses. Since 1979, road passenger transport services have been provided by the public and private sectors in competition. In 1991, following peoplization, only 50% of the assets of the formely public companies remain in the hands of the public sector. However, the Government still finances fleet expansion and provides subsidies for the non-economic 73 routes, which are mostly serviced by the peoplized companies. Auctioning of non- economic routes was introduced in 1992, but the progress has been very slow. Freight Services. In general, growth in freight volumes has been very close to GDP growth (see Table 6). The total freight volume in tonne km tripled from 1,032 in 1982 to 3,579 in 1995. The market shareof the railways which was 21% in 1982 reduced to 4.1% in 1995 (see Table 7). The freight market is highly dependent on the road sector, whose share increased from 79% in 1982 to 95.9% in 1995. Coastal shipping handles a very small share mainly to the north (1.2% in 1994). One notable feature of freight transport is that it is dominated by the private sector. The public sector had its own fleet, but it has been reduced due to underutilization and relatively high overheead costs. Containerization is a new phenomena in freight transportation in the intemational market. This has an impact on the domestic freight transport flows both in tonnage and tonne kms. In 1995, there were 5.2 million tonne km of containerized cargo transported in Sri Lanka. Shippers choose road over rail despite the rail tariff being much lower than the charges by road (see Table 8). The disadvantage the railway has is that it has to link with the road system to provide door to door services. At present, the systems of intermodal connection are very poorly developed. The railway carries only one container a month. The direct economic cost by roads is Rs 1.65 per tonne km, a value that is lower than that by rail which is Rs. 1.95 per tonne km. The reason for the high cost by rail is partly due to the extremely deteriorated system of track and rolling stock as discussed below. B.2. Rail System Rail Infrastructure. The railway system with 1,453 km of rail tracks was constructed in Sri Lanka during the period 1858 to 1993. This comprised of 8 broad gauge lines of 1,394 km and one narrow gauge line (Kelani Valley) of 60 km. The Mihintale line of 15 km in length was constructed in 1992 and a section of the Kelani Valley line was broad gauged in 1994. The current status of the railway can be seen in Table 9. The railway infrastructure has not changed significantly since 1928 apart from the newly constructed Mihintale line. The condition of the railways however, has deteriorated somewhat over the last 27 years and there are many speed restrictions. Nevertheless, the railway is maintained in an operating condition with the rolling stock and signalling systems available. Diesel locomotives for broad gauge tracks have been reduced from 66 in 1981 to 18 in 1995. Steam locomotives have reduced from 17 in 1981 to 4 in 1995. Available wagons have reduced from 2,867 to 676, and bogies from 1,021 to 715 during the same period (see Table 10). In general, analysis shows that the assets of the railways deteriorated as the financial losses increased. B.3. Inland Waterways 74 The canal system was available to haul freight along the west coast of Sri Lanka before the railway was built. This system combines constructed canals with natural lakes, lagoons, and river estuaries, and runs from Kalutara in the south via Colombo to Puttalam in the north, a distance of about 170 km. The Colombo-Kalutara canal is no longer continuos having been filled in places to pemit the construction of permanent buildings. In Colombo, the Beira lake, St. Sebastian canal and the Kelani Ganga present opportunities for bypassing the congested roads leading to the port. The waterways are used much less now than in the past, as a result there are not many prospects for this system of transport. B.4. Ports and Shipping The ports of Sri Lanka are rather important for transport analysis since they serve as access points for intemational freight and as terminals for domestic coastal shipping. The present activities are in three key ports (excluding Jaffha), mainly: Colombo, Galle, and Trincomalee. Clearly the port of Colombo dominates in terms of intemational trade in the Sri Lanka transport system, and also caters to transshipment traffic with its modem container terminals and storage areas. Galle plays an important role as a regional port and can be developed to handle transshipment cargo. Trincomalee is the best natural deep water harbour of the island. This port plays a significant role for flour imports. The other ports are mainly small fishing ports. Talaimannar also serves in normal times as a ferry port for the 30 km link to India across the Palk Strait and is the largest fishing port. This port has not been in operation during the last 14 years. C. Economic Role of Transport Transport, Communication and Storage services have provided 10.1% of Gross Domestic Production (GDP) in 1994. In the same year, transport also has secured significant shares of private consumption expenditure (6.1%), Government expenditure (9.9%), household expenditure (6.1%), and Gross Fixed Capital Formation (17.8%). Access to Transport. According to surveys (CFS 1986/87) approximately 6% of household expenditure is on transport. Only about 1% of the population (4.1% of households) own cars. When the ownership of all private vehicles including vans, dual purpose vehicles, motor cycles, etc are taken into account, 4.3% of the population (19.3% of households) have access to private transport (Report of the Committee on Transport Fares, 1995). More urban households and a much lower proportion of rural households have access to private transport. However, at the same time, users of public transport are mostly from the urban sector, while people in low income rural and estate sector households are only marginal users of public transport. 75 Determinants of Travel. Ideally, in an aggregate demand model we would include such variables as population, employment, and income as main determinants of the demand for transport. Further, in a modal choice model, factors such as cost, speed (generalized cost) and quality aspects e.g., safety, convenience, and flexibility are regarded as main determinants. However, for the purposes of this analysis we concentrate on establishing the relationships between transport and some macroeconomic variables. Data from published sources were used to establish relationships between population, income, and employment with demand for transport. The data other than for passenger kilometerage of private transport, which were estimated by the Transport Studies and Planning Centre, were obtained from the Central Bank and Department of Census and Statistics. The purpose of the analysis is not to fix a formal model of demand for transport, but to understand the broad relationships between transport and important socio-economic variables. Income Elasticities. With respect to income, a positive income elasticity of 0.9 (R-squared 0.97) with respect to passenger kilometers of travel was observed, indicating that transport is a normal good. The positive value also indicates that most users are at low income levels at present, and growth in household income will cause more demand for travel. This phenomenon is typically observed in developing countries contrary to what may be observed in a high income developed country. However, high income households show negative income elasticities with respect to travel by public transport, further supporting the argument that they shift to the use of private means of travel such as the car or motor cycle. Population,Employment. and Transport. A linear regression of population growth against passenger kilometers of travel showed that a 1% increase in population results in 0.84% increase in demand for transport (R-squared 0.97). In the case of employment, a 1% increase in employment results in a 0.01% increase in the demand for transport. Although a positive relationship was found between employment and demand for travel, these results are not very robust as data on private sector employment are underestimated. Furthermore, no time series data on the informal private sector are available. Price Elasticities. Public transport is highly price inelastic mainly because of lack of choice. Negative cross price elasticities between these modes indicate that they provide complementary services rather than substitute services. Estimated Price Elasticities Mode Price Elasticity Peoplized Bus -0.08 Private Bus -0.07 Rail -0.04 D. Factors Determining Transport Policy in Sri Lanka 76 The economic performance of the transport sector described so far is dependent on the policies set in the past. In most instances, decisions in the past have been made on the basis of perception of the transport sector as a merit good. As a result, transport policies have been set with equity rather than efficiency objectives. However, in a number of important aspects relating to both costs and benefits of transport, there is a reason to believe that this perception is defective. Such defects have led to an imbalance in the priorities set in the sector. Transport as a Merit Good Transport policies in the past, and even at present, to a large extent manifest the concept of transport as a merit good. In Sri Lanka, transport is considered as a service the consumption of which is deemed to be intrinsically desirable. This idea also stems from the notion that transport is a vital component of economic infrastructure and if higher prices are charged, users will not demand the services in sufficient quantities. Hence, this policy inspired heavy public transport subsidies and low tariffs. Emphasis on Equity Rather than Efficiency. In general, there are two distinct components of transport policy: (a) the resource allocation or efficiency objective; and (b) the income distribution or equity objective. At the extreme case of the efficiency objective we would witness a situation of pareto optimality, i.e., a situation where no one can be made better off without making someone else worseoff. In suboptimal situations, decisions can be made to improve overall social welfare without making anyone worse off. If the ultimate objective of the equity criterion is achieved, all members of society would enjoy equal shares of income and wealth. In suboptimal situations of equity distributional inequalities are prevalent in the society. By surveying recent history of transport in Sri Lanka, particularly since independence, evidence suggests that, the successive Governments in Sri Lanka have laid emphasis more on equity considerations rather than efficiency considerations. Among the significant policy measures taken in the past manifesting equity objectives are: (a) nationalization of bus companies in 1958; (b) maintaining passenger fares at a low level and provision of subsidies to public transport; and (c) low or zero tax rates for public transport as compared to higher taxes for private transport and many other sectors of the economy. Efficiency considerations, on the other hand, have received low emphasis in the transport policies in the past. The exception has been public passenger transport, where the following measures have been taken to introduce market forces and private ownership and management'2: (a) introduction of the private omnibus service in 1979 to operate in 12 It has been argued that efficiency inducing measures have not been successful in achieving the desired objectives, which were mainly, financial viability of the peoplized bus services and efficient and reliable bus services overall. The reasons for the failure, can largely be attributed to: (a) lapses in implementation; (b) inadequate emphasis on certain important aspects of the measures taken such as safety and operation of non-economic services; (c) management deficiencies in the peoplized bus services; and (d) lack of regulatory measures and ineffective implementation of available regulatory measures. For more details on this see the paper by M. C. Premaratne on "What to Do About Peoplized Companies" later on in this volume. 77 competition with the former publicly owned bus company which had monopoly in provision of bus services; and (b) peoplization of the state owned bus service in 1990, where 50% of the shares of publicly owned bus companies were transferred to former employees free of charge. Mis-Targeted Subsidies. It has been recognized that the provision of public transport at a price lower than its cost is a suitable and desirable step in a continuing pursuit of income distribution, though support in the strict economic sense, for the provision of subsidized transport services as a means of general income distribution is fairly limited. Transport policy and legislation in Sri Lanka have been concerned with protecting the interests of low income groups of society. However, the benefits of public transport subsidies have been enjoyed by the great majority of people in the country irrespective of their income levels because the subsidy was not well targeted. The subsidy would have served its purpose better had it been targeted to smaller segments of society whose claims for special protection could be justified from the rigors of the market. Subsidies have been maintained in very distortionary ways. In Sri Lanka, both rail and road passenger transport have traditionally been organized in such a way that services in these areas have been maintained despite their profitability. This has been possible through manipulations such as higher taxes on private transport and other sectors to generate funds to provide subsidies. In 1991, the Government generated close to Rs. 11 billion (US$ 220 mnillion) from road transport related taxes while total expenditure on this sector was Rs. 8 billion (US$ 160 million) in that year (Road User Charges Study, 1992). Thus the Government has generated a surplus of close to Rs. 3 billion (US$ 60 million) to finance the expenditures relating to other sectors such as railways. The presence of such cross-subsidies have delayed the restructuring of the railroad which is currently running high operational deficits. E. Economic Consequences of Present Policies The public patronage of passenger transport was about 85% in the late 1970's. This proportion has gradually reduced to about 60% at present. This shift from public to private has been a result of deteriorating public transport services on the one hand and increased ownership of private motor vehicles on the other. The increased use of charter vehicles particularly for commuter travel is also a factor responsible for this development. The low fares policy has resulted in lower real costs of transport as compared to other goods and services. The low real cost to the consumer means low opportunity cost. Furthermore, by producing a service for which the consumers are not willing to pay the full cost, we are by the consumers' own indication, failing to get the best out of the resources so used. By setting the right price (price equal to actual resource cost), the optimum allocation of resources can be achieved. Public enterprises providing transport services such as the railway have witnessed escalating operating deficits as a result of these policies, further straining the public 78 recurrent budget. Furthermore, due to shortages in the recurrent budget, needed maintenance and rehabilitationa activities have been postponed, further decapitalizing the assets of these enterprises, all leading to ever burgeoning capital investment needs. Meanwhile, important investments in capacity expansion, modernization, and upgrading of transport systems and services have not been met. F. Social and Environmental Consequences of Current Policies Transport is widely regarded as a vital component of economic infrastructure of a country. However, there are social and environmental factors that have to be recognized in the provision of transport services. Transport policies in the past have ignored the effects of externalities caused by transport due to other considerations, such as equity, being recognized as more significant. Environmental impact of transport is associated with negative externalities which can be discussed commonly in terms of noise, vibration, fumes and visual intrusion. It may be noted that no significant steps have been taken to address the issues associated with the above. Land Use Policies. Distorted transport fares have resulted in a dispersed location of economic activities. Location decisions in the past have taken place without any regard to transport cost. At one stage, the idea of maintaining low transport fares to encourage people to find urban housing in places far away from Colombo (as a solution to the housing problem) received considerable acceptance. As a result of low fares, workers did not have muh regard to travel cost and they continued to put pressure on authorities to maintain low bus and rail fares rather than any other factor affecting the cost of living. Thus, low fares have resulted in a much greater demand than would have been demanded had there been a higher fare, equal to the actual resource cost of supplying the service. This situation in addition to the excess demand, has caused the quality of service to remain low. The level of congestion and air pollution caused by this policy, not to mention the land use decisions accompanying such a policy have further contributed to social and environmental costs. Congestion and Accidents. Higher demand for travel has had an impact on congestion and accidents. Traffic congestion in the urban areas and traffic corridors of the inner area of the City of Colombo has increased by 38% during the last five years. Trip generation due to land use changes in the Colombo Metropolitan Region (CMR) and in urban centers such as Kandy, Kurunagela, Galle, Kegalle, and Ratnapura has created a considerable amount of congestion as indicated in recent studies. The TSPC has estimated the costs of congestion in Colombo City to be Rs. 356 million (US$ 7 million) in 1995 having increased from Rs 252 million (US$ 5 million) in 1992. Accident costs at the national level have been estimated at Rs. 42 billion (US$ 0.8 billion) in 1995 having increased from Rs. 31.2 billion (US$ 0.6 billion) in 1990. Energy Use. The transport sector is one of the main consumers of petroleum products in the country. The total amount of auto diesel consumed by inland transport modes was 401 thousand metric tonnes in 1982. This figure nearly doubled to 717 thousand metric 79 tonnes in 1995 (see Table 11). The rapid increase in the diesel fleet of the road sector since 1990 has contributed to the higher consumption of energy. In particular, the pricing policy of the Government and the structure of subsidies across vehicle types have contributed to the existing situation. Diesel has replaced petrol consumption, as there has been no increase in the amount of petrol consumed by the road sector since 1990, compared to an increase in the consumption of diesel. Emissions. Base line data on emissions from different types of vehicles are not available for Sri Lanka, as there is insufficient research in this direction. The TSPC estimated the emissions of the transport sector using the vehicle fleet and other variables in countries similar to Sri Lanka (India and Thailand). This estimate was made on the basis of vehicle kilometers of travel and fuel consumed by vehicles. The first estimate was available for 1991 and updated for 1996. Emission levels have dramatically increased during this period (see Table 12). There has been a threefold increase in the annual carbon monoxide emissions and a ten fold increase of diesel particulate during the last five years. Harmful toxic gases such as CO, Nox, and HC have also increased during this period. Among the contributing factors are: (a) increase in the diesel fleet during the last five years due to the pricing and tax structure of fuels which favors diesel use; (b) slow progress in introducing unleaded petrol into the country; (c) urban congestion which has grown partly due to the lack of land use policy and poor traffic management practices; (d) poor road conditions which create travel delays forcing car engines to idle for long periods of time; and (e) lack of vehicle inspection and testing centers to enforce compliance with emission standards. It is important to incorporate environmental considerations within growth strategies, especially with regard to transport, which is the main cause of negative environmental effects. Growth models in developed countries show that these countries have reached high levels of economic development while preserving their environment. However, many of these countries have had to rely on expensive solutions such as electric trains, subway systems, and cleaner fuels (low sulfur and lead content). Sri Lanka's per capita income was US$ 715 in 1995 (CBSL Annual report, 1995). It will be difficult for the country to rely on expensive measures such as these to meet growth and environmental objectives. Measures need to be taken now to improve the efficiency of public transport, and hence reduce the reliance on the automobile and its consequent contribution to environmental degradation. 80 G. Emerging Challenges for the Transport Sector There are a number of emerging challenges facing the Government in the transport sector, which are discussed below. Common to all these challenges are: (a) need for a well defined policy framework and strategy; (b) political leadership to identify priorities and push for reform; (c) institutional reforms to implement the policies; and (d) investments in substantial magnitudes from both the public and private sectors. Resource Mobilization for Financing of Transport Sector Investments It has been pointed out in many previous studies (more recently by Halcrow Fox in the 1996 Colombo Urban Transport Study) that the investment in the transport sector is grossly inadequate. Depending on different growth scenarios, investment needs in the defined study area alone (Greater Colombo) would vary from a low of Rs. 55.5 billion (US$ 1.1 billion) to a high of Rs. 91 billion (US$ 1.8 billion) for the next 20 years. Actual investments and estimated funds available fall very much below this desired level. These figures can be taken as crude indicators to visualize the investment outlook for the whole of the transport sector in the absence of any macro data. Public Expenditures in Transport. It is difficult to ascertain actual Government investment in transport from available information because transport activities are included in many Government expenditure items in terms of both Treasury and economic (Central Bank) classifications. Our estimate of Government expenditure on transport was about Rs. 16.5 billion (US$ 330 million) in 1995. Approximately Rs. 5 billion (US$ 100 million) of this amount has been recurrent expenditure and actual capital investment has been in the range of Rs. 11.5 billion (US$ 230 million). No data is available on private investment in the transport sector. Our estimate is that actual capital investment by both the public and private sectors has been about 40% of the desired investment in the sector (a base case scenario). The total Government capital expenditure in 1995 amounted to Rs. 96.6 billion (US$ 193 million) and that of the transport sector at Rs. 11.5 billion (US$ 330 million) was about 12% of this amount. The scope for increasing Governement capital expenditure in transport is very limited due to the high opportunity cost and other budgetary constraints. The outstanding Government debt (1995) at Rs. 632 billion (US$ 12.2 billion) is more than 95% of GDP. Domestic Government Borrowing. Total outstanding Government domestic debt amounted to Rs. 286 billion (US$ 5.7 billion) at the end of 1995 and this was an increase of 15% over that of previous years. A further increasee of borrowing to finance the Government expenditure will put the Government budget under severe strain. In addition to debt redemption, interest payments amount to a sizeable proportion of Government expenditure due to high domestic interest rates that range from 14% to 20%. Foreign Borrowing. Total outstanding foreign debt of the Government amounted to Rs. 346 billion (US$ 7 billion) at the end of 1995 and this was an increase of 14% as 81 compared to that of last year (partly due to exchange rate fluctuations). Transport sector investments involve a high proportion of foreign cost and the availability of foreign funding has a significant bearing on transport sector investment. The availability of foreign funding will be limited and according to recent information, Sri Lanka's balance of payments suffered a deficit in 1995 after surpluses experienced for five consecutive years since 1990, mainly due to a sharp fall in capital inflows. Alternative Sources of Finance. Crucial questions in light of the discussions above include: (a) whether it is possible to raise investment of the magnitude needed in the transport sector; (b) what sources of funding are available; (c) under what conditions would investment be encouraged; (d) what role could the private sector play; (e) is it possible for the Government to provide these funds if the policy is not to involve the private sector or if private sector funds are not forthcoming; (f3 what kind of incentive structure will have to be in place to induce private investment; (g) in what areas is private investment desirable and feasible; and (h) what are the trade offs for the private sector and the state sector in different investment scenarios. Potential for Private Investment. The potential for private investment has to be considered in conjunction with the size of private investment in the economy, particularly in relation to the size of the stock market as well as direct private investment and the privatization program. In addition to the overall issues raised so far, the Government will need to deal with a number of specific issues which are discussed below. Infrastructure. There are a number of emerging challenges for the transport sector which relate to the provision of infrastructure. Lack of infrastructure such as roads, bridges, terminal facilities, railway track, signalling systems and facilities, as well as port and airport facilities do not provide adequate impetus for rapid economic growth. Inappropriate use of infrastructure, e.g., ineffective and inefficient traffic management methods, inadequate use of parking facilities, interruptions to movement of traffic, and closure of certain roads for security and other purpose further aggravate the situation. There has also not been sufficient investment on expansion and development of infrastructure. Government investment is grossly insufficient and little private sector investment seems to be forthcoming in this sector. Among the major infrastructure challenges is the need to encourage private sector investment in infrastructure by way of toll roads, bridges, public car parks etc., may be on BOT, BOO and FDBM basis. Bus and Rail Services. The Government faces a number of challenges in the area of bus and rail services. There is a need to arrest the gradual deterioration of bus and rail services, both in terms of quality and quantity. The government will need to find ways to cope with growing demand. It may not be possible to meet future demand if a solution is not found to deal with the growing pressures for subsidies on public transport. The Government will need to find ways and means of making public transport provision attractive for private investment. Among the key issues that need to be resolved are the 82 management problems of public transport undertakings, such as the railway and peoplized bus services. Issues relating to private omnibus service such as organizational structure, non-compliance with regulatory requirements, and poor service quality also need resolution. Other challenges include putting in place effective regulatory measures to improve the conduct and outcome of service provision. To alleviate traffic congestion and its ensuing impacts on the environment, it may be necessary to look at the feasibility of mass transit railway systems. In particular, the role of the railway in such a system, and the potential for electrification would need to be considered. However, a major issue to be dealt with is with regard to private ownership and management of such transit services and the reforms needed in the railway and bus systems to move forward with a privatization program in bus and rail services. Freight Transport. Among the issues that need to be dealt with in the area of freight are: (a) removing physical constraints to freight movement and their adverse effects on commodity prices; (b) resolving freight transport issues relating to investment promotion zones; and (c) introducing measures to make the railway more competitive with road, and improving intermodal connectivity including warehousing, loading and unloading costs. Urban Transport. First and foremost there is a need for an urban transport policy to deal with all the issues raised earlier such as land use planning and traffic management. In particular, there is a need to ensure that such a policy includes adequate provisions for coordination among existing transport modes. A more pressing issue relates to the problem of urban traffic congestion and the need to find solutions in the short run while the policy is being developed. Shipping and Aviation. In the area of aviation, it is important to include planning for domestic air transport as part of the overall planning in the tourist industry. Also important is the need to coordinate traffic that generates or terminates at airports and ports, so that the impact on hinterland transport systems can be controlled. Institutional reforms are needed in the areas of international air and shipping, as part of the open economy policy followed by the country. Key to these reforms is progress in the ongoing privatization program for state owned enterprises in the sector. Another area that needs to be dealt with is the proper inclusion of the costs and benefits of internal waterways and coastal shipping as alternatives to road, rail, and air freight transport. H. Conclusions Transport policies in the past have put heavy emphasis on welfare aspects and equity considerations were given more importance than efficiency considerations. While the provision of transport has been recognized as vital economic infrastructure, transport has been considered a merit good, that everyone deserves. All these perceptions have resulted in a policy towards the transport sector that has had serious implications on the performance of the sector and its ability to support economic activity. 83 A subsidized tariff structure has been maintained with the welfare objective in mind. This has been at the expense of poor quality of services, as the transport providers have been unable to recover costs, deferring maintenance and needed rehabilitation to meet demand for day to day operations. Institutional reforms to introduce market forces and private ownership have been a failure, because of inadequacies in implementation. Current issues in the sector are related to policies regarding ownership, management and operational aspects. The extent of state intervention and private sector participation need to be clearly defined. Issues regarding investment will form a major challenge for policy making. Scope for enhanced public investment is limited. Domestic capital markets are insignificant as compared to resource requirements of the sector. Private foreign investment is a potential source of funds provided the right policies and incentives are in place. I. References 1 . Bosworth, Barry. P. (1984), Tax Incentives and Economic Growth, The Brookings Institutions, Washington D.C. 2. Baumol, W.J. and E.O. Wallace (1979), Economics, Environmental Policy and the Quality of Life, Englewoods Cliffs, NJ: Prentice Hall. 3. Central Bank of Sri Lanka, Report of the Consumers Finances and Socio- Economic Survey 1986/87, Sri Lanka. 4. .........................................., Annual Reports (for several years) 1974-1995, Colombo Sri Lanka 5. Dheerasinghe, K.G.D.D. (1993), "Economic Issues of Public Transport", Sri Lanka Economic Association, Colombo Sri Lanka. 6. ...................................... (1994), "Issues and Objectives of National Transport Policy", in Essays in Honor of A.D. V De S. Indraratne, Vidyalankara Press, Colombo Sri Lanka. 7. ........................I ............ (1994), "Economic and Social Considerations of Bus and Rail Fares Revisions", Sri Lanka Economic Journal Vol. 9 No. 1, Colombo Sri Lanka. 8. ...................................... (1996), "Transport and the Economy", in Economic Review Vol. 21 No. 11, People's Bank Colombo, Sri Lanka. 9. .......................I....... ...... (1991), Bottlenecks in Colombo Transport System-- Solutions Through Better Infrastructure and Pricing Policies, NARESA, Colombo Sri Lanka. 10. Department of Environment (1977) HMSO, "Transport Policy", Consultation Document, Vol. 1 & Vol. 2, London. 11. International Monetary Fund and the World Bank, Finance and Development, (Several issues of quarterly publications) Washington D.C 12. International Monetary Fund (1986), International Capital Markets, Washington D.C. 84 13. Kelegama, Saman (1993), "Privatization in Sri Lanka--The Experience During the Early Years of Implementation", Sri Lanka Economic Association, Colombo Sri Lanka. 14. Ministry of Transport (1986), "Sri Lanka Transport Sector Planning Study", Colombo Sri Lanka. 15. ................................. (1992), "Sri Lanka Road User Charges Study", TSPC, Colombo Sri Lanka. 16. Ministry of Transport, Environment, and Women's Affairs (1995), "Progress Report", 1995-1996, Colombo Sri Lanka. 17. ................................. (1995), "Policy and Action Plan 1995-1996", Colombo Sri Lanka. 18. ................................. (1995), "Report of the Committee on Transport Fares", Colombo Sri Lanka. 19. ................................. (1996), "Colombo Urban Transport STudy", (Halcrow Fox Study) Colombo Sri Lanka. 20. Ministry of Finance and Planning, "Public Investment", (Several Issues), Colombo Sri Lanka. 21. Public Enterprises, Reform Commission of Sri Lanka, "Privatization: What it Means to You", PERC, Colombo Sri Lanka. 22. Savas, E.S. (1989) "Privatization, The Key to Netetr Government", Tata, McGraw-Hill Publishing Co. Ltd. New Delhi. 23. Thomson, A.Wj. and L.C. Hunter (1973), "The Nationalized Transport Industries", Heinemann Educational Books, London. 24. Tanzi, Vito (1985), "Fiscal Management and External Debt Problems" in External Debt Management, edited by Hassanali Mohran, International Monetary Fund, Washington D.C. 25. Wanasinghe, Shelton (1991), "Issues in Privatization in Sri Lanka", Marga Institute, Colombo Sri Lanka. 85 Table 1: Road Condition in Sri Lanka Category Length Average Average Average (KM) Daily Roughness Width (m) Traffic (IRI) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (A D T ) Class A National Road (RDA) 4,117 4,300 5.1 7.2 Class B National Road (RDA) 6,332 1,345 6.5 6.0 Class C&D Provincial Council 14,916 950 9.8 5.1 Municipal Council 1,289 1255 6.0 Urban Council 1,498 350 _ _ _4.5 Predashi Saba 49,689 3.8 Other (Irrigation, Forest, Wild Life, Estate) 16,357 . 3.7 Source: Pavement Management Study (ADB) 1991, Road Condition Survey, 1993 by Danish Directorate & Traffic and Planning Division RDA. 86 Table 2: Active Vehicle Population Petrol Stock of Vehicles Diesel Stock of Vehicles Year Car < 7 Taxi Pickup Mini Trucks Motor Tri Ambul. Cars/ Med Mini Pickup 4WD Heavy Trucks Land Ambul! Total Total w/o Seat bus cycle cycle /Hears Light Bus Bus Bus Veh Hearse MB Veh. 1974 45271 4,163 2204 63 638 745 111 90 386 3845 12680 70,144 69,506 1975 44542 4150, 1992 96 984 932 136 211 594 3864 12651 88,011 87,027 1976 44789 4198 1933 128 1631 1165 174 312 914 3956 12760 90,348 88,717 1977 45775 4279 3149 161 2710 122 1456 208 453 1407 4551 13189 96,740 94,030 1978 49547 4406 4335 322 7243 443 1820 287 567 1758 4776 15816 112,582 105,340 1979 55562 5177 5537 1240 11580 640 2000 1896 1127 2198 5210 19657 136,848 125,268 1980 56992 6233 6866 1622 42095 1596 3722 1901 1205 444 2442 5658 26033 188,897 146,802 1981 59009 6399 9021 1768 56433 1743 5105 3054 1279 2497 2714 5464 30304 226,194 169,760 1982 61547 6860 11199 1790 64077 1895 5865 3578 1290 4869 2887 5787 31877 253,846 189,770 1983 64947 7216 11620 22941 74769 3290 6546 4019 1396 7965 3071 6066 34761 284,113 209,343 1984 67717 7380 12531 2378 88973 3830 7537 4455 1704 11643 3267 6145 39131 320,516 231,543 1985 72000 7444 13000 2400 108500 4071 8037 5500 2400 15000 5000 6000 43400 366,634 258,134 1986 72745 8028 14089 2325 134008 4716 8286 6747 3332 16923 7628 5954 43169 413,287 279,279 1987 73977 8242 14565 2218 159029 5982 8699 7387 4312 18694 7519 5741 42585 450,990 291,961 1988 69677 7895 14975 2214 182095 7253 8904 8092 4960 20240 8232 5699 41624 476,518 294,423 1989 72452 7611 14865 2007 243328 8019 9482 9156 5152 21863 8077 5389 40721 29512 43 575,428 332,100 1990 79760 8202 15056 1918 320452 9365 321 9608 9772 6050 25358 7937 5210 40210 32259 58 700,753 380,479 1991 84943 8746 15241 2412 325099 10679 323 10522 10855 8577 45906 10724 5039 39740 35376 109 750,753 425,654 1992 80574 8243 17083 2269 403197 12882 326 12853 13262 10479 47661 10016 4787 39308 37024 241 867,054 463,857 1993 78694 7827 16576 2140 445035 13532 332 13952 14750 10490 54215 9750 5013 40974 36736 243 925,890 480,855 1994 83509 7265 15275 2012 33 468475 14920 333 15454 16897 10209 60717 9822 5456 42749 36706 275 976,233 507,758 1995 92802 6786 14089 1893 173 488630 16670 336 15715 16749 9841 67590 10565 6045 46332 37199 302 1,030,013 541,383 Source: TSPC consultant's Estimates based on Transport Sector Study, 1986 and RUC study 1992, and data from Department of Motor Traffic, and Ceylon Petroleum Corporation. Notes totals include other categories that are not listed in the table. 87 Table 3: Bus Fleet Growth By Sector and Cost and Fare Structure Bus Fleet Cost per km Fare per km Year Public Private Public Private Average 1982 5,614 9,500 0.20 0.17 0.20 1983 5,541 13,300 0.22 0.18 0.33 1984 5,062 13,700 0.21 0.18 0.33 1985 4,880 14,060 0.22 0.18 0.33 1986 4,750 13,970 0.23 0.19 0.33 1987 4,676 13,434 0.27 0.23 0.33 1988 4,407 12,423 0.34 0.26 0.33 1989 3,888 11,564 0.37 0.28 0.33 1990 3,428 12,567 0.43 0.31 0.38 1991 3,370 13,454 0.47 0.36 0.38 1992 3,654 12,720 0.51 0.38 0.38 1993 3,709 11,453 0.52 0.41 0.38 1994 4,207 10,699 0.53 0.42 0.38 1995 3,867 12,815 0.54 0.43 0.38 Source: SLCTB, RTBS, NTC, SLR, and DPOT 88 Table 4: Passenger Demand and GDP (Constant 1982 Rupees) Passenger km in millions Year GDP Total Rail Public Bus Private Bus Car/Van 1982 94,679 38,605 3,121 18,720 9,500 7,263 1983 98,466 40,104 2,447 16,884 13,300 7,473 1984 104,395 39,149 2,280 15,613 13,700 7,556 1985 109,570 39,163 2,101 15,249 14,060 7,753 1986 116,144 41,098 1,972 15,149 15,669 8,308 1987 117,886 42,983 2,059 15,924 16,053 8,947 1988 121,069 45,382 1,859 15,413 18,012 10,098 1989 121,729 47,278 1,734 12,980 21,515 11,050 1990 129,244 50,534 2,781 13,614 22,565 11,574 1991 135,204 50,908 2,654 14,327 23,747 10,181 1992 140,990 55,913 2,613 16,098 26,682 10,519 1993 150,783 56,823 2,822 13,608 29,350 11,044 1994 159,269 60,048 3,202 15,613 29,493 11,740 1995 167,953 63,114 3,404 16,231 31,355 12,124 Source: SLCTB, RTBS, NTC, SLR, and TSPC 89 Table 5: Modal Split in Passenger Transport Passenger km in million Year Total Rail Public Bus Private Bus CarNan 1982 100% 8% 48% 25% 19% 1983 100% 6% 42% 33% 19% 1984 100% 6% 40% 35% 19% 1985 100% 5% 39% 36% 20% 1986 100% 5% 37% 38% 20% 1987 100% 5% 37% 37% 21% 1988 100% 4% 34% 40% 22% 1989 100% 4% 27% 46% 23% 1990 100% 6% 27% 45% 23% 1991 100% 5% 28% 47% 20% 1992 100% 5% 29% 48% 19% 1993 100% 5% 24% 52% 19% 1994 100% 5% 26% 49% 20% 1995 100% 5% 26% 50% 19% Source: Calculated from SLCTB, NTC, SLR, TSPC 90 Table 6: Freight Demand and GDP (Constant 1982 Rupees) Year GDP Total Rail Road 1982 94,679 1,032 217 816 1983 98,466 1,243 224 1,020 1984 104,395 1,310 263 1,047 1985 109,570 1,925 232 1,693 1986 116,144 2,041 204 1,837 1987 117,886 2,071 195 1,876 1988 121,069 2,127 198 1,930 1989 121,729 2,139 171 1,968 1990 129,244 2,271 164 2,107 1991 135,204 3,067 169 2,898 1992 140,990 3,004 177 2,827 1993 150,783 3,213 159 3,054 1994 159,269 3,394 154 3,240 1995 167,953 3,579 148 3,431 91 Table 7: Modal Split in Freight Transport Million Tonne km Year Total Total Rail Road 1982 94,679 100% 21% 79% 1983 98,466 100% 18% 82% 1984 104,395 100% 20% 80% 1985 109,570 100% 12% 88% 1986 116,144 100% 10% 90% 1987 117,886 100% 9.4% 90.6% 1988 121,069 100% 9.3% 90.7% 1989 121,729 100% 8% 92% 1990 129,244 100% 7.2% 92.8% 1991 135,204 100% 5.5% 94.5% 1992 140,990 100% 5.9% 94.1% 1993 150,783 100% 5% 95% 1994 159,269 100% 4.5% 95.5% 1995 167,953 100% 4.1% 95.9% Source: Constructed from data gathered from SLCTB, RTBS, SLR, and TSPC 92 Table 8: Road Rail Tariff Structure 1995 (Rs per Tonne Km) Item Road Tariff Rail Tariff Below Rail Tariff Above Rabu. Rabu. Tea 2.20 0.80 1.20 Rice and Flour 1.95 0.60 0.90 Cement 2.10 0.50 0.90 Fertilize 1.80 0.60 0.90 Consumer Goods 2.80 1.20 1.80 Petroleum 2.60 1.63 2.00 93 Table 9: Status of Railway Track Railway Line Origin-Destination Kms BROAD GAUGE 1. Main Colombo Fort to Badulla 292 2. Matale Peradeniya to Matale 34 3. Puttalarn Ragama to Aruvakkala 149 4. Northern Polgahawela to Kankasanturai 340 5. Talaimannar Madawachchi to Talaimannar Ferry 106 6. Batticaloa Maho to Batticaloa 211 7. Trincomalee Gal Oya to Trincomalee 70 8. Coast Colombo Fort to Dickwella 158 9. Kelani Valley Colombo Fort to Padukka 35 10. Mihintale Anuradhapura to Mihintale 15 Total 1,410 NARROW GAUGE 1. Kelani Valley Padukka to Avissawella 25 The following sections were laid with double line tracks 1. Main Fort to Polgahawela 74 2. Coast Fort to Panadura 26 Total 100 Source: Sri Lanka Railways 94 Table 10: Age Distribution of Locomotives and Rolling Stock Number in 1981 Number in 1993 0-10 10-15 15-20 20-25 25+ Total 0-10 10-15 15-20 20-25 25+ Total LOCOMOTIVES Broad Gauge: Diesel 66 100 6 47 35 254 20 48 33 92 56 249 Steam - - - - 17 17 - - - - 7 7 Narrow gauge: Diesel 3 - - 9 12 - - 3 - - 3 Steam - - - 11 11 22 - - - - 9 9 0-10 10-20 20-30 30+ - Total 0-10 10-15 15-20 20-25 25+- Total CARRIAGES Diesel 505 162 113 451 - 1,231 384 277 453 - 201 1315 Steam - - 13 86 - 99 - - - - - - WAGONS Broad Gauge: 4 Wheel Bogie 5 655 807 1,400 - 2,867 - 4 - 1 671 676 Bogie 146 409 93 373 - 1,021 111 153 74 112 265 715 Narrowi G 193 - - - - - Source: Sri Lanka Railways 95 Table 11: Energy Balance on Inland Transport Thousand Tonnes 1977 l 1987 l 1995 INLAND TRANSPORT TOTAL Auto diesel 230.6 436.2 717.3 Petrol 109.3 137.2 184.0 ROAD TRANSPORT TOTAL Auto diesel | 194.1 | 410.4 | 691.5 Petrol 109.3 137.2 184.0 RAIL TRANSPORT TOTAL Diesel 36.4 25.8 l 25.7 Source: Ceylon Petroleum Corporation and Research of TSPC Table 12: Emissions from Road Vehicles 1992-1996 Emissions in Thousands of Kg Year CO HC NOx SOx Aldehydes PM 1992 107 29 17 7 0.14 0.94 1993 141 35 28 9 0.33 1.68 1994 185 46 44 11 0.79 3.01 1995 244 58 71 13 1.89 5.39 1996 321 74 114 16 4.50 9.66 Source: Calculated by TSPC. Note that CO, Nox, and HC are harmnful and toxic. 96 12. The National Highway Program for Economic and Social Development Fowzie, A.H.M. Chairman, Representatives of the World Bank and the UNDP, Ladies and Gentlemen: I am thankful for the invitation extended to me to open the second day's proceedings and deliver the keynote address at the Workshop to formulate a National Transport Strategy for Sri Lanka. I understand that the main aim of this workshop is to provide a forum for the discussion amongst major donors and Sri Lanka stakeholders on major issues in the Transport Sector to explore options for reforms and improvements in this sector. Today is the 2nd day of this workshop and is devoted to matters pertaining to the Role of Highways in the Economic and Social Development. In tracing the role of Highways in the Econojmic and Social Development of the country, I wish to venture into the past tracing the history of transportation and the roads in Sri Lanka. As we are aware commonest mode of transport universally had been the transport on foot. The privileged few in the past however had resorted to transport utilizing animals, palanquins, etc. Up to this stage of development what was needed was only a footpath. However, when human being realised that this mode of transport was not fast and comfortable enough the result was the coming into existence of the cart on wheels in its simplest form. This in turn triggered them to think of the necessity to have a comparatively undulating continuous surface without steep inclines for these vehicles to be drawn about manually as well as by animals. This thinking in turn gave rise to the roads and bridges in its most primitive form which have been replaced today by Highways and Super Highways with long bridges over rivers, estuaries and tunnels under cross border channels and mountains. Role of Highways in Economic and Social Development as we now in this country, took place to a very great extent with a very considerable positive impact on the economy and social development under the European Rule, and specially during the British Rule of the country, due to the development of the network of roads and the railway. During the British Rule with the opening up of land for growing of coffee, tea, rubber and coconut and the consequent requirement for the transport of this produce to the Port of Colombo, the necessity for the construction of a network of roads and railway came into being. This gave rise to the construction of a major percentage of the network of National Highways, other minor roads and the railway lines both broad gauge and narrow gauge that is in Sri Lanka today. Since then the development that had taken place in the construction of new highway in Sri Lanka up to the present had been minimal although major Economic and Social Developments had taken place. During the above period the increase in the 97 demand for transport due to the development activities had been mainly met by rehabilitation of the existing highways. The Transport System of any country is a National Asset and should be maintained and developed to promote economic development of the country. In Sri Lanka the Transport System consists of 4 transport modes namely Road, Rail, Air and Water transport modes to meet the overall transport demand. However, the contribution of Air and Water transport modes in meeting the overall transport demand is very small. In terms of intercity passenger services about 20% is catered by rail and the balance 80% is provided by road transport. In terms of Freight Transport about 16% is catered by rail, 82% by road and 2% by coastal shipping. Since, the transport system of the country has to provide for the safe and efficient movement of people and goods between their origins and destinations, a National Transport Strategy has to be developed to achieve these objectives at the minimum cost to the country and the road users. In the development of the National Transport Strategy, it is useful to make an assessment of the current transport supply by different modes and the current transport demand for passenger and freight traffic and project this demand for the future and develop strategies to increase the transport supply to meet the future demand. As the Minister of Health, Highways and Social Services in charge of Highways, I am well aware of the rule the Highways play and the impact the developments in this sector has on the Economic and Social Development of Sri Lanka. Road Transport which has many technical as well as economic advantages over Rail Transport accounts for well over 82% of the Passenger transport and over 90% of goods transport in Sri Lanka. The popularity and the acceptance of the Road Transport in the country is such at present, it is expected for this trend to continue well into the 21 st century. The country has a well spread out network of roads of 95,000 km. Out of which about 11,000 km of roads form the National Highway Network which comes within the administrative responsibility of the Road Development Authority under my Ministry. The balance 84,000 km which are mainly rural roads come within the purview of the Provincial Council, Local Authorities and other Departments. Realising the importance of roads which are not National Highways these road and their contribution toward Passenger and Goods Transport, I have directed by Ministry to extend a helping hand to the Provincial Councils and Local Authorities. For this purpose funds required by them for rehabilitation of the roads have been allocated to them and on numerous occasions Rehabilitation and Maintenance of these roads had been undertaken through the Road Development Authority although this exercise is not the responsibility of my Ministry. These roads being all rural roads, satisfactory maintenance of these roads would help to provide much need transport facilities to the rural areas. Since, the road network plays an important role in the economic development of the country, meeting the social aspirations of the people, there is a need for the 98 development of a planned, hierarchical road network suitable for the 21 st century. To achieve this goal, there is a need for a clear road policy which could be followed by the numerous agencies responsible for the maintenance and development of the road network. The Road Network in the country, including bridges and ferry services, should be planned, constructed and developed to: (c) Promote the on-going economic development of the country, by taking into consideration the present and future social-economic development plans of the country, thereby improving the quality of life of the people; (d) Facilitate faster mobility and provide easy accessibility with improved safety for the people; (e) Adequately meet the transport needs of the country, both passenger and freight transport taking into consideration the current and projected future transport demand; and (f) Improve the quality of roads by using cost effective, innovative techniques of design and construction. It is out experience that some of the major Trunk Roads in the Island are so heavily congested due to excessive traffic on these roads and a solution to this problem is urgently needed. As a result several new roads are being proposed to be taken up for construction shortly by my Ministry. New Colombo-Katunayake Highway is one such road as the presently used road from Colombo to Katunayake caters to a traffic volume of about 40,000 vehicles at Colombo end which reduced to about 25,000 vehicles at the Katunayake end. This road which has a carriageway width of 40 feet on which there is indiscriminate parking of vehicles and numerous bus stops all along the road resulting in severe traffic congestions and low operating vehicular travel speeds. To avoid similar problems and to provide a road network that can bypass the City of Colombo, thereby reducing the congestion in the City, the outer Circular Highway has been proposed to be undertaken with private financing on BOO BOT basis at a cost of US$60 million. My Ministry is planning to construct many other new roads on the same basis and one very important road being the Alternate Southern Highway which is expected to develop the Southern hinterland and the Tourist Industry in the South. This project is expected to cost about US$260 million. And to mention a few others, Alternate Highway from Katunayake to Padeniya costing about US$90 million, and Alternate Highway from Colombo to Ambepussa to ease the congestion on the present Colombo Kandy road, etc. are some of the new proposals for which private funding is being sought. In addition, several Flyovers at Dehiwala, at Ragama Railway crossing near Ragama Station, on Kadawata-Welisara Road and at Duplication Road rail crossing at 99 Slave Island, are some of the constructions proposed to ease the congestion and to streamline road transport. I also wish to mention that in addition to what I have already mentioned, Avissawella-Hatton-Nuwara Eliya Road, Section from Hatton to Nuwara Eliya. Ratnapura Beragala Road, Gampola Nuwara Eliya Road, Katugastota Kurunegala Road, Wellawaya Monoragale Road, Haliela Badulla Road, Habarana Trincomalee Road are some of the Trunk roads which are proposed to be improved in the neat future. All these projects too are available for private financing on BOO BOT basis. With the implementation of the projects mentioned I wish to make my contribution for the Economic and the Social Development of Sri Lanka by developing a meaningful road network thus improving the road transport in the country taking into consideration the importance and the popularity of roads for the transport of passengers and goods. I wish the National Transport Planning and Strategy Project, Sri Lanka all success and may all your endeavours bring comfort and happiness to the people of Sri Lanka. 100 13. Traffic Management for Congestion Control and Safety Kumar, A. with contributions from R. Parker Background. It is estimated that average annual cost of congestion in Colombo metropolitan region (CMR) is over Rs 10 billion (US$200 million). The cost of road accidents is estimated to be more than Rs 300 million (US$6 million) annually. The degree of congestion and associated cost is expected to double over the next decade. In addition, estimates indicate that for a 6% increase in GDP, the demand for road space increases by 9% in the Colombo metropolitan region (CMR). Inability to keep pace with growing demand for infrastructural facilities, while at the same time reducing congestion, suggests that there is an urgent need to develop management-intensive rather than capital- intensive approaches. Traffic management achieves this through the planning, design, implementation, maintenance, and monitoring of physical and policy measures which promote efficient and safe flow of passengers, vehicles, and pedestrians. The principal reasons for the growing congestion on the streets of Colombo are: * growth in private vehicle ownership. The registered vehicle population increased three-fold in Sri Lanka over the past decade, from 300,000 in 1980 to 900,000 in 1990, and almost 50 percent of these are registered in the CMR. About 50 percent of these vehicles are two-wheeler and three-wheeler (growing at an average annual rate of 15 percent), 20 percent are cars (growing at an annual rate of 7 percent), 5 percent are buses and the rest are light trucks, lorries and land vehicles. The vehicle population is expected to increase two-fold between 1990 and 2000. Increase in demand for personalized transport without a proportional increase in supply of road infrastructure is contributing to severe congestion and safety problems; 3 incompatible landuse-transport policies. Lack of rational urban development policies in past have resulted in a conflict between available road space and development initiatives. The presence of large traffic generators, for example, near critical transport nodal points such as Bambalapatiya junction and Slave Island have severely congested the road network. Available evidence suggests that for every 1,000 square feet of new commercial road space, an additional 15 trips are generated. Thus a million square feet in the Fort area would generate 15,000 more trips, leading to significant increase in traffic. The cumulative effect of such developments is likely to be much more pronounced along any particular corridor; * growth of mixed traffic. The growth in both motorized and non-motorized modes, including pedestrians, and the unsuitability of much of the infrastructure for mixed traffic, presents conflict within motorized modes (rail, buses, car, 2-wheelers and 3- wheelers) and between motorized and non-motorized modes; * inadequate parkingfacilities. Inadequate parking facilities not only add to street congestion but also reduce incentives to: (a) raise revenues; and (b) modify user behavior. * weak implementation. Implementation is handicapped by weak or nonexistent enforcement and by staff who are inadequately trained to design and maintain systems; 101 * physical design constraints. Poor street layout, inadequate signalized intersections, poorly designed round-abouts, lack of pedestrian side-walks on most roads, poor street lighting, etc. contribute to congestion and poor safety standards; * poor driving behavior andpublic awareness. Lack of driver training and public awareness of traffic rules and poor standard of traffic law enforcement have contributed to driving patterns which lead to congestion and reducing the available road capacity; * encroachment of sidewalks. Prevalence of vendors on sidewalks results in spillover of pedestrians on the main thoroughfare (as in Dehiwela), reduces traffic flow and compromises safety; and * street closure for security reasons. The closure of roads for security reasons over the past few months (Church street in Fort), without developing alternative flow patterns, has further contributed to congestion on available streets. The key issues include lack of organizational capacity in developing and implementing traffic management approaches to congestion and public safety. Coordination between nine central government ministries and provincial government is required to implement traffic management in the CMR. There are four municipalities in the Western Province, each with a different charter and with little coordination among them. One of the primary cause of inadequate traffic management is that it is nobody's responsibility and often the blame for poor planning gets passed around. There are a number of inter-agency committees and working groups, but these function merely as administrative bodies without sufficient representation of technical professionals. In the absence of a clearly defined policy framework, the police department is left to manage all aspects of traffic planning, control, implementation, including measures to improve road safety, for which it is very ill equipped. Recommended Strategy. The recommended approaches in the short-term include: * development of institutional capacity. There was a general consensus on the need to set up a Greater Colombo Metropolitan Transport Authority, with statutory authority and legal powers to plan and design transport management plans for the Colombo metropolitan area. The Authority must have strong Government commitment and adequate resources. For this Authority to be effective, it must have representation from the concerned line agencies, private sector, university professors, NGOs, and other affected community groups. The Authority would need to coordinate mobility of all transport modes, both motorized and non-motorized, including, bus, rail, private vehicles, three-wheeler, bicycle, and pedestrian. The Authority will also need to have a traffic safety cell. * develop technical capacity at the municipal level. Engineering departments in Municipal Councils should be equipped to design, implement, and maintain traffic management schemes. * improvement ofphysicalfacilities. This includes layout of junctions, road markings, sign postings, parking facilities, pedestrian sidewalks and crossings, etc. Sophisticated traffic improvement measures would be of no avail if traffic capacity is limited by poor 102 road surface conditions and blocked drains. Specific measures would include: (a) implementation of a restrictive entry and parking policy for the Fort area. Part of the area should be demarcated as auto-free zone for easy pedestrian access and operating bus services and park and ride facilities; (b) study and implement alternate traffic routing schemes when interruptions have to be made for security considerations; (c) develop a parking policy and provide on-street and off-street parking facilities with public-private partnership; and (d) provision of safe facilities for pedestrians and bicycles, including sidewalks. police training. The traffic cell in the police department should be strengthened to enforce traffic rules with a view to prevent violation of traffic laws, persuade road users to remain within the law, and be able to impose punishment on traffic violators. The recommended approaches in the long-term include: * integrated landuse-transport planning. This includes planning for structure and capacity of the road network and public transport system, evaluating landuse-transport relationships and the balancing of demand with supply. * developing a coordinated transport system. An important impact on traffic congestion and safety results from low standards of bus operations, inadequate inter- modal coordination, conflict between different transport modes including both motorized and nonmotorized modes, encroachment on sidewalks and roads, etc. Measures to coordinate different transport modes should be developed. * auto-rickshaw restrictive policy. Both 2-wheeler and 3-wheeler vehicles are a cause of traffic congestion because of poor driving practices and environmental pollution. At the same time these modes serve an important market. Need to develop appropriate policies to restrict growth of these vehicles. * development of information base. A sentiment expressed during the discussion was that often decisions are taken without adequate empirical basis to support them. A primary objective is to establish a good data base on which to base the identification of critical problems and the setting of priorities for action. * parking policy. The need to develop a parking policy for the city was expressed during the discussions, including strategies to provide for the required parking spaces. * public education. The need to improve public education for better conformity with traffic rules and safety measures was brought out in the discussions. * improving road safety. Measures to improve road safety include: (a) raising awareness level of road safety among policy makers, road users and the general public; (b) developing and implementing road safety audits both for new construction and road rehabilitation and maintenance; (c) improving measures to inspect vehicles to keep dangerous vehicles off the road; (d) training of traffic police and procuring traffic control related equipment; and (e) developing and implementing comprehensive road safety action plans covering all aspects of road safety, including driver testing/training programs, traffic education for school children, road safety legislation, and improving emergency services. 103 14. Urban Structure Planning and Transport Kumar, A. with contributions from W. Mendis and S. Wickremasinghe The Need for Spatial Planning. There was a broad agreement at the workshop on the need for spatial plans that coordinate land use and transportation decisions. Several reasons were put forward: * Land use influences transportation demand while transportation facilities can determine locational plans. The attempt to understand the nature of the relationship inherent in transportation, urban form, and the environment is a great challenge. Analysis can be overwhelmed by the inextricable linkages between them, each shaping, and shaped by, the others. Broadly speaking, transport infrastructure can provide access to new areas, thereby enabling changes in the patterns of land use. Once established, however, land-use patterns largely determine the demand for transport. Since investments in transport related infrastructure often involve considerable resource commitment, which is of a fixed nature, there is a need to careful plan and shape that interaction; * The share of urban population in Sri Lanka is about 30 percent (1994), which is expected to increase to about 50 percent by 2010. CMR is the most developed region in the country, with an estimated population of 4.5 million (1994) and an urban population of 2.2 million, which accounts for about 60 percent of the total urban population in the country. The challenge to cope with the current backlog of unmet demand and at same time accommodate the needs of the future is immense. There needs to be careful planning and efficient allocation of scarce resources, * Pressure for urbanization at the periphery and in the immediate vicinity of Colombo City have led to reclamation of environmentally vulnerable low-lying lands and construction on natural flood plains. The planning efforts in the future have to ensure that the external effects of urban growth be taken into account for development to be environmentally and ecologically sustainable; * With constraints to further growth in the agricultural sector, most of the expanding labor force in the country, in future, will have to be absorbed by the urban areas. Urban Development Strategy. To address urban development needs in future, UDA has outlined three strategies: (a) Concentration Strategy. Intense development of the city of Colombo and dispersed limited development of peripheral areas; (b) Dispersed Strategy. Slowing down of the city and faster development along peripheral areas; and (c) Mixed Strategy. Development of selected activities (commerce and trade) within the city of Colombo and dispersing other activities (administrative and industrial) to outside areas. The UDA has recommended Mixed Strategy to be the most viable strategy, where the commercial, financial, and port related activities are encouraged within the city of Colombo with a simultaneous growth of Urban centers within the region. The location of industries would be predominantly in the Northern sub region, exploring the potential of Katunayake air port. Administrative and defense activities are planned to be shifted to east to and beyond Kotte. The UDA is in the process of preparing plans for other urban areas, such as Galle and Trincomalee. At the national level, there is an inter-ministerial 104 national development council that is to provide overall guidance for the economy. It has not as yet produced a national spatial plan. Transport Strategy. The UDA has proposed a number of new transport infrastructure to support the Mixed Strategy, including: (a) Road Network: (1) Baseline road improvement and extension; (2) Colombo-Katunayake Expressway (CKE); (3) Outer Circular Highway to Colombo; (4) Southern highway from Colombo to Galle and Matara; (5) Marine Drive; (6) Highway to Fatnapura; (7) Highway to Anuradhapura; and (8) Highway to Trincomalee; and (b) Rail Network. The proposal includes extension of railway lines, electrification of suburban railway network, and establishment of railway container yard at Katunayeke. Alternate Views. The proposed spatial plan for CMR by UDA was questioned at the workshop on three grounds: (a) alternatives to the UDA plan were proposed. One such proposal called for five great urban areas: Colombo, one in South, the "triple K" (Kandy and two others nearby towns whose names begin with K), Trincomalee, and the North; (b) the second concern focused on the very idea of concentrating national resources in the Colombo area, resulting in preservation of its primacy. It was argued that the expensive public investments contemplated in UDA's Colombo plan might reduce or forestall public investments in the rest of the country. Concentrating growth in Colombo might be undesirable because regional inequities had already sparked two insurrections in Sri Lanka's history; and (c) the proposed plan calls for unrealistically large investments by the public sector. The Planning Process. While the specifics of the proposed plan for spatial development and related investments in transport infrastructure in Sri Lanka were debated, there was a general consensus that the country has a long history of planning and the immediate need is to coordinate different planning efforts. With a view to undertake planning at a macro level, the Town and Country Planning (T&CP) Ordinance was enacted in 1946, with a view to assist local municipalities in adopting development control measures. The primary objective of development control measures were: (a) securing health, safety, welfare, conveniences, and amenities for the people; (b) increasing efficiency; and (c) maintaining equity. However, rapid urbanization has given rise to several complex urban problems and to deal with new and emerging situations, Urban Development Authority Law of 1978 was enacted and a new institution, the Urban Development Authority (UJDA) was established to carry out development activities in declared urban areas. The UDA was empowered to "promote integrated planning and implementation of economic, social, and physical development of certain areas as may be declared by the Minister to be urban development areas...." (Preamble) Wide powers were given to the UDA to undertake this multi-faceted task. Additional provisions with regard to planning and development were also made by subsequent amendments to the law, especially the enactment in 1982. The law also authorized the Minister to make regulations, and the UDA Planning and Building Regulations 1986 contained in detail the development control measures. A development plan prepared by UDA becomes a legal document once it is approved by the Minister and is published in the Gazette. According to law, the UDA 105 should develop every development area for the better physical and economic utilization of that area. As a check to centralization of power and authority within the UDA, certain functions were decentralized to the Urban Local Authorities (UJLAs) and only problem cases were referred to the UDA for suitable action. However, the functions of the ULAs are subject to the general guidance, supervision, and control of the UDA. In addition, there is the Board of Investment of Sri Lanka (BOI) with the task to attract investment for developmental activities. Other agencies responsible for spatial planning are Special Project Areas and Subsidiary Organizations (Coast Conservation Authority, Central Environment Authority, Low Lying Reclamation Board, Tourist Board, etc). The Road Development Authority (RDA) is responsible for planning for investments in roads and often works in isolation of plans put forward by UDA. Multiplicity of urban planning organizations without any coordination has resulted in inconsistent plans. The different plans, for example, even use different definitions of Colombo metropolitan area. The legal authority to prepare plans is fragmented and ambiguous. There is no formal mechanism to reconcile various key plans, such as prepared by Colombo Urban Transport Study (CUTS), UDA, RDA, although UDA claims it coordinates informally. Planning for different transport modes (bus, rail, private transport) is pursued without any coordination resulting in suboptimal use of scarce resources. The UDA lacks the legal authority to ensure that plans put together by different agencies such as RDA are in a consistent framework. The different plans are also not part of the budget process so that there is no mechanism to ensure that spending priorities are consistent. Strategic Issues. While planning for urban areas and developing efficient transportation plans, following key issues ought to be borne in mind. * First, resources are scarce and getting scarcer. The ability of the Government to finance infrastructural facilities is limited and opportunities for the private sector may be constrained, as discussed in a separate session during this workshop. * Second, the present problems of serving the mobility needs of people within the existing landuse framework are enormous. In the short run, economic units and people will continue to behave pretty much the way they do today. Even in the medium term, controlling the growth of urban areas is fraught with problems, which suggests that caution should be used in attempting to impose any rigid control of land use structure. * Third, master plans to date have not succeeded in controlling overall urban growth in most countries. There is a need, therefore, to recognize and work with the underlying preferences being exhibited in the market. * Fourth, demand for more flexible transport have increased dependence on road transport. This dependence tends to raise aggregate energy consumption, generate air pollution, and have other adverse effects on the environment. In practice, these 106 adverse environmental (and social) impacts are very difficult to reverse once personal lifestyles and the location of activities have been arranged to accommodate a high dependence on specific transport mode. * Fifth, sprawling low-density urban growth is making journey-to-work, especially for low income group, both costly and time consuming. * Sixth, improvements of transport infrastructure often has implications for environment and resettlement, which limits the choice of alternatives. * Seventh, public transport provided cheaply by the informal sector and motorized two- wheelers may meet the transport needs of the low-income and poor but be environmentally damaging. * Eight, the balance between modes should reflect their environmental as well as their economic characteristics. Developing landuse plans which promote use of nonmotorized transport should form an integral part of overall urban transport strategy. * Ninth, transport modes differ in their potential energy efficiency. Because the energy use and emissions of rail transport are usually less than for road transport, an argument can be made to divert road traffic onto rail. However, the potential advantage of rail is limited by some characteristics inherent in rail operations. First, because rail transport has significant fixed costs, the commercial use of rail is restricted. Second, the quality of service is important. In the freight market, the trend towards just-in-time logistics systems emphasizes the importance of those attributes, such as flexibility, for which road transport has advantage over rail. In the passenger market, the importance that commuters attach to travel time, comfort, convenience, reliability, and flexibility increases as their income rises. The actual achievement of the potential energy savings and environmental benefits of rail transport thus depend on the existence of a market- proven superiority of the rail mode in meeting customer demand. To invest in railways that do not attract traffic is not only uneconomic but environmentally of limited value. Strategy for Future. It is clear that all these issues are not easy to be successfilly addressed in a comprehensive manner. The foremost requirement is to put in place an institutional capacity to deal with different issues at an economywide level. Responsibility for urban planning and transport lies with numerous agencies, and successful implementation of their efforts requires coordination. Another justification for the need of an overall planning authority is that the city has outstripped its historical boundaries and has spread over adjoining areas. Decisions and activities with metropolitan, rather than strictly local, consequences need to be taken by a metropolitan body, with strong representation from constituent local authorities. The argument is for the creation of planning capability at the national and metropolitan levels, to ensure that the plans are economically, financially, environmentally, and socially sustainable. 107 * At the national level, a suggestion was to strengthen the National Development Council, with representation from the diverse interests in the society, including the private sector, with the overall responsibility to plan, program, and set standards for overall national planning. * At the metropolitan level, it was proposed to create a Metropolitan Colombo Transport PlanningAuthority (to be replicated by similar bodies in other provinces), to address strategic transport issues which are well integrated with fiuture urban growth patterns. 108 15. Implementation of Clean Air 2000 Action Plan Kumar, A. with contributions from Perera, R. and S. Pilapitiya Background. World Health Organization data shows that twelve of the fifteen cities with the highest level of particulate matter and six of the fifteen cities with the highest levels of sulfur dioxide in the world are in Asia. The immediate and long term implications for the health and quality of life of the inhabitants of these cities are manifested in increased morbidity and mortality rates, lower productivity of the labor force, deterioration of physical capital and infrastructure, and the loss of amenity and ecological values. The sources and severity of air pollution vary. They depend on a city's economic base, income levels, and topographic and meteorological conditions. Sri Lanka's air pollution problem appears to be currently at manageable levels. Yet based on projected rates of economic, demographic, and vehicular growth, the air pollution situation in Colombo could come to resemble that of more severely affected Asian metropolises. The main culprit--accounting for more than 75 percent of pollutants emitted into the air--is the transport sector and its expanding vehicle fleet running on fuels high on lead and sulfur content. The principal environmental concerns relate to: * poor combustion performance of vehicle engines; - a three-fold increase in vehicle population between 1980 and 1990 (from 300,000 in 1980 to 900,000 in 1990, of which 50% are registered in the Colombo Metropolitan area), which are further expected to double by year 2000; - vehicle emissions discharge pollutants directly to the external air in restricted corridors, giving rise to high concentration along those corridors; and - mobile sources of emissions are currently uncontrolled. Sri Lanka has limited experience in air quality monitoring and management. To address this gap, the UNDP-funded, World Bank-executed Metropolitan Environmental Improvement Program (MEIP) began work in Colombo in 1990 along with four other metropolitan areas in Asia. MEIP's mission is to assist Asian urban areas tackle their rapidly growing environmental problems. In 1992, MEIP-Colombo conducted a short course on Air Quality Management. The Short Course was a training forum for Sri Lanka to take advantage of ideas, experiences, and technology shared by specialists from different countries. The outcome of the Short Course was a draft proposal for Clean Air 2000--An Action Plan for Air Quality Management in the Colombo Metropolitan Area. Objectives. The objective of the Clean Air 2000 Action Plan (CA2PP) was to reduce air pollutants in the Colombo Metropolitan Region by year 2000. Based on a review of the available air quality data, the Action Plan concluded that by year 2000, following reductions in ambient levels should be achieved: carbon monoxide 40%, oxides of nitrogen 30%, lead 30%, oxides of sulfur 75%, and hydrocarbons 20%. To reach the targets, 50 actions were recommended, classified under seven major categories: 109 (a) vehicle inspection and maintenance (b) fuel reformulation, pricing, and fleet mix (c) emission inventory and monitoring (d) standard setting (e) institutional framework and regulatory compliance (f) economic instruments (g) transportation planning and traffic management Endorsement and Implementation. The final draft of CA2AP was submitted to the National Environmental Steering Committee (NESC), which is an interagency committee chaired by the Secretary to the Ministry of Policy Planning and Implementation. The Comrmittee was in unanimous agreement that the action plan was necessary and timely. Following CA2AP endorsement by NESC in 1992, the Action Plan was submitted to the Cabinet of Ministers in February 1993 and was endorsed by the Cabinet, declaring this as the Government's policy on air quality management. A National Task Force was appointed, under the Chairmanship of the Secretary to the then Ministry of Environment and Parliamentary Affairs, to implement the Action Plan. It comprised members from all agencies involved in the implementation of the Plan. Over the past three years, the Committee has held monthly meetings (holding 30 meetings). However, only 4 of the original 50 actions have been implemented fully. Lack of action on other issues relate to: inadequate funds, lack of institutional capacity, and lack of infrastructural facilities. The general feeling is that over the past three years since the preparation of the Action Plan, the original flavor of the document has been lost. The Committee, during its monthly meetings, looks mechanically at the minutes of the previous meeting and merely passes it onto the next meeting with little positive action. Options for the Future. It was generally agreed that the Action Plan is a useful document. However, for expedient implementation of the Plan, there is a need to: * critically reassess actions identified in the Plan * update the plan * reexamine priorities and identify a new list of priorities * limit the Plan to do-able objectives, eliminating the rest * set a timeframe to realize the Actions. There was active discussion at the end of the presentation with most participants agreeing that this was a classic case of the Government appointing a high level Committee to implement the program, without any statutory powers or funds to implement the Plan. The broad recommendations of the group were: 110 (a) revitalize the goals and aspirations of the original document; (b) actions which could be pursued by the private sector should be encouraged; (c) examine the possibility of the Greater Colombo Metropolitan Transport Authority, proposed to be set up during earlier sessions, to be responsible for overall evaluation, programming, and standard setting. 111 16. Access and Mobility in Rural Areas Perera, L. Transport facilities in the rural areas have for a long time been planned without the active participation of rural communities. Villagers who are the main users of rural transport have had little opportunity to provide information on rural transport issues, or to be actively involved in planning, implementing or maintaining rural transport facilities. This has had two main consequences: 1) Transport strategies that take into account the problems of urban people have been applied to the rural sector as well. This has increased dependency on buses as the main solution to most transport problems, regardless of its appropriateness in addressing rural issues. 2) Communities have become passive recipients, and feel that improving transport facilities is beyond their control. They tend to look to the government as the main provider of facilities. The above two mentioned reasons have limited the understanding of the nature of rural travel needs and options that can be developed to serve rural communities better. The nature of rural travel needs These can be categorized into four areas: * Domestic travel (travel related to domestic activities) * Agriculture-related travel (or travel related to other income generation activities). * Social and cultural travel * Long distance travel Domestic travel This is in connection with travel related to the provision of daily needs of the family, for instance, collection of water for drinking and cooking, firewood, food, milk and other provisions from the market. In rural areas, especially in the dry zone,13 people have to collect water for cooking and drinking, from a considerable distance. Usually water is collected from common wells, canals, or reservoirs. In a few areas pipe borne water is provided. But tube wells, or water pipes at roadsides are extremely few and far from homes, often compelling people to walk the same distance as they would, to reach a reservoir. 13 Approximately 40,000 of the country's 65,610 square kilometers belong to the dry zone. 112 Rural women are mainly responsible for collecting water. In the dry zone women have to walk an average of two to four kilometers per trip to collect water. They spend about six hours a day for this task. In the extremely dry season14, this situation worsens, forcing women and children to walk as much as six kilometers to a source of water. Firewood is the main fuel that is used in rural households. Collecting the necessary supply from nearby shrub forests or coconut/tea estates is also considered a women's task. It takes three people, often the mother and two children, about three hours to collect a week's supply of firewood for an average family"5. Paddy and other grains make up a large portion of a rural family's diet. These are rnilled at the village mill, which is, on average, bout three kilometers away. Usually this is carried on head by women or taken on bicycles by men. Travel to the nearest local town is a main activity of rural people. Provisions for the family is bought from the closest towns, on the market day. This may be once or twice a week. Local markets are about 3 kilo meters away. Apart from this, villagers buy some of their daily household needs from the village boutiques. These include, bread, vegetable, kerosene etc. Domestic travel chart of a week, of a rural women in the dry zone16 Purpose of Distance Time Spent No of trips Total time Total time travel kilometers on a single day spent for a for a week trip day l ____________ ____________ Hours Hours Hours Collect Water 2 - 4 3 2 6 42 Collect 2 1 one trip per 1 1 firewood week Go to the Mill 3 3 1 3 3 Local Market 2 - 4 3 1 3 3 TOTAL 49 A woman in the dry zone spends 49 hours per week on domestic travel. i.e. she spends an average of 7 hours per day on travel related to domestic needs. 14 The extremely dry season is from April to September 15 An average village family will consist of 3/4 children, parents and an elder 16 These calculations are based on average figures for each activity, of an average family. 113 Agricultural related travel This paper concentrates on the travel related to agricultural activities since a majority of the rural communities live by farming. Other income generating activities have similar travel patterns. Agriculture forms the foundation of rural life. Based on this is a host of travel needs. Farms (chenas/paddy fields) are often 2-3 kilometers away from the homes. Because of this carrying agricultural tools, fertilizer to the field, and transporting the harvest home from the fields calls for time, energy and money. Agricultural tools and fertilizer are either carried on the head or taken by bicycles. During the soil preparation period and harvest time, quite a number of tools have to be taken to the field. It may require about two or three trips to the field, or the help of two or three people. Small quantities of harvest are also transported similarly, while large quantities are carried by tractor trailers or bullock carts. If farmers do not own such a facility (very few do) a fare has to be paid for this. Visiting the fields in the evenings to check on the water levels or to prevent damages from animals. Traders/middlemen visiting the fields to buy the harvest, is also common. But in this instance, the price the farmers get is low. However, there is no direct pattern of transporting harvest and usually it is an activity that demands a lot of money and time from the farmer families. Since the farms are about two miles from the homes, this adds to the distance from the village to the market. Therefore, the distance the harvest has to be transported to be sold, increases to about five miles. Social and cultural travel Social visits such as attending weddings, funerals, travel related to religious programmes and activities and travel connected to voluntary community development work are considered here. Generally these are short distance travel and vary according to personal preferences and commitments. (Personal and social related travel that covers long distances, are discussed later). Access to services Of these, the travel needs that mostly affect the lives of rural communities are those in connection with access to medical facilities and education. Other services important to people are markets, banks, government offices and extension services. Education facilities - The schools that exist in the village interiors, within a distance of about three to four kilometers, often have inadequate facilities or are limited to primary classes. Students who wish to attend schools with better facilities must travel to the towns, about 10 - 20 km, daily. Of this, 2-3 km have to be walked, at which point they can reach a bus route. Usually a trip to a school in the town or the return trip takes about two and a half hour. This, other than taking up a considerable amount of studying 114 time of the children, also deprives them from fully participation in extra curricular activities. Medicalfacilities - Rural communities usually go to the village native physicians or to the closest dispensary in an illness to which home remedies do not answer. Nowadays it is more common to visit the dispensary that may be at a distance of 3-5 km. These are privately owned dispensaries, and are found only in very few village areas. Usually people have to travel to towns (about 5-7 km) for this. Travelling this distance causes severe problems, especially in the night. Visiting hospitals, under unsatisfactory transport conditions, is an acute problem the rural communities have to face very often. The distance to a hospital is approximately seven to ten kilometers. Long distance travel Travel which involves distances over 20 km are considered here. Visits to the capital or other towns for medical consultations, and other needs, pilgrimages, or personal visits come under this. These too vary according to needs and preferences. 115 Nature of rural travel'7 Purpose of Travel Time Spent Mode of travel Distance hours per trip km DOMESTIC * Water 3 walk 2 - 3 * Firewood 1 walk/bicycle 2 * Weekly Market 3 walk/bicycle/hand tractor 2 - 3 trailer/bullock cart/bus AGRICULTURE * Inputs/Tools 2 walk/bicycle/motor bicycle 2 - 3 * Harvest . bicycle - 45 mts bicycle/hand tractor 2 * H Tr. trailer-I trailer/bullock cart/bus * B. cart - 2 * bus- 1 1/2 SOCIAL/CULTURAL Varies walk/bicycle/h. tr. trailer/ varies motor cycle ACCESS TO SERVICES * medical-dispensary 2 walk, bus, tractor trailer, 2 - 5 - hospital 5 motor cycle, whatever mode 7 - 10 that is available . schools-primary/ 1/2 walk, bus, bicycle 2 - 3 schools with less facilities -schools with 5 10 - 20 more facilities LONG DISTANCE TRAVEL This Varies This Varies Varies The nature of rural travel highlight three important issues: People in remote villages spend a significant amount of time travelling to access services and goods. A transport system that is geared to the conditions and needs of rural life, will have the capacity to reduce the time spent on travel, and possibly reduce the transport costs. Two good examples are, carrying water for homes and transporting harvest to markets. 17 Average figures for a peasant family 116 Increasing the frequency of buses connecting the village to the closest towns will not solve either of these problems. But, since transport issues of the rural communities are not identified as being different from urban needs, the most commonly resorted to solution is to have more buses. Apart from being unsuitable for load carrying, it may not be possible to operate buses on many rural roads. This is because most rural roads have had to be stopped because of the poor road conditions. This brings us to the other two priority issues - Improving the conditions of rural roads and addressing the limitation of vehicles. Rural roads A majority of the rural roads are earth or gravel roads, cart tracks or foot paths. One or two metalled roads pass through each Divisional Secretariat division, but the conditions of these do not facilitate easy travelling. Earth roads often suit the rural conditions. But the problem arises when these are not constructed or maintained properly. As a result, they easily become muddy and impassable, during the rains. A network of very narrow paths in the village, also creates problems, because its narrowness prevents any other form of vehicle, except the bicycle being used on these roads. Villagers may have to walk 1/2 km to 2 km on such narrow paths to reach a broader road. This is especially difficult when carrying loads. It demands several trips on foot or on the bicycle to carry a considerable amount of weight. Studies carried out by the Intermediate Technology Sri Lanka, highlight some of the reasons for the continued poor condition of rural roads. 5. Local authorities such as the Provincial Councils and the Pradeshiya Sabbas, bear the responsibility of maintaining roads. But often these authorities lack the necessary resources e.g. financial, manpower and technical expertise, to do this. 2. A lack of interest and commitment to make maximum use of the available resources, to improve rural transport facilities, aggravates the situation. A number of reasons, ranging from political interference to bureaucracy, power struggles, lack of other facilities that stimulate job satisfaction, may cause this. 3. The system of maintenance for road construction - This is done in an ad hoc manner, seemingly without a long term plan. Work is entrusted to contractors, whose main interest is profit. This has often resulted in half completed work, paving the way for more repairs, at an increased cost. 4. The most significant reason could be that the construction and maintenance of roads have not taken into account, the needs of road users and the advantage of shared responsibility to maintain good roads. Rural communities who are the main users, have been looked upon as recipients and not as a resource. This results in a 117 situation where the rural communities feel they are powerless, and that improving the infrastructure needed for better transport service is beyond their control. Mobilizing the rural communities to share this responsibility can help the local authorities to maintain rural roads in a good condition, with limited financial resources. Coordination among village societies who carry out road repairs on a voluntary basis and other development organizations also can be used effectively. Limitation of vehicles There are two aspects to this. One is the more often noticed problem of a lack of buses on rural roads. The buses on village interior routes are few and far between. Some routes may have a bus operating twice a day, one in the morning, one in the evening. Some others may have four i.e. early morning school and office trip, mid morning hospital trip (taken by patients/visitors to hospital), afternoon school trip and an evening rip. On some routes buses operate only on market days. The reason for this infrequency is twofold. One is the bad condition of the roads that discourage private bus operators from maintaining more frequent services. The second is the relatively low number of passengers (as opposed to urban and semi urban areas), that make these low income routes. The other is often unnoticed, unless the life patterns of rural communities are studied in depth. This is the lack of appropriate vehicles that can either reduce their workload or help cut down costs. For example a suitable vehicle to transport several pots of water will help save two and a half hours of the time a woman will spend walking to collect water. This would mean a saving of 35 hours per week (refer table 1). In other words she needs spend only seven hours per week for this task, if she has access to a suitable vehicle to help her. Another example can be drawn from the transport of harvest, especially vegetables, to market. For the lack of a better facility, these are often taken by bus to markets. Since buses are designed for passenger transport, the space for goods is severely limited, forcing farmers to cram all the gunny bags on a roof rack or inside the bus as room permits. The damage this does to the vegetables is quite high. On June 4th, 1996, Ceylon Daily News reported that 40% of vegetable and fruit production is damaged due to bad conditions in packing and transporting. Intermediate Modes of Transport This brings us to the topic, Intermediate Modes of Transport, or appropriate, low cost vehicles. An extensive study of the use of such modes has so far not been conducted in the country. But a general observation shows that the use of such modes is very limited. This is especially so in the case of public transport. 118 The models that are in use at present: * The Cycle Trailer - this is introduced by Intermediate Technology Sri Lanka, and manufactured by small manufacturers in the villages. These are disseminated at present facilitated by the credit schemes of rural NGOs in the project areas. This will be commercialized in the near future. * The Extended Bicycle - this is also introduced by ITSL and extensions to bicycles are handled by village manufacturers. This also has a variation that is more suitable for use in hilly areas. * The Side Car for the Motor Cycle - introduced by the GTZ, manufactured by local manufacturers trained by the Industrial Services Bureau (ISB). The vehicles are disseminated by ISB. * Other adaptations to the bicycle - these include various models used by traders. A favoured model seems to be that of two wheels at the front. There is no known source of manufacture and marketing for these models. It can be assumed that they are the outcome of experiments by innovative people. * Bajajs - these are imported by several agencies, and are distributed on a purely commercial basis. Ownership of these is often beyond low and middle income families. Although widely used in urban and semi urban areas, these are not favoured in rural areas. The main reason could be the difficulty to use these on muddy, uneven village roads and narrow paths. Another discouraging factor could be the high initial cost and the high fares. These are mostly used as taxis. * Imported Cycle Trailers - these are different from the Cycle Trailer introduced by the ITSL; the trailer is a permanent fixture to the bicycle. Very few of these are imported as samples by some dealers. * The Motor Cycle Trailer - this is a detachable Trailer, similar to the Cycle Trailer, developed by ITSL. It is being field tested in Suriyaweva, Hambantota. * People's innovations - this covers temporary attachments to bicycles and motor cycles to increase the load carrying capacity, and more complicated experiments. In our field trips, ITSL has come across attempts by villagers to develop trailers to motor cycles and carts being used with different types of tyres. * Animal driven vehicles - The bullock cart has been "modernized" by the users, by fixing tyres instead of wooden wheels. This is done mainly to reduce the cost spent on the wooden wheel. But the effect of the tyre on the strength that the bull needs to pull the cart has not been studies. This list reads several items, but the actual use of these, except for the Bajaj in the urban areas, is very limited. This limitation is evident when compared with the situations of other countries in the Asian and South Asian region. Intermediate Modes of Transport are extensively used both by rural and urban communities of countries such as India, Bangladesh, Vietnam, Philippines and China. 119 Some of the commonly seen modes on the roads of these countries are as follows: India - Cycle Rickshaws, three wheeler vans Bangladesh - Cycle Rickshaws. Three wheeler vans Vietnam - Cycle Trailers, Cycle Rickshaws, Motor Cycle Trailers Philippines - Motor Cycle Side-car, Bicycle Side-car, Three wheeler vans, Jeepneys, Motor Cycle Vans Laos - Motor Cycle Vans Thailand - Motor Cycle vans, Three Wheeler Vans, Motor Cycle Side-cars The spread of such low cost, appropriate mode in these countries is so extensive, and the use so common, that we need to ask why such options have not spread in Sri Lanka. When in neighbouring India, Cycle Rickshaws are seen by the dozen on the roads, why does ITSL need to carry out awareness raising campaigns to promote a similar model in Sri Lanka? Other organizations that are involved in promoting Intermediate Modes, may have a similar experience. Most of the above mentioned countries and Sri Lanka has common geographical and climatic conditions. The quality of life of the low and middle income groups, and their purchasing power is also similar. Given this situation one can make the following assumptions as to be reasons for a low enthusiasm to use Intermediate Modes of Transport in Sri Lanka. * Differences in transport issues are not accepted on their own terms. Comparison of different conditions with the urban situation as the measuring stick, has resulted in non/low development of alternative solutions to transport problems. For instance, village interior roads have fewer passengers. But this is not accepted on its own terms. This rates lower in comparison with urban routes. Therefore, the advocated solution is to operate buses on rural interior roads, with an incentives for the operators. The incentive is to compensate for the low income, and will add to the state expenses. but we can look at the same problem from a different angle, and see that these routes have 10-15 passengers per trip. Then the requirement is for a vehicle that can carry such a number of passengers and -steps will be taken to promote such a vehicle. Jeepneys used in the Philippines and Motor Cycle Vans in Thailand carry 10-15 people and are used widely for public transport. * Sufficient research and development of IMTs have not been carried out - This may be a result of the non-recognition of different needs that call for options. This lack is felt both in the technology field and in the socio-economic field. Ideally, it should be socio-economic assessment of the need such for options, that should guide technology research and development. Considerable 120 research into and development of this area can be followed with incentives and other support to promote suitable modes. Apart from addressing many transport issues, it will also offer new opportunities to manufacturers as well as create more employment. * Low/non recognition of the capacity of rural communities - Economic, political and bureaucratic conditions have infused a submissive nature to a majority of the rural communities. This is often rnisinterpreted as an incapacity to identify and analyze their problems (transport or other), to plan programmes that will help them best and to control such programmes effectively. This results in useful information provided by villagers being overlooked, villagers becoming passive recipients, state becoming the main provider/organizer of services, and an increased cost to provide services. * Lack of information sharing on IMTs - This results in a lack of exposure of the communities, operators of public transport services, policy and decision makers at different levels, to alternative solutions that may address particular transport problems. RECOMMENDATIONS * Rural Transport Planning must recognize participatory planning systems, and should be demand oriented rather than supply oriented. It must recognize the views of the users and vehicle owners (of all types starting from bicycles) as being important and should facilitate a process of decentralized decision making. Such a process should have the independence to develop alternative solutions as deemed suitable by the decentralized bodies. * Government policy should be more favorable to the use of appropriate modes of vehicles, especially in the issue of licenses. Flexibility on the rules and regulations related to its use on public roads is important. * A strategy to work closely with development organizations is necessary for increased understanding of transport needs of various communities. Such organizations have the capacity to adopt a more participatory approach than the state institutions, and as a result is in a position to mirror the people's views more accurately. * Authorities/state organizations related to transport should actively promote research and development of Intermediate Modes of Transport, and other technological aspects related to transport, to suite Sri Lankan conditions. Sharing effectively, the outcome of such research and development is also essential for it to actually benefit the people. * Support to manufacturers to make IMT and innovation adaptation according to user requirements is necessary. This is especially important for small manufacturers who have easy access to user response. Support may include technology knowledge and training, development of workshops, improved 121 access to raw materials and above all recognition of their work and development of it for wider dissemination. * Improving services such as schools and medical centres close to village clusters. This will minimize the travel needs of rural communities and will contribute to increasing their quality of life. * Effective information sharing with international organizations such as the International Forum of Rural Transport Development should be promoted. The benefit of this will be twofold. Rural Transport issues, approaches taken to address these, and the lessons drawn from such experiences can be shared internationally. This could pave the way for better understanding, financial support and cooperation of international agencies, as well as opportunities for others to learn from our experiences. The second, are the opportunities the state, the development organizations and communities have to establish links with related international and regional organizations and use their experience to improve rural transport facilities, locally. 122 17. Regional Integration and National Highways Senanayake, D. A. INTRODUCTION For purposes of this analysis, the provinces of the Country are considered as separate regions and their present centers as their administrative and commercial centers; with Colombo as the main administrative and commercial centre of the country. (Note: this situation may change in the future, with the new devolution proposals). Having made the above assumption, it has to be said that for a meaningful regional/provincial integration to take place it is necessary that the general road network of the Country should contain, in its hierarchy, a clearly defined PRIMARY NETWORK linking these regional/provincial centres; which could provide for travel to take place between them, at reasonable average speeds and with an acceptable degree of ease and comfort. This needs to be so, even if other forms of transport such as Railways are able to provide a good service. Reason being that no other form of transport could provide for the versatility, adaptability and convenience of access as provided by road transport. Also other forms of transport will necessarily be dependent on road transport for their functional efficiency. In this context, the recognition of a system of National Highways, in 1988, pursuant to the formation of Provincial Councils, was a step in the correct direction. However, the National Highways, as recognized then, included all the A and B class roads of the classified system. Also were included roads that were considered as of national importance, from a strategic, cultural and religious point of view. These now add up to about 11,000 km'8. For details on the classification system see the paper by E.I. Munasinghe in this volume. B. A-ROUTE SYSTEM FOR SPECIAL CONSIDERATION Of the above, only about 4,000 km are of the A classification, consisting of the 36 routes, that are depicted in the Motor Map; and these routes link all the provincial centres. In addition they link all the district centres. As such the A-route system alone amply qualified to form a meaningful PRIMARY NETWORK. Incidentally, in the Indian sub-continent, in 1986, there were only 32,000 km of National Highways'9, essentially consisting of those routes that link the State Capitals and other places of national importance. India being nearly 50 times the size of Sri Lanka and 18 Latest RDA figures. 19 National Highways, Ministiy of Transport, India, September 1986 123 with an equally large population, their 32,000 km of national highways is proportionately a small fraction of ours, even if we consider our A-routes only as national highways. A salient feature of the roads in the Indian national highway network is that they are recognized at a very high level compared to their state roads and other roads and they are being continuously upgraded. Also their missing links are continuously studied and new additions are brought in. There is also an ongoing ADB funded programme to supplement the national highways with 3,000 km of expressways20. The important message from the Indian example is that we should be highly selective in designating our primary network of roads or the national highways, and their management should be commensurate with their national importance. Based on the above, as to whether only the A class roads, along with other selected roads of national importance, should have been considered, or should now be reconsidered, as National Highways, appears to be a vital question. This is particularly so because of the lack of sufficient consideration being presently given to this category of roads which perform a vital role in the socio-economic development of the country, and in particular in the inter-regional co-existence. C. A LOOK AT THE PRESENT STATUS OF A-ROUTES QUALITATIVELY As at present, even with the improvements that had been made to several sections of the A-routes of the country, with funding from WB, ADB and also from OECF (Japan), they still severely lack the quality standards required for them to perform at an acceptable Level of Service (LOS). Incidentally, the concept of LOS represents an aggregated indicator of the service to users on a given road, in terms of traffic conditions21, which is generally classified from A to F, through B, C, D and E, with A representing free flow conditions of traffic and F representing highly congested conditions. Based on some tentative assessments that had been carried out by the RDA few years back22, in general, it could be said that all our A-routes at best are at a LOS of D, which puts them in the bottom half of LOS ratings, which is most undesirable. And, the improvements that had been carried out have not changed this situation significantly. Reason for the latter situation, of the above, being that the improvements were mainly directed at correcting the road surface to get a better riding quality, with little consideration given to requirements of alignment, widths, sight distances, pedestrian 20 Journal, Indian Road Congress, 1993 21 XIIIth World Road Congress, 1987; Road Management Systems, M. J. Thedie 22 Unpublished document of the Traffic and Planning Section of RDA, 1990. 124 movements, movement of cyclists, effects of ribbon development, effects of unplanned townships at intersections, etc., which all add up to reducing capacity and speeds of travel, and also to increase in accidents. Certainly, the improvements that have been carried out so far on our A-routes, using WB and ADB funds, would have reduced the vehicle operating costs but as to whether they have reduced the user costs is clearly in doubt. D. DESIRABLE IMPROVEMENTS TO A-ROUTES Conceptually, from the point of view of LOS, it is desirable that the A-route system generally provide for at least a C rating, enabling the fast moving vehicles to maintain reasonably high average speeds. This, however, necessitates an all around improvement of the roadway environment, in addition to the improvements to the roadway itself In this regard, it is necessary to ensure that ribbon development along the routes, and unplanned town developments at intersections, are curtailed or prohibited. The above has to be done through a process of integrated land use planning, centered around the proposed improvements to the roadway system, with the participation of all the relevant authorities, including local government organizations. Along the roadway there will have to be planned street lining and several townships may have to be bypassed. Also, it will be necessary to investigate and plan for the missing links and alternate highways that would be required in the future. Ideally this should be preceded by a related land use plan. With regard to alternate highways some relevant steps were taken by the RDA in the last several years, and nearly 400 km of alternate routes were studied, which includes the proposed Outer Circular Highway to Colombo and also the proposed Southern Highway. The Southern Highway has a special significance from the point of view of the proposed development of the Southern Region. However, its development need not be unnecessarily hurried, except that necessary steps regarding the environmental and social acceptability should be cleared, without unnecessary delay, and the Right of Way (ROW) established, after a well planned resettlement programme for effected persons. Construction is best carried out on a staged development programme, involving the people of the area in the process. Looking for investors on a BOO/BOT basis may become a wild goose chase, and nothing may come about at the end, which means that the Government should consider alternatives to private provision in case such financing is not forthcoming. E. CONCLUDING REMARKS 125 For the existence of a meaningful and sustainable Regional Integration, and equitable development of the Country thereby, a well defined Primary Network of roads, normally referred to as National Highways, is essential and there must be a coordinated effort to achieve same. This would be more so if the Devolution Proposals are to be implemented. 126 HI. OPPORTUNITIES FOR COMPETITION IN TRANSPORT 18. Bus industry issues and options G6mez-Ibainez, J.A. All of Sri Lanka's transport sectors might benefit from restructuring to better encourage market forces and competition, but the need for reform is most pressing in the bus sector. As a result, this report concentrates exclusively on buses, and sets out some preliminary observations about the issues and options for that industry. A later report will develop these issues further and make some observations about highways and railroads. Bus reform is critical because Sri Lanka depends heavily on buses for both urban and intercity passenger transportation. In the Colombo metropolitan area, for example, buses carry approximately two-thirds of all motorized passenger trips (see Table 1). The bus industry share of intercity passenger travel is probably even higher, although recent estimates are not available. Bus' share of motorized travel is likely to decline in the future as rising incomes allow more Sri Lankans to shift from the bus to the automobile. But the absolute number of bus passengers is likely to continue to grow for some time because income growth will also increase the absolute number of trips per capita and allow -- travelers to shift from unmotorized modes to the bus. Table 1: Person Trips by Mode in the Colombo Metropolitan Area, 1995 AM Peak trips 24 hour trips Mode Number (000) Percent Number (000) Percent Bus 587 65.2 2,601 63.0 Rail 68 7.6 226 5.5 Private car or 176 19.5 933 22.5 motorcycle Taxi, van, and 3- 69 7.7 368 8.9 wheeler Total person trips 900 100.0 4,128 100.0 Source: Halcrow Fox, Colombo Urban Transport Study (London and Colombo: Halcrow Fox, 1995), vol. 1, p. 18. Sri Lanka's bus industry is presently suffering from a variety of problems, including overcrowded buses, fares too low to support fleet renewal, chaotic and sometimes unsafe competition among numerous small private operators, and poorly managed and inefficient "peoplized" public bus companies. 127 The present problems of the bus industry are the product of decades of experimentation with different combinations of public and private involvement. Indeed, history in Sri Lanka and elsewhere has suggested to John Diandas, a well known transport consultant and current Chairman of Sri Lanka's National Transport Commission, that bus industries go through cycles of public and private ownership. Each form of ownership works acceptably for a while, but eventually deteriorates enough to provoke a return to the other form, as illustrated in Figure 1. Thus the challenge is not only to solve the present problems of the industry, but to do so in a way that reduces the chances that they will soon reappear. In this context, it is important to understand how the present situation developed. Evolution of the Bus Industry As in most countries, Sri Lanka's first urban and intercity bus services were begun shortly after the turn of the century by private companies23. The colonial government established its authority to license buses and other motor vehicles in 1916, but regulation of the industry was otherwise minimal until 1942. In that year, the government consolidated the industry into 85 companies in response to complaints that competition among bus operators had become so intense that it was destructive for the firms and unsafe for passengers. Each company was given an exclusive franchise to provide service over a particular route or in a particular territory and, in return, had to accept government control over fares. Nationalization This system survived the first decade of independence until the election in 1956 of a new government on a platform of nationalizing key industries, including transport. At the time there were reportedly widespread complaints about overcrowding and poor service by the monopoly bus operators, which may have been due in part to the failure of regulators to increase fares with inflation. Whatever the case, in 1958 the private bus companies were nationalized and consolidated into a single public company, the Ceylon Transport Board (CTB). 23 This history relies heavily on John Diandas, "Notes for Benefit Comparison of Government Sector and Private Sector Supplied Bus Services" and "The Future of Government Owned Bus Transport in Sri Lanka", pp. 46-84 and 85-120 inAspects of Privatization in Sri Lanka, (Colombo: Friedrich-Ebert- Stiftung, 1988); Gabriel Roth, "Improving Bus Service in Sri Lanka: Report to the National Transport Comnmission", Washington, DC, July 14, 1995; and Halcrow Fox, Appraisal of the bus Industry, working paper no. 9 of the Colombo Urban Transport Study, London and Colombo, December 1995. 128 Figure 1: The Diandas Cycle of Public and Private Ownership i NOlLYS1nYNOIlYN ON E MAN ONE Bus 4~~~ Ir~ m1 % BUS H0 rTRYCY /Ll BUS HISTORY CYCL 129 For at least its first decade, the CTB was generally regarded as a success. The civil servants brought in to manage the new company were competent and dedicated, and in its first years the government bought 2,000 new and reconditioned buses to allow the CTE to retire its oldest vehicles, relieve overcrowding, and extend routes into underserved areas. Over the years, however, the government pressured the CTB to take on large numbers of staff and raise pay as well as to further expand services into rural areas where traffic was unprofitably light. The government also was slow to allow fares to keep pace with inflation, a serious problem during the inflation of the early 1970s. By the mid-1970s the CTB was grossly overstaffed and incurring substantial losses. The government, suffering from a stagnating economy and budgetary deficits, did not have the funds to buy the CTB new buses and complaints about poor service and overcrowding were again widespread. The Return of Private Operators The situation worsened after a new government came to power in 1977 with a mandate to revive economic growth by reversing the protectionist policies of the past and opening up the economy to competition. The new government's efforts were successful, but the CTB found its self completely unable to cope with the sharp increases in bus ridership stimulated by the economic revival. At first, the government attempted to solve the bus problem by raising fares and pressing the World Bank for a large loan to buy the CTB additional buses. The Bank was reluctant to provide new vehicles without some effort to reform the system, however, and proposed that private operators be allowed to provide service once again. The government, which was ideologically sympathetic to the idea anyway, agreed and in 1979 private bus services resumed, although under terms very different than before. One difference was that both public and private companies would be allowed to provide service. The CTB was divided into nine regional transport boards (RTBs) or companies and a new Sri Lanka Central Transport Board (CTB) was created to oversee them.24 The RTBs were given substantial autonomy, however, on the theory that these smaller companies would be easier to manage and more responsive to local problems. They were also provided with some new buses, the notion being, at least initially, that private services would complement rather than compete with public bus routes. Private buses were soon allowed on RTB routes as well, however, as the public companies, still overstaffed and losing money, could not provide enough capacity to keep up with demand on their own routes. A second key difference was that the private firms were not granted territorial or route monopolies as they had been from 1942 to 1958 and, in return, were also not subject to fare regulation. A private bus company had to obtain government permission to serve a particular route, but this was intended only to protect against excessive congestion or 24 The RTBs were created in 1978 but the Central Transport Board was not renamed as the CTB until 1981. 130 safety problems. Fare regulation would be unnecessary since private operators would be disciplined by competition among themselves and with the RTBs. Although it took several years, the new system was successful in expanding the capacity of the bus system by attracting a large number of private operators. The slow start was apparently due in part to the difficulties small entrepreneurs encountered in trying to borrow funds to buy buses, a problem that was relieved in the early 1980s when the government obtained a World Bank loan to provide private operators with loans at reasonable rates. Within eight years, however, the private sector was operating approximately 12,000 buses compared to 5,000 by the RTBs (see Table 2). The private buses are typically smaller than the RTB buses, however, so the two sectors had approximately equal shares of passenger traffic.25 Most of the private bus operators own only one or two buses and the competition among them is so intense as to cause problems. The private operators serving a route seldom maintain a regular or coordinated schedule, for example, and bus drivers are often alleged to race each other to stops or engage in other unsafe behavior to capture passengers. The buses are usually operated for only one shift per day so there are few of them on the road after 6 PM when passenger traffic thins. Some large companies reportedly attempted to enter the market in the early 1980s, but were driven off by the intensity of the competition. Table 2: Public and Private Buses in Service, 1979-1987 Private buses CTB/RTB average with route daily buses operated permits 1979 n.a. 809 1980 5,670 1,103 1981 5,496 5,075 1982 5,614 6,988 1983 5,541 9,602 1984 5,062 10,018 1985 4,880 10,343 1986 4,738 11,505 1987 4,802 12,384 Source: Diandas, "The Future of Government", pp. 111-112. Private bus operators also effectively have become subject to fare regulation over the years, which has threatened their profitability and ability to replace their vehicles. When private operators apply for a license to serve a route they must specify the fare that they will charge. Although the fare is not a legal grounds for denying a route license, 25 Halcrow Fox, Appraisal of the Bus Industry, p. 5. 131 private operators have been told informally that their license applications will be denied if they propose fares higher than those charged by the public bus companies. This limitation on fares has become a serious problem in recent years because the public bus companies have not had a fare increase since 1990 while inflation has increased price levels by approximately 50 percent since. As a result, the private operators are reportedly not earning enough to replace their buses and the number of private buses is thought to have been declining since 1993 or 1994. Peoplization The return of the private operators and the reorganization of the CTB into RTBs did little for the public bus companies, and their continuing problems eventually provoked a further round of reforms. The RTBs as a group did not earn enough of an operating surplus to make a significant contribution to capital costs or depreciation, and many apparently incurred operating losses. As a result, they remained heavily dependent on central government support, particularly for the purchase of buses. In a negotiation over a further loan for new buses in the late 1 980s, the World Bank pressed the Sri Lankan government to privatize the RTBs. The government responded instead by "peoplizing" the companies. Under the peoplization program, the RTBs were broken up into 93 separate companies, each organized around an existing bus depot. The government retained title to the immobile assets, primarily depots and bus stations. Those employed at the depot when it was peoplized were given, free of charge, shares worth 50 percent of the mobile assets; the Treasury retained the remaining 50 percent of shares for later disposal. A World Bank loan was used to finance an early retirement program, so that the newly peoplized companies would not be so encumbered by excess staff, as well as to buy new buses. The peoplized companies are governed by boards of directors elected by the shareholders which, in practice, has meant boards dominated by the employee owners. The first depot was peoplized in 1990 and the process completed in 1993. As part of the peoplization reform, the government created transportation commissions at both the national and the provincial levels to regulate the bus industry. The National Transportation Commission (NTC), established in 1991, is responsible for regulating routes that cross provincial boundaries, for advising the national government on transport policy, and for administering a program of subsidies that the central government provides the peoplized companies in return for serving unrenumerative but socially desirable routes (primarily in rural areas). The provincial transport commissions regulate bus routes that are entirely within their provinces. The CTB was retained with the responsibility for allocating new buses bought by the central government among the peoplized companies. Service provided by the former RTB depots increased by approximately 30 percent in the first years of peoplization, but largely because the government provided the peoplized companies with approximately 2,700 new buses. Some depots reduced their 132 staffing levels, but the gains were smaller than hoped for in part because some of the best employees took advantage of the early retirement program. Although some peoplized depots are earning enough to cover operating expenses, most are not earning enough to repay the government for the new buses they received. As a result, the peoplized depots will be unable to maintain services when the buses they recently received begin to wear out. Current Problems Any reform of the bus industry must address five problems. If possible, moreover, it must address them in a fashion that avoids the frustrating cycle of reforms identified by Mr. Diandas. Inadequate Capacity The most basic problem is the periodic crises caused by insufficient bus service or capacity. Presently, the crisis may be only moderately serious as the reported decline in private buses has been partially offset by the recent infusion of new buses to the peoplized companies. But this relief is clearly only temporary since the peoplized companies are not earning enough to maintain their fleets at present strength and the decline of the private fleet is presumably continuing. The social costs of inadequate capacity are probably enormous, although they have not been well documented. Overcrowded buses have lengthened and made less comfortable the commutes of workers and students. One danger is that middle and upper income Sri Lankans may respond by shifting more rapidly to private modes of Importation, which would be both most costly for them and add to congestion on the roads. The deterioration in bus service is usually blamed for the appearance of subscription van services in Colombo in the last few years, for example. These private vans contract to carry workers to offices or children to schools for monthly fees that are reportedly many times the monthly equivalent in bus fares. But the greatest cost of poor bus service may be to those Sri Lankans too poor to afford a private alternative; they must suffer long delays in their journeys, walk, or forgo trips altogether. Fare Levels and Structure The failure of the government to allow bus fares to keep pace with inflation is a root cause of inadequate bus service. As shown in Table 3, fares have been increased only sporadically in the last twenty five years. Adjusting for inflation, fares were their highest in the early 1980s when the government was trying to make the bus business profitable enough to attract private bus operators. Since 1983 fares have been increased only once, in 1990. In real (net of inflation) terms, the present average fare of 26.9 cents per 133 kilometer is the lowest it has been in many years and only half as large as the fares of the early 1980s. Table 3: Average Bus Fares Fares in current cents Fares in constant cents Date of fare Current cents/km Index 1990 cents/km Index increase (1990=100) (1990=100) 1971 2.77 10.3 18.47 68.6 1974 4.70 17.5 25.54 94.8 1978 5.47 20.3 24.20 89.9 1980 7.18 26.7 22.72 84.4 1980 11.60 43.0 36.71 136.3 1983 14.40 53.3 30.64 113.8 1983 17.00 63.1 36.17 136.3 1990 26.93 100.0 26.93 100.0 1994 26.93 100.0 17.95 66.7 Source: Halcrow Fox, Appraisal of the Bus Industry, p. 4. Fares are deflated with the consumer price index as reported in International Monetary Fund, International Financial Statistics Yearbook 1995, pp. 702-703. The structure of bus fares is also problem as it causes some types of routes or services to be more profitable than others. In Sri Lanka, fares on local urban and rural routes vary by the number of "stages" a bus passenger travels.26 As shown in Table 4, the fare for the first stage is 1.5 rupees, and an additional 0.5 rupees is charged for each additional stage up to eight. From the ninth stage on, each additional stage costs 0.25 rupees. One problem is that the length of a stage varies among routes. Stage boundaries are usually set at prominent intersections or landmarks along a route and thus average stage lengths are bound to vary somewhat from one route to the next. The routes that date from the 1950s or earlier reportedly often have a stage only approximately every 3 kilometers, however, while more recently established routes have stages approximately every 1.5 kilometers and thus tend to be more profitable.27 Even where stage lengths are approximately the same, routes with traffic flows that are directionally balanced or more steady over the hours of the day tend to be more profitable than those that do not. Routes 26 Fares on long distance routes are by kilometer: for a description of the fare structure see K.G.D.D. Dheerasinghe et al., Report of the Committee on Transport Fares, report to the Ministry of Transport, Environment, and Women's Affairs, August 1995. 27 Both peoplized and private bus operators noted variations in bus stage lengths among routes in interviews but the authors have not yet encountered data describing the variation. For some examples see Dheerasinghe et al., Report of the Committee on Transport Fares, pp. 52-53. 134 that have short passenger trips also tend to be profitable because the first stage costs so much more than subsequent stages and the bus operator can sell the same seat several times on a bus trip. As a result, the shortages of bus capacity tend to be uneven: while buses are heavily overcrowded on some routes there may be excess capacity on a nearby route with favorable stage lengths or travel patterns. Table 4: Bus Fare by Number of Stages Stages Fare Stages Fare 1 1.50 9 5.50 2 2.00 10 5.75 3 2.50 11 6.00 4 3.00 12 6.25 5 3.50 13 6.50 6 4.00 14 6.75 7 4.50 15 7.00 8 5.00 etc. etc. Two special inter-ministerial committees have recommended increases in bus fares in the last several years. The first, chaired by Mr. Diandas, was primarily concemed with the organizational problems of the peoplized companies rather than fares.28 In its December 1994, report, however, the Diandas committee noted that fares would have to be raised by 33 percent to allow the companies to be self sufficient from the farebox alone, although it recommended a combination of smaller fare increases and government aid instead. The second special committee, chaired by Mr. Dheerasinghe of the Central Bank, was established by the Ministry of Transport, Environment and Women's Affairs specifically to investigate the need for a bus fare increase.29 In its August 1995 report, the Dheerasinghe committee recommended that fares be increased by approximately 39 percent over current levels. The committee suggested that the current stage system be retained for local services but that anomalies in stage length be reduced and that premium fares be allowed for two new types of service: express or noted stop local services and luxury air-conditioned intercity services. The committee based its recommendation on an investigation of the cost structure of bus operations of both peoplized and private companies. It also noted that even poorer Sri Lankan households spent an average of less than 5 percent of their income on transport so the projected fare increases would have only a modest effect on household budgets (see Table 5). 28 J. Diandas et al., Committee to Discuss Matters Relating to Peoplized Bus Depots and the Financing of the Purchase of Buses, report to the Ministry of Finance, Planning, Ethnic Affairs and National Integration, Colombo, December 6, 1994. 29 Dheerasinghe, et al., Report of the Committee on Transport Fares 135 Table 5: Percent of Household Income Spent on Transport, 1986/1987 Household income in rupees per month 0-1500 1501-3000 3000-5000 5000-10,000 Over 10,000 Colombo municipal area 4.0 3.4 3.3 3.8 5.2 Urban Sector 2.7 3.9 4.0 4.0 5.6 Rural Sector 3.6 4.1 4.8 6.1 5.2 Estate Sector 2.7 2.1 2.0 n.a. n.a. All Sectors 3.3 3.8 4.4 5.8 5.5 Source: Consumer Finances and Socioeconomic Survey 1986/87 as reported by Dheerasinghe, et al. Report of the Committee on Transport Fares, p. 45. The cabinet has delayed any action on the Dheerasinghe committee's recommendation, presumably because it thinks raising bus fares is too politically sensitive at this time. In late 1995 and early 1996 private bus operators in the Western Province threatened to implement a fare increase unilaterally or to strike for a fare increase. The provincial government warned the operators that it will not tolerate either action, and has reportedly threatened to revoke the route licenses of operators who raise their fares or strike. Inefficiencies in the Peoplized Companies It is difficult to compare the efficiency of the private and peoplized bus companies. Data on the private firms are not readily available and the private operators use different types of vehicles and operate one shift per day instead of two. Nevertheless, the private operators apparently have been profitable during periods when the peoplized operators have not, which suggests that the peoplized operators are less efficient. Currently, the peoplized companies as a group are still losing money despite the infusion of new buses that they received. As shown in Table 6, they have significantly increased the number of buses and bus-kilometers they are operating and the number of passengers they carry from early 1994 to late 1995. But this has been accomplished largely with the new buses rather than through any improvements in staff or equipment productivity. The ratios of staff per bus or per bus kilometer have remained stable, for example, and are rather high by international standards (although reportedly not as high as under the RTBs). The accounting losses reported by the peoplized companies significantly understate the true economic losses, moreover, because depreciation and capital expenses are seriously underestimated. Reported depreciation increased only 136 modestly during the infusion of new buses and the peoplized companies are reportedly not making payments on the loans they took from the government to finance the new buses.30 Table 6: Performance of the 93 Peoplized Companies, 1994-1995 1994 1995 Jan.-June July-Dec. Jan.-June July-Sep. Outputs Passengers (millions) 478 499 568 301 Buses operated 3946 4467 4620 4778 Bus kilometers operated (millions) 144 163 172 91 Inputs Bus fleet 7371 8457 8753 8795 Buses 5 years or less 1944 3082 3515 3850 Total staff 30,123 31,346 32,933 34,387 Productivity Staff per active bus 7.6 7.0 7.1 7.2 Staff years per 104.6 96.2 95.7 94.5 million bus kilometers Costs Operating 2032 2141 2376 1262 Depreciation 156 182 200 109 Total 2188 2323 2576 1371 Revenues Passenger 1604 1743 1991 1070 Government & other 288 310 296 146 Total 1892 2053 2287 1218 Accounting Loss 296 270 289 153 Source: National Transport Commission Two special inter-ministerial committees have been appointed recently to assess the problems of the peoplized companies and recommend changes. The first, the Diandas committee mentioned earlier, argued in its December 1994 report that the peoplized companies were handicapped by their size and form of ownership. The individual depots were too small to support a high quality management or purchase in bulk while the shareholding structure left management too subject to union interference and made it impossible to attract private capital. The committee recommended that the peoplized 30 The peoplized companies were allowed to buy the buses with a 5 percent down payment and financing the remainder with a loan from the national government. 137 depots be "clustered" into groups and perhaps supervised by revived regional transport boards. The second committee, chaired by Mr. Tilakaratne, developed these ideas further. In its July 1995 report, this committee proposed to consolidate the peoplized depots into eleven large Regional Transport Companies (RTCs) with timetable requirements ranging from 300 to 1000 buses each.3' Shares in the existing depots would be exchanged one-for- one for shares in the new RTCs, but the Treasury would be given additional RTC shares in return for assuming the peoplized depots' debts to the government with the result that the employees' shares would be greatly diluted. Professional standards would be established for the executive directors and other senior management of the RTCs and the CTB would act as a holding company overseeing the companies on the Treasury's behalf. The government has taken no action on these recommendations to date. The committees' diagnosis of the peoplized companies problems are more convincing than their recommendations. It is unclear whether the proposed RTCs are viewed by the committees as a long term solution or as an intermediate step toward a more fundamental reform, such as privatization. As a long term solution, the RTCs seem wanting in that they differ little from the RTBs that provided by service from 1978 to the early 1990s. Operating Practices and Service Quality The current system also encourages certain operating practices that are unsafe or reduce the quality of service. Many of the problems are caused by the competition for passengers among small private operators serving the same route. Although there are little data on how common these practices are, it is often alleged that: * Drivers refuse to depart from the bus route loading bay in the terminal until their bus is full, with the result that passengers waiting at intermediate stops can not board. * Alternatively, one operator will place a bus two minutes ahead of a rival's and nurse it along to take all the passengers. * Drivers may race recklessly down the road in order to pass a rival or beat it to stops. The system of small operators is also blamed by some for the fact that most private buses do not provide service after 6 or 7 PM. An operator that had an exclusive franchise for a route would have incentives to provide evening or early morning service since those passengers would make a return trip during the day. But a small bus company sharing a 31 W.M. Tilakaratne et al., Report of the Committee on the Reorganization of the Peoplized Companies and Private Bus Operation, report to the Ministry of Transport, Envirornent and Women's Affairs, Colombo, July 20, 1995, pp. 2-5. 138 route with others does not have the same incentive to extend service hours since it can not capture the full revenue gains.32 The Tilakaratne committee that recommended the reorganization of the peoplized depots as RTCs also recommended the gradual but forced consolidation of small bus owners into companies.33 Under its proposed scheme, private operators would be given notice that after three years only companies with at least 50 buses and operating vehicles of at least 40 seats would be issued route licenses. The small operators would be encouraged to form themselves into companies, to lease or sell their bus to an RTC, or to agree to operate in association with and under the rules of an RTC. Companies would not be given an exclusive franchise to a route but all operators, both RTCs and any new private companies that form, would be encouraged to establish associations on a geographical basis to resolve disputes over unfair competition among themselves without bringing them to transport authorities. The national government has not endorsed this proposal but, in the mean time, some of the provincial governments have begun to use their regulatory powers to encourage more coordinated and orderly service. The Western Province Transport Commission, for example, has begun to assign dispatchers to supervise bus terminals and insure that buses depart at regular intervals and are not allowed to linger in the loading bays. It is also trying to negotiate cooperative agreements among the operators to provide evening service and carry school children on concessionary fares; operators who cooperate are given preferential positions in the dispatching queues at the terminals. The concession has managed to negotiate agreements for only a small fraction of the routes it supervises so far, although it is hopeful that the system can be expanded. One impediment, according to the commission chairman, is that the peoplized companies routinely do not pay their licensing fees to the Province, which leaves the commission short of funds to hire dispatchers and other staff. Unprofitable Routes and Concessionary Fares A final difficulty is in the administration of schemes to provide subsidies in return for providing socially worthwhile but unprofitable rural routes and for concessionary fares for school children. The government had required the CTB to provide these services and fares, and the peoplized companies have inherited these responsibilities. The NTC currently provides subsidies to the peoplized companies intended to defray the costs of these services, but the amounts are widely regarded as inadequate. 32 This argument has been made eloquently by J. Diandas in his many papers on bus competition and regulation. 33 Tilakaratne, et al. Report of the Committee on Reorganization, pp. 6-7. 139 School children are allowed to purchase season tickets discounted by 70 to 85 percent of the normal fare depending on the student's age.34 Season tickets are also available to the general public for a 35 percent discount on the theory that the company saves from receiving payment in advance, faster boarding times, and reduced fare evasion or leakage. Thus, the extra discount for school children amounts to between 35 and 50 percent of the ordinary fare. School fares are available from peoplized operators but not from most private operators. The Diandas committee calculated that the extra discounts for scholars cost the peoplized companies 57 million rupees in 1993 for which they received no compensation.35 The NTC regards 1,892 rural routes operated by peoplized companies as unrenumerative. The government had approved an annual payment of 200 million rupees in 1990 to cover the losses on these routes. This amount was apparently barely adequate at the time and has not been increased since despite compensation. The merits of these various subsidy schemes do not appear to have been reevaluated in many years. It is possible, for example, that more efficient operators could serve at least some of the rural routes without subsidy. But if it is indeed socially worthwhile to continue to support these unprofitable fares and services, then it is unreasonable to require the peoplized operators to provide them without adequate compensation. Options Fare Regulation and Capacity A fare increase is obviously basic to solving the present shortage of bus capacity. The national and provincial governments simply do not have the financial resources to subsidize public transport heavily; there are simply too many deserving education, health, and social programs that have less prospect for being financially self supporting. The social costs of inadequate bus capacity and service are probably very high, moreover, and probably worse for low income groups than higher bus fares, although it would be useful to have more evidence on both questions. In the past the government has been reluctant to raise fares because bus services are so important and politically sensitive. This reluctance appears to have contributed importantly to the cycle identified by Mr. Diandas, in that failures to approve fare 34 The discount is calculated based on the ordinary fare for two trips per work day in the season. The scholars' discounts are 85 percent for school children under 12 years of age, 80 percent for other school children 12 to 21 years old, and 70 percent for higher education students. For a description of the system see Diandas, et al. Committee to Discuss Matters Related to Peoplized Bus Depots, pp. 9- 10. 35 Diandas, et al. Committee to Discuss Matters Related to Peoplized Bus Depots, pp. 9- 10. 140 increases contribute to overcrowding, poor service, and eventually more radical reforms. It is unfortunate that bus services sometimes must deteriorate so seriously before fare increases become politically acceptable. It would be helpful, therefore, to use the present crisis as an opportunity not only to solve the industry's immediate financial problems but also to find a formula to help break the Diandas cycle by insulating future fare decisions from immediate political pressures. One possibility is to strengthen the current system under which the bus companies are allowed to raise bus fares without government approval, at least in theory. This policy works best when bus companies are not granted exclusive route franchises, so that competition among the operators serving a route provides incentives to keep fares reasonable. If such competition is maintained, the law might be amended to specifically prohibit (if it does not say so already) the provincial or national transport commissions from considering fares in granting route licenses, or to strictly limit the grounds for license refusal to safety or congestion considerations only. Government regulation of fares may need to be continued, however, particularly if Sri Lanka shifts to a system of exclusive route franchises, as discussed below. In this case, however, regulatory powers should be carefully defined and limited. Fares might be automatically indexed to inflation, for example, although this might prove excessively rigid even for the operators. Alternatively, the operators might be allowed to set their own fares, with government review required only for proposals to increase fares faster than inflation. Regulation of Entry and Competition Some remedy for the service problems caused by having numerous small operators compete along the same route would be helpful. However, it is not clear that these service problems are so serious that it would be worth foregoing the other benefits of competition to eliminate them. The trick, then, is to find some compromise that preserves many key benefits of competition--such as pressures to control costs--while reducing the service problems. The recommendation of the Tilakaratne committee to force the consolidation of small operators into companies of at least 50 buses may help reduce service problems, but probably not by a great deal. Competition among larger operators can be as fierce as competition among small operators. Many of the same service problems identified in Sri Lanka are also found in Great Britain, for example, where multiple operators are allowed to serve a single route but many companies have more than 50 buses.36 Forced consolidation of the small operators is likely to be politically sensitive, moreover, so it should only be done if the advantages are clear. 36 See J. A. Gomez-Ibanez and J.R. Meyer, Going Private: The International Experience with Transport Privatization (Washington, DC: Brookings Institution, 1993), Ch. 4. 141 There are three main options for reducing service problems but preserving some benefits of competition, two involving exclusive franchises and one involving regulation of multiple operators. (1) Exclusive, indefinite franchises. The first option is to grant operators exclusive franchises for an indefinite period. The franchises might include conditions, such as an obligation to provide minimum levels of service during evening and other hours or to offer concessionary fares to students. As long as these conditions were met, however, the franchise would not be revoked. This system is similar to that employed in Sri Lanka between 1942 and 1958 and is probably the most common system of licensing private urban bus operators in other countries. This option eliminates the service problems associated with multiple operators but at the cost of significantly reducing competitive pressures on the franchisee. If the franchisee is a private firm, it will still have incentives to control unit costs in order to increase profits. The franchisee will face some competition, moreover, from other bus operators to the extent that bus routes overlap, and from other modes of transportation, such as the autos, school and office vans, taxis, or motorized tricycles. But the competition from other routes and modes is unlikely to be sufficient to eliminate the risk of monopoly or market power, thus requiring some form of fare regulation, with all the attendant political risks described earlier. Moreover, this type of franchise system often makes it more difficult to modify routes as the city grows and traffic patterns change. Each franchisee has a vested interest in protecting against encroachments on its franchise. Thus when one bus company proposes a change in its route, the neighboring franchisees typically protest and the franchising authority, pressed by conflicting claims, often finds it easier simply to preserve the status quo. Resistance to change can be reduced if the franchises are for entire corridors or zones of the city rather than single routes. Zone or corridor franchises do not eliminate resistance to change, however, and they reduce the competitive discipline created by overlapping routes. Finally, this option requires that the small operators form associations or consolidate into firms large enough to operate at least one route. (2) Exclusive franchises, periodically tendered. The second option is to grant exclusive franchises for a limited time and to award the franchises on the basis of competitive tendering. If the franchise term were five years, for example, roughly 20 percent of the routes would be put out for tender each year. The competition might be over the fares offered or the service guarantees provided. Competitively tendered franchises are less common than indefinite franchises but they have been implemented successfully in Santiago (Chile), Great Britain, and elsewhere. 142 This option avoids some of the drawbacks of the indefinite franchise. In particular, competitive pressures are increased substantially through the process of periodically rebidding the franchise. The government may retain title to any fixed assets required to operate the route, such as stations or depots. The prospective operator need only supply the vehicles required, which increases the number of potential bidders. Fare regulation typically is avoided since the bids usually specify the fare increases allowed during the term of the franchise. Franchisees have less incentive to resist route changes since the term of their franchise is limited. The competitively tendered franchise does require a staff to administer the tendering process, however, as well as operators large enough to operate an entire route. (3) Supervised competition among multiple operators. The third option is to allow multiple operators to serve a single route but to supervise the competition among them. The supervision mnight be through operator associations, as envisioned in the Tilakaratne committee report; by the government transport commissions, as is occurring in the Western Province; or by some combination of the two. This approach has two potential advantages over exclusive franchises. First, competition among the multiple operators serving each route may be strong enough to make it unnecessary to either regulate fares or periodically rebid franchises. Second, this approach does not require the forced consolidation of the existing small operators into larger companies. The main disadvantage is how to give the operator association or government agency just enough powers and discretion that it can prevent the undesirable aspects of competition but not so much that it will be able or tempted to intervene excessively. In this regard it is probably particularly risky to rely entirely on operator associations to supervise competition. Without any special powers, the associations may be unable to discipline firms who refuse to join or members who cheat on the rules. But if they are granted special powers, however, the associations may be tempted to expand the scope of their activities in undesirable ways. In particular, because their members are motivated by profit, the associations will have a strong incentive to go beyond trying to establish an orderly timetable or driving standards to restricting entry, raising fares above normal levels, or other kinds of less desirable limitations on competition. The experience of Sri Lanka and other countries suggests the possible limitations of associations. At one extreme is the apparent failure of the private operator associations that the Sri Lankan government promoted in the 1980s. These associations, which have since been abandoned, were probably unable to improve timetable coordination and driving practices because they lacked effective disciplinary sanctions. At the other extreme are the excessively powerful route, associations that operated in Santiago, Chile through the 1970s. The Santiago route associations used illegal means--the threat of violence--to discipline members and others, and for a time they were able to intimidate 143 new operators from entering and thereby keep profits and fares, which were also unregulated, at high levels. It may be more acceptable to empower government commissions to supervise competition among multiple operators, perhaps in cooperation with a route association, since the government does not have the profit motive to tempt it to limit competition excessively. To the extent that the Western Province Transport Commission has been more successful at coordinating schedules than the operator associations of the 1980s, for example, it is almost surely because the transport commissions have been granted powers that the route associations were not. The provincial transport commissions control bus terminals and grant route licenses and can discipline firms by giving them low priority in the dispatch queues at the terminals or in extreme cases, with the threat of revoking their licenses. But, even if a government commission is not motivated by profit, it still may be subject to various political pressures to protect operators or passengers from market forces, often with undesirable results. The recent threats by provincial transport commissions to revoke the licenses of operators who exercise their legal right to raise fares are a case in point. If government is involved in supervising competition on routes served by multiple operators, its powers may have to be closely proscribed. The second option--exclusive franchises that are periodically tendered--is probably the best long term solution. It avoids some of the problems of competition within a route while still maintaining competition for the right to serve the route. The pressures and temptations for heavy handed government intervention are also less: fare regulation becomes a less critical issue because competition still exists, and regulation of operating practices on the route is not necessary because the route franchise, though temporary, is still exclusive. The third option--supervised competition Of multiple operators--should also be explored, particularly if it proves difficult to force the consolidation of the small operators into firms or cooperatives. In this case, it is crucial to limit the powers of the coordinating associations or government commissions so that they are not abused. And if such limitations are impossible, then it may be preferable simply to retain the present system, chaotic as it is. Reform of the Peoplized Companies Many of the problems with the peoplized companies stem from the fact that they are neither fully public nor fully private but rather an awkward combination with many of the worst traits of both sectors. The companies are subject to excessive union and employee interference because, as the Diandas and Tilakaratne committees point out, approximately half of the shares were given to the employees as private shareholders. The companies are subject to government interference as well, however, because the remaining shares are held by the government and not for sale. The prospect of government 144 interference makes the private shares virtually worthless to anyone but the employees. And no one block of shareholders can gain enough control to confidently invest in the enterprises. For example, no one has an incentive to buy up employee shares in order to consolidate several depots into a firm large enough to support professional management. The ambiguous status of the peoplized companies will have to be resolved if their performance is to improve. But it is probably less important whether they become fully public or fully private than that they face the appropriate incentives and opportunities. A publicly owned firm might have strong incentives to be efficient if, for example, it had to compete with other firms (public or private) and no longer received special government subsidies. The Government could still subsidize unprofitable but socially worthwhile routes, but it might do so by putting those routes out for tender and allowing all companies, public or private, to bid. Such a system has been established in Britain, for example. The problems of the peoplized companies therefore can not be resolved without also resolving the problems of regulating fares and competition discussed earlier. It will be more reasonable to cut the peoplized companies off from free buses or other special subsidies, for example, once fares are set so that efficient operators have a reasonable prospect of recovering their operating and capital costs from the fare box. Similarly, one will be more confident that the peoplized firms will be efficient if they are disciplined by a competitive environment and regulatory system. Reorganization of the Private Operators Although it would be helpful if the private operators could be consolidated as the Tilakaratne committee proposed, it must be done in a practical and orderly manner. Most small private operators have invested their life's savings in a bus or two, and they will be understandably sensitive to any reforms. The small operators also carry approximately half of all bus passengers, so any consolidation must be done in a fashion that is not overly disruptive to the services they provide. The government needs to investigate further how the transition might be accomplished. Any deadline for consolidation probably should be coupled with a fare increase, for example, so the small operators could at least see the possibility of several years of profitable operation to pay off their debts. The government might provide technical assistance in the formation of cooperatives. And any new buses registered during the transition might be required to be members of cooperatives or firms, so as to avoid the creation of a new group of smaller operators. Conclusions In sum, the present crisis offers an opportunity to attempt more comprehensive effort of the bus industry. Many of the industry's problems are chronic and interrelated, 145 and thus piecemeal corrections are likely to prove ineffective and short-lived. A comprehensive approach must address four related topics. First, the system of fare regulation must be reformed so that the profitability of the industry does not fluctuate as wildly as it has in the past. The key in fare regulation is to balance two objectives: protecting the public from potential monopoly abuse while offering the operator a reasonable opportunity to earn a fair return on his investment. If the industry can be structured so as to be competitive, fare regulation may be unnecessary. But if it cannot, then the regulatory rules must be clear enough to provide the operator with more stable prospects than he has enjoyed to date. Second, the system of controlling entry and regulating competition should be reconsidered. If it is possible to consolidate the small operators into cooperatives or larger firms, then a system of exclusive franchises that are periodically tendered is probably best because it maintains the positive aspects of competition while reducing the negative. If it is not possible to consolidate, then the use of operator associations or government commissions to supervise competition among multiple operators is worth considering. One must be careful that the cure is not worse than the illness, however, by carefully limiting the aspects of competitive behavior that the associations or commissions are allowed to control. Third, the present ambiguous status of the peoplized companies should be resolved. It is less important whether they become fully private or fully public than that they be cut off from direct subsidy and forced to compete on equal terms with other firms. Finally, any forced consolidation of the smaller private operators must be carefully designed to recognize the significant investments they have made in the industry and to insure the continuity of services. 146 19. Study of Transportation Services Provided by School and Office Vans Lye STUDY OF TRANSPORTATION SERVICES PROVIDED BY SCHOOL AND OFFICE VANS May 1996 Prepared for: Transport Studies and Planning Center. Ministry of Transport, Environment & Women's Affairs 147 CONTENTS 1. INTRODUCTION 1.1 Background 1.2 Terms of Reference 1.3 Scope of Work 1.4 Study Area 2. CORDON COUNTS OF SCHOOL AND OFFICE VANS 3. SURVEY OF PARENTS OF SCHOOL VAN USERS 4. INTERVIEWS OF PARKED VAN DRIVERS 5. SURVEY OF OFFICE VAN USERS 6. REVIEW OF ADVERTISEMENTS FOR VAN USERS 7. GROWTH RATE OF VANS FROM INSURED DATA 8. REGISTRATION OF SCHOOL AND OFFICE VANS 9. PERCENTAGE OF PERSON TRIPS IN SCHOOL AND OFFICE VANS 10. GROWTH RATE OF SCHOOL AND OFFICE VANS IN SUBURBAN AND OUTER METROPOLITAN AREAS TABLES 1 ANALYSIS OF SURVEY OF CORDON COUNTS 2. ANALYSIS OF SURVEY OF PARENTS OF SCHOOL VAN USERS 3. ANALYSIS OF INTERVIEWS OF PARKED VAN DRIVERS 4. ANALYSIS OF SURVEY OF OFFICE VAN USERS 5. REVIEW OF ADVERTISERS FOR OFFICE VAN USERS 6. PERSON TRIPS TO COLOMBO IN THE MORNING PEAK 7. PERCENTAGE OF PERSON TRIPS IN SCHOOL AND OFFICE VANS APPENDIX 1. TERMS OF REFERENCE 2. SURVEY FORM FOR CORDON COUNTS 3. QUESTIONNAIRE ON SCHOOL AND OFFICE VANS 4. SCHOOLS FURNISHED WITH QUESTIONNAIRES AND THEIR RESPONSE 5. TRANSPORT ZONES IN WESTERN PROVINCE 148 STUDY OF TRANSPORTATION SERVICES PROVIDED BY SCHOOL AND OFFICE VANS This Study is a component under the TRANSPORT PLANNING AND STRATEGY PROJECT No. SLR/92/014 sponsored by UNDP. 1. INTRODUCTION 1.1 Background It has been observed that the use of vans for transport of children to school and office workers to their place of work has considerably increased during the past few years. It would appear that the reason, at least in part, for any shift to adopt this mode of transport is in response to the poor service provided by buses, which are very overcrowded in peak periods. Passengers have to wait for several buses before they can board a bus with space. Thus, getting to work or to school in time is very uncertain. Furthermore, school and office girls find it unsafe to travel in overcrowded buses. Some data on school and office vans have been collected as part of Colombo Traffic Study (CTS) and Colombo Urban Transport Study (CUTS) but the scope of these studies has not envisaged detail analysis of these data. 1.2 Terms of Reference The purpose of this study is to asses the importance of school and office van use in the overall transport system in Colombo, the reasons for their appearance and the price and quality of service they offer to their users. The detailed TOR is given in Appendix 1. The assignment was commenced on 13th May 1996 and completed by 12th June 1996. 1.3 Scope of work The study attempts to assess: (i) what percentage of person trips are carried in office and school vans on key corridors during the morning peak. (ii) the rate of growth, if any, of these vans (iii) the reasons for the increase in van use (iv) the typical cost and quality of van service (v) the typical van providers 1.4 Study Area The study area covers the Colombo Metropolitan Region and, more specifically, the CUTS Study area. Due to the very tight schedule the study concentrates on school and office van use in the Colombo Municipal Region. 149 2. CORDON COUNTS OF SCHOOL AND OFFICE VANS Manual counts of van and passenger trips were carried out during the morning peak on key corridors in: (a) the inner cordon (contiguous with the CMC Limits) (b) intermediate cordon (suburbs of Colombo City) (c) outer cordon (edge of metropolitan area). The surveys were carried out at 10 entry points to the City in the inner cordon but at only 3 points in each of the intermediate and outer cordons due to the tight schedule of the study. The survey locations in the inner cordon were: 1. Dehiwela Bridge on Colombo - Galle Road (Route AA2) 2. Pamankade Bridge on Colombo - Horana Road (Route B84) 3. Kirillapone Bridge on Colombo - Ratnapura Road (Route AA4) 4. Sri Lanka Japan Friendship Bridge on Peliyagoda - Puttalam Road (Route AA3) 5. Kelani Bridge on Colombo - Kandy Road (Route AA1) 6. Orugodawatta on Orugodawatta - Ambatale Road (Route B435) 7. Dematagoda on Kolonnawa Road (CMC) 8. Castle Street Hospital on Kollupitiya - Sri Jayawardanapura Road (Route AAO) 9. Ayurvedic Hospital on Cotta Road (CMC) 10. Nawala Junction on Narahenpita - Nawala Road (Route B 307) The 6 survey locations in the intermediate and outer cordons correspond to those in CUTS. The survey locations in the intermediate cordon were: 1. Deaf and Blind School, Ratmalana on Colombo - Galle Road corresponding to P1 in CUTS 2. Werahera on Colombo - Horana Road corresponding and 3. Ambatale on Colombo - Hanwella Road (Low Level Road) corresponding to P8 in CUTS and the survey locations in the outer cordon were: 1. Kudawaskaduwa on Colombo - Galle Road (survey location 01 in CUTS) 2. Kaduwela Bridge on Battaramulla - Kaduwela - Biyagama Road (survey location 07 in CUTS) and 3. Yakkala on Colombo - Kandy Road (survey location 09 in CUTS). 150 The services of 6 final year undergraduates of the University of Moratuwa were engaged for 7 days to carry out the counts. Prior to commencement of the survey, a pilot survey was carried out in the morning peak at the Wellawatta traffic lights on Galle Road which included calibration surveys to correlate visual estimates with actual counts of occupants in the vans. The survey was carried out at 3 locations each day. The survey form used for the purpose is given in Appendix 4. Analysis of the counts at the 16 locations are given in Tables 1-1 to 1-17. The survey revealed that the average occupancy of school vans is 16 and office vans is 12. Most number of school vans (377) enter the city through Kelani Bridge while most office vans (193) enter through Sri Lanka Japan Friendship Bridge (SLJF) in the northern corridor. The total number of school vans entering the city in the morning peak is 1,619 transporting 25,142 children and the total number of office vans is 736 carrying 9,356 office workers. 3. SURVEY OF PARENTS OF SCHOOL VAN USERS Questionnaires were furnished to randomly selected Government and Private Schools in Colombo for distribution to children traveling by school van. Eight out of 46 Govermnent schools in the Colombo South Division and seven out of 22 Private Schools were handed over questionnaire forms. Each school received 50 forms for completion by the parents. The survey was to assess the cost and quality of the service offered by school vans and the reason for their appearance. The following information was collected: (i) location where the child was picked up (ii) location where dropped (iii) cost of van service per month (iv) quality of service (v) No. of persons traveling in the van (vi) Reasons for use of the service The questionnaire distributed to parents is given in Appendix 3. Of 750 questionnaire forms distributed to 15 schools on 20th May 1996, 419 completed questionnaire forms were collected from 27th May 96 to 4th June 96 (i.e. 56%), which is quite a good response. The list of schools and their response is given in Appendix 4. There was a slight disruption to the receipt of the questionnaires as a result of closure of schools due to the complete power cut in the country from Wednesday 29th May to Saturday 1st June 96. The questionnaire was also distributed direct to parents in different neighborhoods through person known to the Consultant. Of 55 questionnaire forms given out, 28 were received by post duly completed (i.e. 51%). 151 Survey data and analysis are given in Tables 2-i to 2-1 1. The survey revealed that the average cost of school van service is Rs. 570/- and the average occupancy of school van is 22. Nearly 80% were satisfied with the quality of service. Of the dissatisfied van users 50% complained of overcrowding of vans. 30% of the parents preferred school van use as it was convenient while over 16% were compelled to shift to van use due to poor public transport and 10% due to non-availability of school buses. Nearly 50% of the vans originated from the adjoining suburbs of Nugegoda, Dehiwela, Ratmalana, Moratuwa, Kelaniya, Maharagama, which are within 20 km. from the city, and 20% from Gampaha, Kaduwela, Homagama and Panadura transport zones, which are at a distance of over 30 km. from Colombo. (The Transport Zones in Western Province is given in Appendix 5). 4. INTERVIEWS OF PARKED VAN DRIVERS 55 drivers of vans parked near schools in Colombo 5, 6, 8 and 10 were interviewed between 20.5.96 and 29.5.96. Analysis of the interviews are given in Tables 3-1 and 3-3. The survey revealed that only 15% were owner drivers. All vans parked near schools operate only school service. Each van serves more than one school and some as much as 6 to 10 schools. Some vans, after dropping children at one school, pick up more children on the way to other schools. It is noted that many of the vans originate from distant regions such as Negombo, Minuwangoda, Kalutara, Kesbewa, Moratuwa, Maharagama and Homagama which are 20 to 30 km. from the city center. The survey revealed occupancy of 17. 5. SURVEY OF OFFICE VAN USERS Questionnaires were distributed to office workers of some larger offices in Colombo through executives and others known to the Consultant. 70 questionnaire forms were furnished to 7 offices and 29 were received by post. The questionnaire was identical to that issued for school van use. Survey data and analysis are given in Tables 4-1 to 4-6. The survey revealed that the average cost of service from adjoining suburbs of Colombo is Rs.650/=. The average occupancy of office vans is 16. Nearly 60% of the van users opt to travel by van due to poor public transport. 80% were satisfied with the quality of service. 6. REVIEW OF ADVERTISEMENTS FOR VAN USERS Advertisements generally appear in the Sunday Observer. Advertisers were reluctant to indicate over the telephone the cost of service in respect of school vans. The survey was thus pursued only in respect of office vans particularly as a detailed survey of parents of school van users was being made through schools. Survey data are given in Table 5. The survey revealed that.the average cost of office van service without the A/C is Rs.670/= for nearby suburbs of Colombo city. The vans are 152 scheduled to reach Colombo by 8:30 a.m. and leave Colombo by 5:00 p.m. Only about 25% are owner driven. 7. GROWTH RATE OF VANS FROM INSURED DATA Since April 1995, a diesel tax was levied for diesel passenger vehicles as diesel fuel price was subsidized essentially for goods and food transport. This tax is payable at the time of payment of the annual vehicle insurance premium and is collected by the Insurance Companies on behalf of Government. Certain categories of vans, such as school and office vans, are eligible for concessionary diesel tax. This concession is granted on production of evidence from the Registrar of Motor Vehicle that the van has been registered as a school or office van. Operators, however are not compelled by law to insure the passengers. As such, vans are not generally insured as school and office vans. It was thus not possible to ascertain the number of school and office vans from the Insurance industry. 8. REGISTRATION OF SCHOOL AND OFFICE VANS School and office vans have been registered only after the introduction of the concessionary diesel tax in April 1995. Scrutiny of the registers of Motor Traffic Department revealed that the number of vans registered each year was as follows: 153 Period School Vans Office Vans 1995 (Monthly 1268 631 records not available) January 96 218 106 February 96 251 152 March 96 211 148 April 96 201 142 May 96 187 149 1996 Total 1068 697 Vehicles are registered in the month insurance in due. Thus, in view of the very short period that school and office vans have been registered, it was not possible to identify growth rate. 9. PERCENTAGE OF PERSON TRIPS CARRIED IN SCHOOL AND OFFICE VANS Due to the tight schedule of the study it was not possible to carry out counts of person trips carried in all passenger vehicles at entry points to city. The person trips in the morning peak were thus derived from survey data of classified counts of vehicular flows carried out by Road Development Authority (RDA) in June 1994 and January 1995 at city entry points. These were updated to June 1996 from the trend growth for each class of passenger vehicle determined by comparing with available data of counts taken by RDA on 31 July 1991. The computed growth rates to June 1996 are given below. GROWTH RATE FROM DATE CARS LARGE MEDIUM MOTOR OF COUNT BUSES BUSES CYCLES June 1994 21% 70% 27% 19% January 1995 06% 12% 10% 06% The person trips at each entry point updated to June 1996 are given in Tables 6-1 TO 6-5. Vehicle occupancy as revealed in the Vehicle Occupancy Survey of the Galle Road Corridor Study carried out by TSPC in relation to Colombo Urban Transport Project is given below. VEHICLE TYPE CAR LARGE BUS MEDIUM BUS MOTOR CYCLE OCCUPANCY 1.5 55 34 1.2 154 The percentage of person trips carried in school and office vans and the percentage of vehicular trips carried in the vans at city entry points, where RDS flow data were available, are given in Table 7. The survey revealed that: (a) the average percentage of person trips carried in school vans entering Colombo in the morning peak is nearly 5% while the percentage of vehicular trips in school vans is around 4%. (b) the average percentage of person trips carried in office vans is around 2% while percentage of vehicular trips in office vans is nearly 3%. 10. GROWTH RATE OF VANS IN SUBURBAN AND OUTER METROPOLITAN AREAS The growth rate of school and office vans traveling in the direction of Colombo in the morning peak was assessed by comparing the counts carried out under CUTS in September 1995 with the cordon counts carried out under this study in end May 1996. The table below gives the growth trends in key corridors in the suburban and other metropolitan areas. LOCATION SCHOOL VAN GROWTH OFFICE VAN TRIPS GROWTH TRIPS RATE RATE SEPT JUNE SEPT. JUNE 1995 1996 1995 1996 _ INTERMEDIATE CORDON RATMALANA 213 217 0% 190 141 -4% WERAHERA 87 130 5% 200 60 -14% AMBATALE 3 39 38% 40 8 -18% OUTER CORDON KUDAWASKA 7 18 13% 24 51 10% DUWA KADUWELA 17 18 1% 16 6 -12% YAKKALA 8 51 26% 42 33 -3% The survey revealed a general growth in school vans operating from these areas but a negative growth rate in office vans during the past 8 months. 155 TABLES 156 Location: Dehiwela Bridge Start Time: 6.00am Road: Colombo Galle Road End Time: 9.00am Date: 21-05-1996 (Tuesday) Direction: To Colombo School Vans Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 6 58 10 0 0 0 6.15 6.30 46 793 18 4 42 10 6.30 6.45 99 1617 17 2 16 8 6.45 7.00 112 1846 17 4 37 9 7.00 7.15 28 414 15 11 203 18 7.15 7.30 4 32 8 31 563 18 7.30 7.45 0 0 8 26 453 17 7.45 8.00 0 0 0 19 377 19 8.00 8.15 0 0 0 16 228 14 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total | 295 | 4760 16 113 1919 17 Table 1-1 157 Location: Pamankada Bridge Start Time: 6.00am Road: Colombo Horana Road End Time: 9.00am Date: 21-05-1996 (Tuesday) Direction: To Colombo l____ School Vans Office Vans Time No. | Passenger | Occupancy No. Passenger Occupancy 6.00 6.15 5 70 14 0 0 0 6.15 6.30 13 159 12 0 0 0 6.30 6.45 49 697 14 1 8 8 6.45 7.00 72 1006 14 3 34 11 7.00 7.15 19 247 13 10 115 11 7.15 7.30 5 60 12 34 417 12 7.30 7.45 2 26 13 25 295 12 7.45 8.00 0 0 0 14 132 9 8.00 8.15 0 0 0 7 66 9 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total I 165 ] 2265 1 14 J 94 | 1067 [ 11 Table 1-2 158 Location: Kirullapone Bridge Start Time: 6.00am Road: Colombo Galle Road End Time: 9.00am Date: 21-05-1996 (Tuesday) Direction: To Colombo School Vans Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 2 16 8 0 0 0 6.15 6.30 17 206 12 0 0 0 6.30 6.45 70 1060 15 1 8 8 6.45 7.00 67 891 13 2 16 8 7.00 7.15 6 63 10 4 42 10 7.15 7.30 2 16 8 9 92 10 7.30 7.45 1 8 8 6 48 8 7.45 8.00 0 0 0 5 50 10 8.00 8.15 0 0 0 4 32 8 8.15 8.30 0 0 0 1 8 8 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 165 2260 14 32 296 9 Table 1-3 159 Location: Japan - Friendship Bridge Start Time: 6.00am Road: Paliyagoda Negombo Road End Time: 9.00am Date: 21-05-1996 (Tuesday) Direction: To Colombo From: Paliyagoda l________ School Vans Office Vans Time No. | Passenger Occupancy No. | Passenger | Occupancy 6.00 6.15 0 0 0 0 0 0 6.15 6.30 21 293 14 6 48 8 6.30 6.45 105 1785 17 18 154 9 6.45 7.00 65 930 14 11 93 9 7.00 7.15 24 307 13 32 426 15 7.15 7.30 3 24 8 44 482 11 7.30 7.45 0 0 0 54 577 11 7.45 8.00 0 0 0 21 218 10 8.00 8.15 0 0 0 5 45 9 8.15 8.30 0 0 0 2 16 8 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total [ 218 3339 15 | 193 | 2059 | 11 Table 1-4 160 Location: Kalani Bridge Start Time: 6.00am Road: Colombo Kandy Road End Time: 9.00am Date: 24-05-1996 (Friday) Direction: To Colombo From: Kalaniya/Kandy School Vans Office Vans Time No. Passenger | Occupancy No. [Passenger | Occupancy 6.00 6.15 3 49 16 0 0 0 6.15 6.30 55 865 16 7 56 8 6.30 6.45 179 2742 15 8 64 8 6.45 7.00 117 1711 15 7 66 9 7.00 7.15 16 218 14 17 181 11 7.15 7.30 5 50 10 30 410 14 7.30 7.45 1 8 8 .36 468 13 7.45 8.00 1 18 18 17 221 13 8.00 8.15 0 0 0 13 149 11 8.15 8.30 0 0 0 5 55 11 8.30 8.45 0 0 0 2 16 8 8.45 9.00 0 0 0 0 0 0 Total 377 5661 15 142 1686 12 Table 1-5 161 Location: Orugodawatta Junction Start Time: 6.00am Road: Avissawella Road (LLR) End Time: 9.00am Date: 24-05-1996 (Friday) Direction: To Colombo From: Wellampitiya School Vans _ Office Vans Time No. J Passenger J Occupancy No. Passenger Occu ancy 6.00 6.15 0 0 0 0 0 0 6.15 6.30 0 0 16 0 0 0 6.30 6.45 3 49 17 0 0 0 6.45 7.00 4 67 0 1 13 13 7.00 7.15 0 0 0 1 8 8 7.15 7.30 0 0 0 0 0 0 7.30 7.45 0 0 0 1 13 13 7.45 8.00 0 0 0 1 8 8 8.00 8.15 0 0 0 1 13 13 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 7 | 116 17 1 5 55 . 11 Table 1-6 162 Location: Dematagoda Junction Start Time: 6.00am Road: Kolonnawa Dematagoda Road End Time: 9.00am Date: 29-05-1996 (Wednesday) Direction: To Colombo From: Kolonnawa 1 School Vans I Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 1 18 18 0 0 0 6.15 6.30 3 49 16 0 0 0 6.30 6.45 21 338 16 0 0 0 6.45 7.00 30 565 19 1 8 8 7.00 7.15 6 113 19 2 26 13 7.15 7.30 0 0 0 0 0 0 7.30 7.45 0 0 0 2 21 10 7.45 8.00 0 0 0 6 68 11 8.00 8.15 0 0 0 3 34 11 8.15 8.30 0 0 0 1 13 13 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 61 1083 | 18 1[ 5 170 | 11 Table 1-7 163 Location: Castle Street Start Time: 6.00am Road: Sri Jayawardanapura Mawatha End Time: 9.00aml Date: 27-05-1996 (Monday) Direction: To Colombo From: Rajagiriya I School Vans Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 0 0 0 0 0 0 6.15 6.30 3 49 16 2 24 12 6.30 6.45 55 1090 20 2 31 16 6.45 7.00 96 1778 19 3 39 13 7.00 7.15 47 836 18 1 18 18 7.15 7.30 31 518 17 12 206 17 7.30 7.45 1 18 18 42 751 18 7.45 8.00 3 49 16 15 265 18 8.00 8.15 0 0 0 5 65 13 8.15 8.30 0 0 0 7 124 18 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 236 4338 18 89 1523 17 Table 1-8 164 Location: Opposite Ayurvhedic Hospital Start Time: 6.00am Road: Boralla Rajagiriya Rd (Cotta Rd) End Time: 9.00am Date: 27-05-1996 (Monday) Direction: To Colombo From: Rajagiriya I _ _ School Vans Office Vans Time No. [ Passenger [ Occupancy No. Passener Occupancy 6.00 6.15 0 0 0 0 0 0 6.15 6.30 0 0 0 0 0 0 6.30 6.45 13 204 16 0 0 0 6.45 7.00 16 263 16 1 8 8 7.00 7.15 10 150 15 2 26 13 7.15 7.30 3 39 13 7 71 10 7.30 7.45 2 26 13 7 71 10 7.45 8.00 0 0 0 5 65 13 8.00 8.15 0 0 0 3 29 10 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total [ 44 682 1 16 f 25 270 J 11 Table 1-9 165 Location: Nawala Start Time: 6.00am Road: Narahenpita Nawala Road End Time: 9.00am Date: 27-05-1996 (Monday) Direction: To Colombo From: Nawala Junction School Vans Office Vans Time No. | Passenger [ Occupancy. No. J Passenger | Occupancy 6.00 6.15 0 0 0 0 0 0 6.15 6.30 3 39 13 0 0 0 6.30 6.45 9 117 13 0 0 0 6.45 7.00 20 260 13 5 45 9 7.00 7.15 9 122 14 4 34 9 7.15 7.30 7 71 11 9 132 15 7.30 7.45 2 21 11 7 76 11 7.45 8.00 0 0 0 3 24 8 8.00 8.15 0 0 0 0 0 0 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 50 630 T 13 [28 [ 311 1 11 Table 1-10 166 Location: Ratmalana (Opp. Deaf& Blind Sch.) Start Time: 6.00am Road: Colombo Galle Road End Time: 9.00aml Date: 28-05-1996 (Tuesday) Direction: To Colombo From: Moratuwa I_____ School Vans Office Vans Time [ No. | Passenger | Occupancy No. Passenger | Occupancy 6.00 6.15 18 209 12 5 50 10 6.15 6.30 71 1013 14 6 63 10 6.30 6.45 75 1115 15 10 10 10 6.45 7.00 37 516 14 16 168 10 7.00 7.15 14 222 16 31 398 13 7.15 7.30 2 31 15 21 213 12 7.30 7.45 0 0 0 18 184 10 7.45 8.00 0 0 0 24 277 12 8.00 8.15 0 0 0 8 89 11 8.15 8.30 0 0 0 2 21 11 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total | 217 [ 3106 [ 14 [ 141 1563 1 11 Table 1-11 167 Location: Werahera Start Time: 6.00am Road: Colombo Horana Road End Time: 9.00am Date: 28-05-1996 (Tuesday) Direction: To Colombo From: Piliyandala 1 School Vans Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 2 12 6 0 0 0 6.15 6.30 48 720 15 0 0 0 6.30 6.45 57 798 14 2 26 13 6.45 7.00 20 300 15 11 118 11 7.00 7.15 3 49 16 16 193 12 7.15 7.30 0 0 0 21 258 12 7.30 7.45 0 0 0 3 49 16 7.45 8.00 0 0 0 4 52 13 8.00 8.15 0 0 0 3 39 13 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 130 1879 | 14 [ 60 735 12 Table 1-12 168 Location: Ambatale Junction Start Time: 6.00am Road: Orugodawatta-Hanwella Rd (LLR) End Time: 9.00am Date: 28-05-1996 (Tuesday) Direction: To Colombo From: Kaduwella l_____ School Vans 1 Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 5 65 13 1 18 18 6.15 6.30 17 266 16 1 13 13 6.30 6.45 12 201 17 3 54 18 6.45 7.00 4 72 18 2 26 13 7.00 7.15 0 0 0 1 18 18 7.15 7.30 1 13 13 0 0 0 7.30 7.45 0 0 0 0 0 0 7.45 8.00 0 0 0 0 0 0 8.00 8.15 0 0 0 0 0 0 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Total 39 | 617 | 16 1 8 ] 129 F 16 Table 1-13 169 Location: Kudawaskaduwa Start Time: 6.00am Road: Colombo Galle Road End Time: 9.00am Date: 23-05-1996 (Thursday) Direction: To Colombo From: Kaluthra School Vans Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 1 13 13 0 0 0 6.15 6.30 1 13 13 2 16 8 6.30 6.45 7 131 19 17 156 9 6.45 7.00 7 106 15 15 145 10 7.00 7.15 1 13 13 6 53 9 7.15 7.30 1 8 8 7 71 10 7.30 7.45 0 0 0 2 21 10 7.45 8.00 0 0 0 1 8 8 8.00 8.15 0 0 0 1 8 8 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 00 0 0 0 Total T 18 284 1 16 [ 51 [ 478 9 Table 1-14 170 Location: Kaduwella Bridge Start Time: 6.00am Road: Kaduwella Biyagama Road End Time: 9.00aml Date: 23-05-1996 (Thursday) Direction: To Colombo From: Biyagama I_____ School Vans Office Vans Time No. Passenger Occupancy No. Passenger Occupancy 6.00 6.15 3 49 17 1 13 13 6.15 6.30 13 234 18 1 18 18 6.30 6.45 0 0 0 1 18 18 6.45 7.00 2 26 13 1 18 18 7.00 7.15 0 0 0 0 0 0 7.15 7.30 0 0 0 0 0 0 7.30 7.45 0 0 0 2 36 18 7.45 8.00 0 0 0 0 0 0 8.00 8.15 0 0 0 0 0 0 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 1 0 0 Total 18 1 309 I 17 1 6 ] 103 17 Table 1-15 171 Location: Yakkala Start Time: 6.00am Road: Colombo Kandy Road End Time: 9.00am Date: 23-05-1996 (Thursday) Direction: To Colombo From: Nittambuwa | School Vans Office Vans Time J No. [Passenger [ Occupancy No. [Passenger Occupancy 6.00 6.15 1 8 8 1 8 8 6.15 6.30 2 21 11 3 34 11 6.30 6.45 4 67 17 3 29 10 6.45 7.00 29 507 17 10 110 11 7.00 7.15 14 202 14 10 120 12 7.15 7.30 1 18 18 2 21 11 7.30 7.45 0 0 0 2 16 8 7.45 8.00 0 0 0 1 13 13 8.00 8.15 0 0 0 1 8 8 8.15 8.30 0 0 0 0 0 0 8.30 8.45 0 0 0 0 0 0 8.45 9.00 0 0 0 0 0 0 Totali 51 | 823 | 16 | 33 [ 359 | 1 Table 1-16 172 CORDON COUNTS - SCHOOL & OFFICE VANS PERSONS ENTERING COLOMBO IN SCHOOL AND OFFICE VANS IN THE MORNING PEAK Location School Van Office Van Vans J Passengers | Vans | Passengers 1. Dehiwela Bridge 295 4760 113 1919 2. Pamankada Bridge 165 2265 94 1067 3. Kirillapone Bridge 165 2260 32 296 4. Sri Lanka Japan Friendship 218 3339 193 2059 Bridge 5. Kelani Bridge 377 5661 142 1686 6. Orugodawatte 7 116 5 55 7. Dematagoda 61 1083 15 170 8. Castle Street 236 4338 89 1523 9. Cotta Road 44 682 25 270 10. Nawala 51 638 28 311 Total 1619 25142 736 9356 Table 1-17 173 SU OFz PARENTS OF SCHOQL VAN USERS SIN PICKEO TVN, ORIGIN ORIGIN DETINATION C..T SATISFACT.RI RAOSNT N.O REASON FOR _____________ ____________ ____________ __ - zo~so. ~~I SATISFACTRY IASRRNO RI VAN USe 13T61 BAMBALAPiI iVA T 0 SI [HMAS PREF 355L Y - 99! BORELLA 0 ST. JOSEPHS 350 Y 17 NOLA 27 KOLLUPITIYA OL 03 0 BISHOPS 350 Y 18 NOT CROWDED 106! 00L 03 .1 ST. JOSEPHS 650 V 20 C 2751 ;CDL03 13 ST BRIDGETS 900 N CROWD 28 EMP 1631 1CDL04 0 LADIES 450 N CROWD 30 C 1112. 'CCL05 0 ~ ST. JOSEPHS S00 N HOLIDAY CHARGE 2 PPT 3291 COLDS 0 'NALANDA 600 N LATE 26 EMP liii COLOS 0 ST. JODSEPHS 400 V 28 .C 127 COLOS5 0 LINDSAY 400 V 30 C 16 COLO05 0 BISHOPS 500 V 20 P 147 COLO05 0 ST THOMAS PREF 450 N DEL VAN 30 PPT 308 COLO05 0 LINDSEY 400 N LONG ROUTE 28 NOSS 171 COLO06 0 AIES5530 NO PV 324 COL 06 0 NALANDA 450 55 COL 06 0 METHODIST 580 V 30 PPT 39 KIRULAPONE CDL 06 0 BISHOPS 500 N CROWD 23 NOT CROWDED 125 CDL06 0 LINDSAY 800 N LATE 20 PPT 1621 COL06 0 LADIES 650 Y 18 ?7 170 ~ COLOS 0 LADIES S00 Y 17 DIR S 159 COL06 0 LADIES 400 Y 17 PPT 8 IWELLAWATTA 1CDL06 0 ST.PAULS 350 V 20 1401 1CDL07 0 ST THOMAS PREr 400 N CROWD 17 C 4351 D 06 0 6stHDPS 500 Y 10 0 33~~~~~~~~! 'CDL 08 0 NALANDA 450 Y 20 C~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ALN2 4241 i~~COLOS8 0 ST THOMAS PREPI 6001 N LATE 15 5 2731 COLO 08 ST BRIDGETS 2501 V 15 EM~P 2511 COLDS8 0 ST SRIOGETS 4001 N CROWD 24 DIR S 274' 1CDL 08 0 ~ ST ERIDGETS 5005 274; ~ ~ 'DL100 IST ERIDGETS 5010 N CROWD 21 5 320 'CDL 12 0 ITHURSTAN N CROwD 18 NOT ALLOWED 981 ~ CDL 13 0 !METHODIST 490 V 20 PUNC I137 ~ ICDL13 i 0 1ST THOMAS PREP! 500 V 25 0 1741 CDL13 0 iLADIES 500 Y 30 5 101 1CDL13 0 BI1SHOPS 500! Y 31 1 194 ~ COL 13 0 ~ LADIES 6001 C 175i CLALIE 50! 30 5 59i C01-15 ~ ~~~~0 METHODIST i 550 34PN E1 I MATTAKKULIYA CDL 15 0 !METHODIST I5501 Y 34- 43so ~ ~ ~~POL 15 0 !~~~~ST. JOSEP HS 45 138! COQLl 0ITTHMS RP 0 25 C 291: CDL 15 0 WdESLEY 550 V 28 EMP 436. ~ CDL 15 0 ~ BISHOPS 500 V 10 C I286i "COL 15 ' 0 WVESLEY 550 Y 20 DUIKER 21 'OEMATAGOOA 0 ~ METHODIST 3751 V 25 PPT 260 IHAVELOCK TOWN 0 [ST ERDGTS 50o 23 PUNC 87' IHAVELOCK< TOWN 0 IST. JOSEPHIS 1075 N LATE 25 C 2 KIRUCAPONA ~~ ~~~~~~~~ ~~0 ST.PAULS 250 Y 30 s 2991 MATTAKKULIYA 0 iWESLEY 4001 V 29 C 365j INARAtHENPlTA 0 MHNNA 40 Y2 433, iNARAHENPITA 0 'SeeV 500 N CROWD 30 NOA 3101 INARAHENPITA i 0 'LINDSEY 400 H COSTLY 30 NO CROWD 31 j IPELIYAGODA 0 BISHOPS 500 Y j 22 C 3221 ieELLANVILA 1 iTHURSTAN 500 N I COSTLY 40 NOCROWO 4141 'DHWLi 1 LADIES 600 N REzCKLESS DRIVING 27 C 2011 DEHIWALA 1 ANANDA 00 Y 25 DIR S 119 ~~~DEHIWALA 1 UNDSAY Y is1 77 2:91 IEIW 1 WVESLEY 550 Y PPT 1 2 IDEHIWALA I~~~~ 1DEVI EALIKA 450 Y 15 QUIKER 155! DOEHIWALA 1 'LDIES 600 N CROWD 30 NO PV 3421 DEHIWALA ' 1 DOEVI EALIKA 550 Y 15 PPT 3771 iDEHIWALA 1 M ANAA 500 N LATE 30 C 3791 DE LA ~~1 MIAHANAMA 500 Y [18 5 3681 DEHIWALA I MAHANAMA 500 Y 20 C 3331 i~~DEHIWALA 1 NALANDA 700 Y ' 17 PPT 362,EHWL 1 iMAHANAMA- 550 Y 35 PUNC 1651 DEHIWALA 1 ~ LADIES S0o V 5 P 404! ~~~~~~~DEHIWALA ' I AHNM 550 V PPT 386! DEHIWALA I 1 [MAHANAMA 500 Y 2 PPT 256i 'HWALA ! 1 'TBRIDGE-TS 550 N CROWD 30 NOT ALLOWED 301! DEIAA1 WESLEY 690 Y 30 LONG DIST 40: ~~~~~~~DEHIWALA I ETHODIST 500 N LALTE 25 0 14471 EIWL ST BRIDGETS 500 Y 20 DIR S 256!1 DEHIWALA 1 ST BRIDGETS 6001 N 1 CROWD 22 NOT ALLOWED 62! DEHIWALA i 1 METHODIST 500 V 22 PUNC 363[ DEiWLI MAHANAMA 5001 V 8 2931 DEHIWALA 1 WSL.EY 6501 V 20 NDOCROWD 309 'DEHIWALA I LINDSEY .450 Y 22 C 721 DEHIWALA 1 MTOIT 450 V 20 5 381 IDEHIWALA I AAAA 500 V 'SDR 412. DEHIWALA - AIS600 Y 10 C 3211 KALUBOWILA 1SHooA 50 Y 22 NOSB 261 IKALUBOWLA 50 BSHPSN CROwD 23 c IKAWDANA 1 MAAMA '550 V ! 0 P5 3061 KOHUWALA 1 ELY500 V 135 ~~~~~~=2& >=5& >=10 Aver- Maxi- Aver- Maxi- household -age *rnum <5 <10 -age -mum -age -mum Primary School 0.81 1.5 8.0 81% 19% 0.18 1.25 0.75 1.50 Post Office 0.88 2.9 19.2 77% 17% 6% 0.24 1.00 2.00 6.25 Dispensary 0.21 4.6 12.8 43% 42% 15% 0.45 2.00 2.00 4.50 Secondary School 0.71 5.7 38.4 61% 18% 8% 13% 0.43 2.00 3.00 9.50 Bank 0.65 10.4 25.6 16% 36% 27% 21% 0.60 1.75 4.00 6.75 MarketVPola 0.99 10.6 36.8 24% 29% 29% 18% 0.75 2.50 4.00 9.25 Physician 0.20 10.9 72.0 29% 38% 10% 23% 0.77 2.50 4.00 15.50 Hospital 0.88 11.1 102.4 23% 31% 27% 19% 0.65 3.50 4.50 22.50 Police Station 0.74 12.5 28.8 20% 34% 27% 19% 0.72 1.75 4.50 7.25 * Consultants calculation of travel cost in the event the travel mode is the bus. Source: RDSC: "Rural Transport Policy Study/ (1992), Hambantota D.S. Division (p.25) and Consultants estimates. 392 Table 6.3.4 (2) Transport to obtain Services - Akuressa DS Division - 1992 Service Users Distance Distance Time hrs * One-way (km) (km) Fare (Rs) per Aver- Maxi- <2 >=2& >=5& >1 0 Aver- Maxi- Aver- Maxi- household -age -mum <5 <10 -age -mum -age -mum Primary School 0.84 2.0 11.2 74% 25% 1 % 0.47 1.50 0.75 2.00 Post Office 1.05 2.8 16.0 69% 22% 9% 0.52 3.25 2.00 5.75 Physician 0.26 4.2 56.0 48% 35% 13% 4% 0.55 3.50 2.00 13.75 Dispensary 0.46 5.7 25.6 29% 46% 22% 3% 0.49 2.00 3.00 7.25 Secondary School 0.63 6.5 56.0 40% 29% 21% 10% 0.68 3.25 3.00 13.75 Police Station 0.56 7.2 16.0 12% 46% 41% 1 % 0.74 3.25 3.50 5.75 Market/Pola 0.93 7.2 16.0 13% 46% 39% 2% 0.76 3.25 3.50 5.75 Hospital 0.67 7.6 16.0 13% 38% 46% 3% 0.86 3.25 3.50 5.75 Bank 1.17 16.3 56.0 4% 31% 32% 35%1 1.12 4.00 5.75 13.75 * Consultants calculation of travel cost in the event the travel mode is the bus. Source: RDSC: "Rural Transport Policy Study" (1992), Akuressa D.S. Division (p.15) and Consultants estimates. 393 Table 6.3.4 (3) Transport to obtain Services - Dehiowita DS Division - 1993 Service Users Distance Distance Time hrs One-way (km) (km) Fare (Rs) per Aver- Maxi- <2 >=2& >=5& >=10 Aver- Maxi- Aver- Maxi- household -age -mum <5 <10 -age -mum -age -mum Primary School 0.58 0.9 5.6 98% 2% 0.03 0.75 0.75 1.50 Post Office 1.87 2.5 12.0 68% 28% 4% 0.25 1.00 2.00 4.00 Physician 0.11 2.8 13.6 72% 21% 7% 0.19 1.00 2.00 4.00 Secondary School 0.59 5.8 37.6 34% 47% 15% 4% 0.60 2.50 3.00 7.25 Dispensary 1.11 8.4 28.0 18% 40% 34% 8% 0.72 2.00 3.50 6.25 Police Station 0.37 10.7 28.0 8% 29% 47% 16% 0.94 3.00 4.00 6.25 Market/Pola 0.92 10.4 26.4 8% 29% 48% 15% 0.89 3.00 4.00 6.00 Bank 0.58 9.8 28.0 10% 32% 45% 13% 0.96 3.00 3.50 6.25 Hospital 1.10 11.8 42.4 9% 26% 46% 19% 0.94 3.00 4.00 9.00 Law Courts 0.21 12.4 36.0 5% 29% 49% 17% 1.00 2.50 4.00 7.25 * Consultants calculation of travel cost in the event the travel mode is the bus. Source: RDSC: "Rural Transport Policy Study" (1993), Dehiowita D.S. Division (p.16) and Consultants estimates. 394 Table 6.3.4 (4) Transport to obtain Services - Rajanganya DS Division - 1993 Service Users Distance Distance Time hrs * One-way (km) (km) Fare (Rs) per Aver- Maxi- <2 >=2& >=5& >=10 Aver- Maxi- Aver- Maxi- household -age -mum <5 <10 -age -mum -age -mum Primary School 0.18 0.99 4.8 95% 5% 0.14 0.25 0.75 1.50 Post Office 1.34 3.04 19.2 61% 28% 11% 1 % 0.26 1.50 2.00 7.00 Physician 0.16 3.15 36.8 68% 22% 10% 0.27 1.50 2.00 11.80 Dispensary 0.30 3.58 38.4 56% 32% 10% 2% 0.25 2.00 2.00 11.75 Market/Pola 1.09 4.08 19.2 48% 35% 15% 2% 0.32 1.50 3.00 7.00 Secondary School 0.93 4.67 40.0 63% 18% 13% 6% 0.34 2.50 3.00 12.00 Hospital 0.89 7.47 38.4 29% 40% 21% 10% 0.46 2.50 3.50 11.75 Bank 1.09 10.98 38.4 7% 10% 68% 15% 0.62 1.75 4.50 11.75 Police Station 0.99 11.81 27.2 10% 72% 18% 0.67 1.75 4.50 9.00 * Consultants calculation of travel cost in the event the travel mode is the bus. Source: RDSC: "Rural Transport Policy Study", Rajanganya D.S. Division and Consultants estimates. 395 Table 6.4.1 (1) Goods Transportation Transport of Agricultural Produce to Market Hambantota DS Division (28 GN Divisions) Mode House Distance (km) Time hours holds % Mean Max Mean Max foot 5% 2.6 9.6 0.8 3.0 cart 4% 8.3 12.8 2.7 4.0 hand tractor 15% 8.0 35.2 1.5 5.5 bicycle 8% 6.6 19.2 0.7 2.5 tractor 17% 12.0 40.0 0.6 1.5 bus 22% 15.2 28.8 0.8 3.8 lorry 11% 52.8 144.8 1.5 1.5 sell at farmgate 16% 0.0 0.0 0.0 0.0 motorcycle 1% 11.2 11.2 0.0 0.0 Source: RDSC "Rural Transport Policy Study" (1992), Hambantota DS Division, p. 23 396 Table 6.4.1 (2) Dehiowita DS DMsion (38 GN DMsions) Mode House Distance (knm) Time hours holds % Mean Max Mean Max foot 29.0% 2.20 8.05 0.29 1.0 bicycle 14.6% 2.96 9.66 0.48 1.0 tractor 2.0% 6.03 8.05 0.30 0.5 bus/foot 51.6% 10.70 27.20 0.56 1.0 van/lorry 2.8% 7.80 9,66 0.45 0.5 Overall mean 6.97 0.54 Source: RDSC: "Rural Transport Policy Study (1993), Dehiowita DS Division, p.13 397 Table 6.4.1.(3) Goods Transportation Transport of Agricultural Produce to Market Akuress DS Division (70 GN Divisions) Mode House Distance (km) Time hours holds . % Mean Max Mean Max foot 35.5% 1.8 8.0 0.83 2.50 hand tractor 16.3% 2.2 12.8 0.76 2.00 bicycle 26.7% 1.7 12.8 0.52 1.50 tractor 0.9% 7.1 17.6 0.23 1.25 bus 14.4% 1.7 24.0 0.29 1.00 truck 1.8% 9.7 13.6 1.25 1.00 sell at farmgate 4.1% motorcycle 0.3% 2.2 4.8 0.43 1.00 1.6 0.43 Source: RDSC "Rural Transport Policy Study" (1992), Akuressa DS Division, p.13 398 Table 6.4.1 (4) Rajanganaya DS Division (21 GN Divisions) Mode House Distance km Time hours holds % Mean Max Mean Max foot 1.1% 0.75 1.0 0.50 0.5 hand tractor 87.7% 1.34 5.0 0.72 2.0 tractor 7.5% 1.70 5.0 0.45 1.0 bicycle 3.7% 1.07 1.5 0.32 0.5 Overall mean . 1.35 0.68 Source: RDSC: "Rural Transport Policy Study" (1993), Rajanganya DS Division 399 Table 6.4.1 (5) Goods Transportation Transport of Agricultural Inputs Hambantota DS Division (28 GN Divisions) House Distance (km) Time hours holds % Mean Max Mean Max foot 2% 5.4 11.2 1.8 3.5 hand tractor 14% 5.8 6.4 0.8 1.0 bicycle 29% 0.7 14.4 0.3 1.5 tractor 2% 15.0 22.4 0.9 1.5 bus 51% 12.6 64.0 0.5 3.0 motorcycle 2% 7.7 11.2 0.1 0.3 Source: RDSC: "Rural Transport Policy Study" (1992), Hambantota DS Division, p.20 400 Table 6.4.1 (6) Dehiowita DS Division (38 GN Divisions} Mode House Distance (km) Time hours holds % Mean Max Mean Max foot 52.8% 2.10 7.24 0.27 1.0 bicycle 13.4% 2.65 8.90 0.23 0.5 bus/foot 31.3% 9.49 22.40 0.60 1.5 van 2.4% 7.40 6.40 0.25 0.3 Overall mean_ 4.58 0.37 Source: RDSC "Rural Transport Policy Study" (1993), Dehiowita DS Division, p.11 401 Table 6.4.1 (7) Goods Transportation Transport of Agricultural Inputs Akuress DS Division (70 GN Divisions) Mode House Distance (km) Time hours holds % Mean Max Mean Max foot 27.7% 1.1 2.4 0.62 1.50 hand tractor 17.1% 5.8 12.8 0.93 2.00 bicycle 35.2% 2.6 12.8 0.42 1.00 bus 14.0% 6.8 13.6 0.17 1.00 tractor 1.9% 3.9 4.8 0.40 0.50 motorcycle 0.5% 5.6 12.8 0.22 0.50 truck 0.3% 9.6 9.6 0.75 0.75 hiring car 1.5% 11.2 11.2 0.75 0.75 from vendors 1.7% Overall Mean 3.4 0.52 Source: RDSC: "Rural Transport Policy Study" (1992), Akuressa DS Division, p.13 402 Table 6.4.1 (8) Rajanganaya DS Division (21 GN Divisions) Mode House Distance (km) Time hours holds % Mean Max Mean Max handtractor 52.8% 2.10 7.24 0.27 1.00 bicycle 13.4% 2.65 8.90 0.23 0.50 motor cycle 31.3% 9.49 22.40 0.60 1.50 van 2.4% 7.40 6.40 0.25 0.25 Overall mean 4.58 0.37 Source RDSC: "Rural Transport Policy Study", (1993), Rajanganya DS Division 403 Table 6.4.1 (9) Goods Transportation Transport of Paddy for Milling Hambantota DS Division (28 GN Divisions) Mode House Distance (km) Time hours holds % Mean Max Mean foot 13% 1.0 3.2 0.2 1.0 hand tractor 0% 3.2 3.2 0.5 0.5 bicycle 66% 2.7 9.6 0.1 1.0 tractor 4% 25.6 25.6 1.5 1.5 bus 10% 24.5 31.4 0.7 1.0 motor cycle 7% 10.7 11.2 0.0 0.0 Source: RDSC "Rural Transport Policy Study" (1992), Hambantota DS Division, p.22 404 Table 6.4.1 (10) Dehiowita DS Division (38 GN Divisions) Mode House Distance (km) Time hours holds % Mean Max Mean Max foot 55.0% 2.15 8.85 0.25 1.0 bicycle 16.4% 4.44 6.44 0.40 0.5 bus/foot 28.1% 9.80 27.40 0.52 1.0 motor cycle 0.5% 3.22 8.05 0.50 0.5 Overall mean 4.68 0.35 Source: RDSC "Rural Transport Policy Study" (1 993), Dehiowita DS Division, p.12 405 Table 6.4.1 (11) Goods Transportation Transport of Paddy for Milling Akuressa Division (70 GN Divisions) Mode House Distance (km) Time hours holds % Mean Max Mean Max foot 47.0% 1.5 6.4 0.60 2.0 hand tractor 3.2% 8.1 9.6 0.76 1.25 bicycle 46.2% 2.0 7.2 0.28 1.0 tractor 0.5% 9.2 9.6 0.71 0.75 bus 1.9% 4.8 8.0 0.22 0.5 motor cycle 1.30% 1.6 3.2 0.31 0.5 Overall mean 0.9 0.37 Source: RDSC: "Rural Transport Policy Study" (1992), Akuressa DS division, p.12 Note Information not available for Rajanganaya. 406 Table 7.3.1 Average Monthly Household income - 1990/91 Sector Average Monthly Income Average no of Income (Rs) Receivers Per Per Per Household Income Receiver Household All Island 3549 1778 1.99 Urban 5741 2855 1.96 Rural 3057 1559 1.96 Estate 2429 1048 2.30 Source: Household Income and expenditure Survey, 1990/91, Final Report, Dept. of Census & Statistics, p.19 (Table 3.6), p.24 and Consultants Calculations. 407 Table 7.3.3 Distribution of Income Receivers by Income Group - 1986/87 Income Group (Rs) Sector 0 - 1501- 3000- 5000 Over 'Total 1500 3000 5000 10000 10000 Colombo Municipal Area 45.3 28.6 11.5 8.8 5.8 100 Urban Sector 44.1 30.3 13.8 7.9 3.9 100 Rural Sector 65.2 23.8 6.5 3.2 1.3 100 Estate Sector 92.8 6.3 0.7 0.2 100 All Sectors 64.2 23.1 7.3 3.7 1.7 100 Source: Consumer Finances and Socio-Economic Survey - 1986187 as reported by Dheerasinghe et al., "Report of the Committee on Transport Fares", p.48 408 Table 7.4.1 Average Monthly Household Income - 1990/91 - All Sectors Average Monthly Average Monthly Median Household Income (Rs) Income (Rs) (Rs) Components Province District Per Per Per House Earners Members House Income Capita hold hold Receiver Income Sri Lanka 3549 1778 708 2447 2.0 5.0 Southern Hambantota 2755 1218 515 2124 2.3 5.3 Matara 3148 1495 590 2146 2.1 5.3 Sabaragamuwa Kegalle 3209 1413 650 2318 2.3 4.9 North Central Anuradhapura 2599 1451 541 2066 1.8 4.8 Sector Rural 3057 1559 614 - 2.0 5.0 Estate 2429 1048 514 2.3 4.7 Urban 5741 2855 1096 2.0 5.2 Source: The Household Income and Expenditure Survey (1990/91), Final Report, p.19, p.21, p.24, Dept. of Census & Statistics and Consultants Calculations 409 Table 7.5.1 (1) Monthly Household Income (Rs) - Dehiowita Divisional Secretary's Division - 1993 % Range of Income Group (Rs) Households Total in Grama < 1000 1000-3000 > 3000 House Niladad GN HH GN HH GN HH Holds Divisions > 75% 12 3763 2 1418 - - 5181 50 - 75% 17 3916 4 897 - - 4813 25 - 50% 4 532 12 1811 3 650 2993 < 25% 4 498 20 1207 32 897 2602 > 0% 1 3 Total 38 8709 38 5333 38 1547 15589 Percentage 55.9 34.2 9.9 100 Source: RDSC: "Rural Transport Study", (1993), Dehiowita DS Division, pr.14 and Consultants Calculations. 410 Table 7.5.1 (2) Monthly Household Income (Rs) - Rajanganaya Divisional Secretary's Division - 1993 % Range of Income Group (Rs) _ _ _ Households Total in Grama < 750 750-1500 > 1500 House Niladari GN HH GN HH GN HH Holds Divisions > 75% 2 696 696 50 - 75% 6 1074 3 638 2 323 2035 25 - 50% 13 1783 8 1107 6 657 3547 < 25% - 10 465 13 529 994 Total 21 3553 21 2210 21 1509 7272 Percentage 48.9 30.4 20.7 100 Source: RDSC, and Consulatants Calculations. 411 Table 7.6.1 Percentage of Household Income Spent in Transport by Income Group -1986/87 Income of spending unit per month (Rs) Sector 0 - 1501 - 3000 - 5000 Over 1500 3000 5000 10000 10000 Colombo Municipal Area 4.0 3.4 3.3 3.8 5.2 Urban Sector 2.7 3.9 4.0 4.0 5.6 Rural Sector 3.6 4.1 4.8 6.1 5.2 Estate Sector 2.7 2.1 2.0 - All Sectors 3.3 3.8 4.4 5.8 5.5 Source: Consumer Finances and Socio-Economic Survey - 1986/87 as reported by Dheerasinghe et al, "Report of the Committee on Transport Fares", p.45 Table 7.7.1 (1) Provision of subsidised bus services - Dehiowita Divisional Secretary's Division Bus Operator: Avissawela Passenger Transport Company Business Services (October 1995) GN Division House Monthly Household holds Income Group (Rs) School Route Routes Route Bus Passen- APJ Subsidy Season Less % 1000 % Over % No Origin - Length Trips ngers Revenue Than -3000 3000 Destination km Oneway km Rs Rs 1000 Ihala Talduwa 363 170 47.0 113 31.0 80 22.0 Uduwila 279 140 50.0 110 39.0 29 11.0 Debagama 465 349 75.0 93 20.0 23 5.0 Atalugama 394 339 86.0 40 10.0 15 4.0 60711 Ihala Talduwa - Kanangama 12.6 3 5709 6.2 4479 3015 Total 1501 998 356 147 Maniyangama 285 206 72.0 68 24.0 11 4.0 Bomaluwa 298 172 58.0 69 23.0 57 19.0 Viharakanda 288 /221 77.0 67 23.0 - Rangegama 575 '125 22.0 300 52.0 150 26.0 Panawala 475 150 32,0 225 47.0 100 21.0 Pukunuwala 358 250 70.0 105 29.0 3 1.0 Ambanptiya 357 270 76.0 47 13.0 40 11.0 Godagampola 525 126 24.0 397 75.0 2 1.0 Ambalankande - East 301 112 37.0 176 58.0 13 5.0 Ambalankande - West 356 308 86.0 45 13.0 3 1.0 608/1 Avissawella - Hingurala 23.0 8 13050 10.2 3561 2126 Total 3818 1940 1499 379 Kande Algoda 419 97 23.0 301 72.0 21 5.0 Batangala 593 372 63.0 199 33.0 22 4.0 Panawala 475 150 32.0 225 47.0 100 21.0 Pukunuwala 358 250 70.0 105 29.0 3 1.0 Madagammana 173 110 64.0 23 13.0 40 23.0 701 DehiowRta - Ehatiyagoda 17.6 11 31606 8.7 15061 1398 Total 2018 979 853 186 Godagampola 525 126 24.0 397 75.0 2 1.0 Pannila 351 323 92.0 25 7.3 3 1.0 611/1 Eheliyagoda - Pannila 15.6 5 8523 8.0 867 2968 Total 876 449 422 5 Table 7.7.1 (1) Continued. Provision of subsidised bus services - Dehiowita Divisional Secretary's Division Bus Operator: Awissawella Passenger Transport Company Bus Services (October 1995) GN Division House Monthly Househould holds Income Group (Rs) School Route Routes Route Bus Passen- APJ Subsidy Season Less % 1000 % Over % No Origin - Length Trips gers Revenue Than -3000 3000 Destination ktn Oneway km Rs Rs I 1000 Maniyangama 285 206 72.0 68 24.0 11 4.0 Welangaila 547 402 74.0 128 23.0 17 3.0 608/2 Avissawella - Welangalba 6.5 9 12769 3.9 4280 1478 Total 832 608 196 28 Napawala 483 285 59.0 100 21.9 98 20.0 Daigala 186 127 68.0 59 32.0 - 609 Avissawella - Dalgala 10.4 9 25711 6.5 3418 3435 Total 669 412 159 98 Manlyangama 285 1!06 72.0 68 24.0 11 4.0 Bomaluwa 298 172 58.0 69 23.0 57 19.0 Viharakanda 288 221 77.0 67 23.0 - Rangegama 575 125 22.0 300 52.0 150 26.0 Panawala 475 150 32.0 225 47.0 100 21.0 608 Avissawela - Panawala 11.5 18 5441 7.3 1425 Total 1921 874 729 318 Madagammana 173 110 64.0 23 13.0 40 23.0 Pukunuwala 358 250 70.0 105 29.0 3 1.0 Ambalanpitiya 357 270 76.0 47 13.0 40 11.0 ImbulpiUya 330 176 53.0 102 31.0 52 16.0 .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 611 Eheliyagoda - Udaimbul- 21.5 11 26809 12.4 18772 948 Total 1218 806 277 135 pitiya Total 74 178618 50438 16793 12853 7066 4491 1296 Note: APJ: Average Passenger Joumey Passengers may not all be from these GN Divisions Source: NTC (Bus Services). RDSC (Households and Income) and Consultants Calculations. Table 7.7.1 (2) Provision of subsidised bus services - Hambantota Divisional Secretary's Division Bus Operator: Ambalantota Passenger Transport Company Bus Services (October 1995) GN Division House Monthly Household holds Income Group (Rs) Route Route Route Bus Passen- APJ Subsidy School Less % 1000 % Over % No Origin - Length Trips gers Season Revenue Than -3000 3000 Destination km Oneway km Rs Rs 1000 - - Galwewa 332 290 87.0 42 13.0 - {300 Hambantota - Suriyawewa 42.5 6 11338 22.3 12175 2775 Gonnoruwa 219 164 75.0 44 20.0 11 5.0 Elalle 389 389 100.0 - - - - Kallyapura 147 20 14.0 101 69.0 26 17.0 336 Hambalantota - Badagiriya 19.6 12 33448 14.3 19079 2378 Badagiriya 306 76 25.0 199 65.0 31 10.0 Bundala 182 74 41.0 82 45.0 26 14.0 {531 Hambantota - Galketiya Ferry 27.1 1 991 14.4 4918 _ Siryagama 216 151 70.0 17 8,0 48 22.0 TOTAL 19 45777 36172 5153 1791 1164 485 142 Note: APJ : Average Passenger Journey Passengers may not all be from these GN Divisions Source: NTC (Bus Services), RDSC (Households and Income) and Consultants Calculations. Bus Services (October 1996) GN Division House Monthly Household holds Income Group (Rs) School Route Route Route Bus Passen- APJ Subsidy Season Less % 760 % Over % No Origin - Length Trips gers Revenue Than -1600 1500 Destination km Oneway km Rs Rs 750 Kalundegama 210 95 45.0 77 37.0 38 18.0 (978/2 Anuradhapura - Puttalam Junction 49.3 4 19158 19.8 3816 1821 Panthiyaya 282 95 34.0 145 51.0 42 15.0 Sirimapura 248 94 38.0 79 32.0 75 30.0 978/3 Anuradhapura - Gemunupura 42.2 3 18289 19.7 1895 1755 978/2 Anuradhapura - Puttalam Junction 49.3 4 19158 19.8 3816 1821 Intermediate Zone 570 456 80.0 86 15.0 28 5.0 978/5 Anuradhapura - Rajanganaya 40.6 2 15443 18.7 1859 630 Yaya 01 165 110 67.0 40 24.0 15 9.0 Yaya 4 542/2^ Galgamuwa - Perakumpura 35.2 3 14159 24.6 3589 1945 Yaya 02/Naigala 414 102 25.0 176 43.0 136 33.0 978/5 Anuradhapura - Rajanganaya 40.6 2 15443 18.7 1859 630 Yaya 03 325 80 25.0 64 20.0 181 56.0 Yaya 4 ( Yaya 04 334 140 42.0 154 46.0 40 12.0 Yaya 05/Tissapura 235 70 30.0 23 10.0 142 60.0 Yaya 05/Randenigama 281 130 46.0 96 34.0 55 20.0 Yaya 06/Angamuwa 280 120 43.0 60 21.0 100 36.0 Yaya 06/Tubullegama 210 120 57.0 30 14.0 60 29.0 Yaya 07 345 197 57.0 84 24.0 64 19.0 Yaya 08 402 225 56.0 100 25.0 77 19.0 Yaya 09/10 485 250 52.0 50 10.0 185 38.0 978/2 Anuradhapura - Puttalam Junction 49.3 4 19158 19.8 3816 1420 Yaya 11 296 172 58.0 23 8.0 101 34.0 Yaya 12 305 120 39.0 165 54.0 20 7.0 Yaya 13/14 485 230 47.0 225 46.0 30 6.0 Yaya 18 280 240 86.0 5 2.0 35 13.0 Yaya 15/Adikaripura 495 235 47.0 200 40.0 60 12.0 Yaya 16/17 625 272 44.0 328 52.0 25 4.0 TOTAL 22 120808 20650 10022 7272 3553 2210 1509 Operated by Galgamuwa PTS Ltd. Note: APJ : Average Passenger Journey Passengers may not all be from GN Divisions. Source: NTC (Bus Services), ROSC (Households and Income) and Consultants Calculations. Table 7.7.7 Average Monthly Household ExpendIture & Income -19901911 KEGALLE MATARA HAMBANTOTA ANURADHAPURA ALL SRI LANKA Rs A B C Rs A B C Rs A B C Re A B C Rs A B C Membes/Houeehold 4.94 .t34 5.35 4.;0 5.01 GENERAL Personal Care 45.25 14 1.2 11.0 48.09 1.5 1.3 8.8 84.40 2.0 1.6 12.2 48.14 1.9 1.6 14.0 55.58 1.6 1.4 10.0 Cultural 33.42 1.0 0.9 8.1 23.54 0.7 0.6 4.5 20.26 0.7 0.6 4.6 17.85 0.7 0.6 5.2 33.60 1.0 0.9 6.1 Household Services 13.05 0.4 0.4 3.2 21.39 0.7 0.6 4.1 12.66 0.5 0.4 2.8 8.79 0.3 0.3 2.6 19.12 0.6 0.5 3.5 Communications 7.19 0.2 0.2 1.7 3.01 0.1 0.1 0.6 3.98 0.1 0.1 0.9 3.34 0.1 0.1 1.0 9.40 0.3 0.2 1.7 ConsumerDurables 31.82 1.0 0.9 7.7 78.56 2.5 2.1 14.9 38.59 1.4 1.1 8.7 37.13 1.4 1.2 10.8 53.24 1.5 1.4 9.6 Non-Consumption 40.39 1.3 1.1 9.6 58.31 1.9 1.6 11.1 41.83 1.5 1.2 9.4 25.85 1.0 0.8 7.5 84.68 2.4 2.2 15.3 Micellaneous 28.97 0.9 0.8 7.0 78.45 2.5 2.1 14.9 51.45 1.9 1.5 11.6 19.72 0.8 0.6 5.7 49.43 1.4 1.3 6.9 Others 54.98 1.7 1.5 13.4 71.20 2.3 1.9 13.5 61.28 2.2 1.8 13.8 73.33 2.8 2.4 21.3 65.57 1.9 1.7 11.8 Total 255.07 7.9 7,0 62.0 380.55 12.1 10.4 72.4 284.45 10.3 8.2 63.9 234.15 9.0 7.7 68.0 370.60 10.7 9.5 67.0 TRANAPORT Pnvate Vehides 75.44 2.4 2.1 18.3 72.02 2.3 2.0 13.7 91.20 3.3 2.6 20.5 60.09 2.3 2.0 17.4. 90.76 2.6 2.3 16.4 OtherTransport 80.68 2.5 2.2 19.7 73.11 2.3 2.0 13.9 69.61 2.5 2.0 15.6 50.20 1.9 1.6 14.6 92.17 2.7 2.4 16.7 Totad 156.32 4.9 4.3 38.0 145.13 4.6 4.0 27.6 160.81 5.8 4.6 36.1 110.29 4.2 3.6 32.0 182.93 5.3 4.7 33.0 TOTALDISCRETIONAF 411.39 12.6 11.3 100.0 525.68 16.7 14.4 100.0 445.26 16.2 12.9 100.0 344.44 13.3 11.3 100.0 553.53 16.0 14.2 100.0 ESSENTIAL NON FOOD Housing 244.68 7.6 6.7 205.62 6.5 5.6 160.70 5.8 4.6 161.25 6.2 5.3 340.15 9.8 8.7 Fuel & Light 139.50 4.3 3.8 143.38 4.6 3.9 145.17 5.3 4.2 178.80 6.9 5.9 179.67 5,2 4.6 Clothing 136.66 4.3 3.8 156.20 5.0 4.3 149.45 5.4 4.3 140.80 5.4 4.6 152.39 4.4 3.9 Education 73.40 2.3 2.0 73.62 2.3 2.0 54.87 2.0 1.6 52.21 2.0 1.7 66.30 1.9 1.7 Health 70.97 2.2 2.0 128.90 4.1 3.5 88.94 3.2 2.6 82.81 3.2 2.7 92.06 2.7 2.4 Total 665.19 20.7 18.3 707.72 22.5 19.3 599.13 21.7 17.3 615.87 23.7 20.2 630.57 24.0 21.3 TOTAL NON FOOD 1,076.58 33.6 29.7 1,233.40 39.2 33.7 1,044.39 37.9 30.2 960.31 36.9 31.6 1,384.10 40.0 35.4 EOOD 2.550.00 79.5 70.3 2,428.00 77.1 66.3 2,417.00 87.7 69.8 2,083.00 80.1 68.4 2,521.00 72.8 64.6 TOTAL EXPENDITURE 3,626.58 113.0 100.0 3,661.40 116.3 100.0 3.461.39 125.6 100.0 3,043.31 117.1 100.0 3,905.10 112.8 100.0 LESS OVER SPENDING (418.00) (13.0) (512.00) (16.3) (706.00) (25.6) (444.00) (17.11) (444.00) (12.8) INCOMAtE 3,208.58 100.0 3,149.40 100.0 2,755.39 100.0 2,599.31 1000 3.461.10 100.0 OtWlTTtNG PRIVATE VE iCLE Total General 255.07 75.9 380.55 83.9 284.45 80.3 234.15 82.3 370.60 80.1 OtheJr Transport 60.88 24.1 73.1 1 1 6.1 69.61 1 9.7 50.20 _ 17.7 92.1 7 1 9.9 Total Discretionary 335.95 100.0 453.66 100.0 354.06 100.0 284.35 100.0 462.77 100.0 Source: Household Inconie & Expendilire Survey 1990191. Dept of Census & Statistics (Table 4.11) whtch exdudes North & East and Consultants Calculations Note 1: Pttvate Speding 199lO per CentW Bank Repolt for 1995 Note 2: Above and Central Bank data vatrance Rs Million Sri Lanka per month ABOVE CENTRAL BANK 3.400 K Households Food Other Tobt Year Month per household Rs % Rs % Impris 11,040 52,213 63,253 18,684 1,550 General Expense 1201 30 3596 61 Local Goods 69.373 89.665 159,038 46,776 3.898 Transpot & Comnwunicaion 183 5 289 5 Rant 4,838 4,838 1.423 119 Tota Non-Food 1384 35 3885 66 Transport & Coo rrratcon 11,793 11.793 3,468 289 Food 2521 685 1971 34 Total Personal 80.413 158,509 238,922 70.271 5.858 Tota Expense 3905 100 5856 100 PerHouweholdparr Mot 1.971 3.885 5,856 Central Bank may Indude NoUt& East and nety use dlferent classlfca8ons 4c l'- 417 Table 7.9.3 Access to schools - Dehiowita DS Division -1993 PRIMARY SCHOOL SECONDARY SCHOOL Distance (km) Distance (km) GN Division Number >=1 Number >=2 of <1 <=2 >2 of <2 <=10 >10 Pupils Pupils 1 DEBAGAMA 115 115 148 148 2 ATALUGAMWELA 60 30 30 36 19 17 3 ELUWANA 105 5 100 26 26 4 MAGAMMANA 200 200 125 125 5 ATULUGAMA 500 500 820 75 745 6 TIMBIRIPOLA 225 225 120 120 7 IHALA TALDUWA 500 450 50 320 100 220 8 DAIGALA 150 150 65 65 9 KURUPETTA 190 190 100 100 10 BATANGALA 750 750 220 220 11 RANGEGAMA 100 100 230 150 80 12 PANAWALA 850 850 475 300 175 13 MADAGAMMANA 53 53 112 112 14 NAPAWALA 100 100 235 140 85 10 15 KELAGAMA 60 60 102 80 22 16 VIHARAKANDA 75 75 235 200 15 20 17 BOMALUWA 100 100 730 693 24 13 18 MADOLA 75 75 35 35 19 WELANGALLA 450 450 88 88 20 PAHALA TALDUWA 100 100 185 165 20 21 EPALAPITIYA 400 400 205 205 22 PANNILA 300 300 60 35 10 15 23 AMBALAMPITIYA 41 41 540 260 280 24 GALABALANAKANDA 117 117 98 92 6 25 MANIYANGAMA 300 300 145 75 60 10 26 UDUWILA 40 40 160 160 27 BORALANKADA 201 201 360 275 50 35 28 GODAGAMPOLA 150 150 350 300 15 35 29 KANANGAMA 200 200 170 170 30 IMBULPITIYA 270 270 37 37 31 ALGODA 152 152 1110 1100 10 32 DICKWELA 445 445 330 270 60 33 PUKUNUWELA 225 225 265 250 15 34 ELAULLA 185 185 55 55 35 HINGURALAKANDA E. 120 120 280 280 36 WALPOLA 695 695 220 190 30 37 KAHANAWITA 300 300 150 150 38 HINGURALAKANDA W. 100 100 318 200 100 18 TOTAL 8999 8594 255 150 9260 3447 5444 369 95.5 2.8 1.7 37.2 58.8 4.0 SOURCE: RDSC 418 Table 7.9.6 Access to schools - Hambantota DS Division - 1992 PRIMARY SCHOOL SECONDARYSCHOOL Distance (km) Distance (km) GN Division Number >=1 Number -2 of <1 -2 >2 of <2 <=10 >10 Pupils Pupils 1 DEHIGAHALANDA 250 0 250 200 150 50 0 2 MANAJJAWA 150 0 150 325 200 125 0 3 SISILASAGAMA 1200 1200 0 0 140 100 40 0 4 BELLAGASWEWA 250 0 250 8 0 8 0 5 SIYAMBALAGASWILA N. 0 0 0 247 135 90 22 6 SIYAMBALAGASWILA S. 200 0 200 860 835 25 0 7 ELALLA 170 170 0 0 83 0 55 28 8 KELIYAPURA 150 150 0 0 425 0 425 0 9 BADAGIRIYA 0 0 0 450 0 0 450 10 SIRIYAGAMA 365 365 0 0 20 10 10 0 11 YAHANGALA W. 200 200 0 0 258 250 8 0 12 PALLEMALALA 514 514 0 0 18 0 18 0 13 SAMODAGAMA 455 450 0 5 50 0 50 0 14 MIRIJAWILA 553 512 0 41 28 0 28 0 15 WALAWA 0 0 0 421 421 0 0 16 ARAWANAMULLA 205 0 205 33 0 24 9 17 GODAWATA 0 0 0 269 264 5 0 18 GAWEWA 283 243 0 34 49 0 49 0 19 UDA BERAGAMA 276 276 0 0 69 0 59 10 20 PAHALA BERAGAMA 216 216 0 0 24 0 17 7 21 KETANWEWA 0 0 0 165 0 132 33 22 GONNARUWA 175 175 0 0 44 0 44 0 23 TAMMENNAWA 40 40 0 0 222 142 0 80 24 BUNDALA 164 164 0 0 18 0 0 18 25 YAHANGALA E. 12 12 0 0 221 210 0 11 26 JULGAMUWA 0 0 0 165 89 74 2 27 KOHOLANEALA 168 168 0 0 42 0 38 4 28 SIRIBOPURA 46 46 0 0 416 416 0 0 TOTAL 6042 4901 0 1135 5270 3222 1374 674 PERCENTAGE 81% 0% 19% 61% 26% 13% SOURCE: RDSC 419 Table 8.2.1 Comparative Provision of Rural Passenger Services Per Day -1995 Category Peoplised Companies Private Operator Route & Permits Routes 2203 369* Permnits issued 1859* Permits per route 5 Avg. Operated per route 3.7 Avg. Buses Buses Operated 2076 1357 Average Vehicle Capacity 35 20* Bus km '000 369.5 179 Km/Bus/Day (Avg.) 178 132 Passengers Passengers '000 1090.8 351 Pax Km (m) 16.7 5.37 Passenger per bus/day 525 259 Avg. Pax Journey (APJ) km 15.3 Avg. load 15 15.3 Vehicle Occupancy (%) 132 30 Seat km (m) 12.9 150 Revenue Revenue per day Rs.(m) 1.2 1.37 Fare per km. (cts.) 25.5 25.5 Avg. pax fare (Rs.) 3.85 3.90 Market Share (%) 76 24 Source: Consultants Calculations Notes: Performance data for Peoplised Companies : actual Performance data for Private Operators : estimated (* = actual) 420 APPENDIX 1 1995 PERFORMANCE OF 93 PEOPLISED COMPANIES Average Buses (fleet) 8,811 "I " 5 yrs or less 3,754 operated 4,698 Bus-km service M 352,554 Bus km/bus/day 206 Pax-km M 19,305 Average load 55 Passengers M 1,149 Pax trips/Day K 3145 Pax/day (2 trips each) K 1573 Average lead km 16.8 Average fare Rs 3.57 Average fare per km 0.21 Bus crewmen 18,609 Eng. staff 7,006 other staff 8,579 Total staff 34,194 Bus-km/day/crewman 52 /eng staff 138 /other staff 113 " /total staff 28 Rs '000 Rs/km RUrJNING COST Fuel Rs M 1,335,244 3.79 Spares " 460,474 1.31 Tyres " 484,312 1.37 Lube "5 114,140 0.32 Tickets " 27,903 0.08 Repairs " 21,443 0.06 Sub total " 2,443,516 6.93 Eng. staff " 418,743 1.44 Total " 2,862,259 3.12 TIM COST Bus crews " 1,112,244 3.15 Depreciate " 424,882 1.21 Total " 1,537,126 4.36 TOTAL VARIABLES 4,399,385 12.48 OV}READS Staff 512,760 1.45 Others 424,937 1.21 Total 937,697 2.66 TOTAL COST 5,337,082 15.14 LESS REVENUE Passengers (4,103,899) (11.64) Govenrment (347,988) (0.99) Others (247,779) (0.70) Total (4,699,666) (13.33) ACCOUNTING LOSS 637,466 I.81 EXTRA DEPRECIATION TO REPLACE FhEFT 1,266,830 3.59 Totals may not tally because of rounding. M = million K = '000 Staff cost has been allocated to crews, engineering and over heads in propotion to numbers. Source : National Transport Commission. 421 APPENDIX 2 INTRA & INTER PROVINCIAL & LUXURY PRIVATE OMNIBUSES - STATISTICS - JUNE 1995 NO. OF BUSES PLACES TOTAL TOTAL PROVINCE DISTRICT SERVICES NO OF A B C D E F ALL ROUTES ABOVE 60 51-60 41-50 31-40 21-30 BELOW 20 CAPACITIES 1. WESTERN 1. COLOMBO I INTRA 214 2 37 185 389 1921 257 2,791 PROVINCE 2 INTER 61 4 75 92 106 211 0 488 3 LUXURY 29 0 2 15 10 201 0 228 2. GAMPAHA 1 INTRA 132 1 29 89 223 1,252 137 1,731 2 INTER 23 0 1 1 13 48 16 79 3 LUXURY 1 0 0 0 0 1 0 1 3. KALUTARA 1 INTRA 97 0 17 53 125 475 124 794 2 INTER 2 0 3 0 5 10 0 18 3 LUXURY 0 0 0 0 0 0 0 0 SUB TOTAL 1 INTRA 443 3 83 327 737 3648 518 5316 2 INTER 86 4 79 93 124 269 16 585 3 LUXURY 30 0 2 15 10 202 0 229 TOTAL 559 7 164 435 871 4119 534 6130 2. CENTRAL 4. KANDY 1 INTRA 171 0 8 62 113 595 157 935 PROVINCE 2 INTER 34 4 53 45 57 70 1 230 3 LUXURY 10 0 1 8 6 47 0 62 5.MATALE 1 INTRA 48 0 0 1 11 71 59 142 2 INTER 9 0 4 3 7 21 0 35 3 LUXURY 2 0 0 1 2 6 0 9 6. N'ELIYA 1 INTRA 53 0 0 1 23 71 56 151 2 INTER 6 0 0 0 2 4 0 6 3 LUXURY 0 0 0 0 0 0 0 0 SUB TOTAL I INTRA 272 0 8 64 147 737 272 1228 2 INTER 49 4 57 48 66 95 1 271 3 LUXURY 12 0 1 9 8 53 0 71 TOTAL 333 4 66 121 221 885 273 1570 3. SOUTHERN 7.GALLE 1 INTRA 83 0 7 24 82 314 0 427 PROVINCE 2 INTER 7 0 10 9 23 27 0 69 3 LUXURY 3 0 0 0 0 41 0 41 8. MATARA 1 INTRA 53 0 6 9 32 280 14 341 2 INTER 24 0 8 4 29 54 0 95 3 LUXURY 4 0 0 0 0 40 0 40 9. HAMBANTOTA 1 INTRA 55 0 2 6 25 111 42 186 2 INTER 10 0 4 1 6 26 2 39 3 LUXURY 3 0 0 0 0 8 0 8 SUB TOTAL 1 INTRA 191 0 15 39 139 705 56 954 2 INTER 41 0 22 14 58 107 2 203 3 LUXURY 10 0 0 0 0 89 0 89 TOTAL 242 0 37 53 197 901 58 1246 Source: National Transport Commission. 422 INTRA & INTER PROVINCIAL & LUXURY PRIVATE OMNIBUSES - STATISTICS - JUNE 1995 NO. OF BUSES PLACES TOTAL TOTAL PROVINCE DISTRICT SERVICES NO OF A B C D E F ALL ROUTES ABOVE 60 51-60 41-50 31-40 21-30 BELOW 20 CAPACITIES 4. UVA 10. BADULLA 1 INTRA 73 0 2 3 26 187 68 286 PROVINCE 2 INTER 16 0 20 1 12 17 0 50 3 LUXURY 2 0 0 1 1 6 0 8 11. MONARAGALA 1 INTRA 23 0 0 4 2 27 20 53 2 INTER 3 0 0 2 2 1 0 5 3 LUXURY 2 0 0 0 0 2 0 2 SUB TOTAL 1 INTRA 96 0 2 7 28 214 88 339 2 INTER 19 0 20 3 14 18 0 55 3 LUXURY 4 0 0 1 1 8 0 10 TOTAL 119 0 22 11 43 240 88 404 5. SABARAGAM 12. RATNAPURA 1 INTRA 69 0 21 64 168 217 32 502 PROVINCE 2 INTER 29 0 18 5 15 41 2 81 3 LUXURY 3 0 1 1 0 12 0 14 13. KEGALLE 1 INTRA 70 0 7 58 337 244 29 675 2 INTER 19 0 14 12 28 65 119 3 LUXURY 1 0 0 0 0 2 0 2 SUB TOTAL 1 INTRA 139 0 28 122 505 461 61 1177 2 INTER 48 0 32 17 43 106 2 200 3 LUXURY 4 0 1 1 0 14 0 16 TOTAL 191 0 61 140 548 581 63 1393 6. NORTH 14. ANURADHAPURA 1 INTRA 59 0 1 11 79 85 22 198 CENTRAL 2 INTER 22 1 3 8 15 22 0 49 PROVINCE 3 LUXURY 2 0 0 0 1 29 0 30 15. POLONNARUWA 1 INTRA 56 1 6 26 56 73 19 181 2 INTER 22 1 13 16 9 12 0 51 3 LUXURY 2 0 1 1 0 4 0 6 SUB TOTAL 1 INTRA 115 1 7 37 135 158 41 379 2 INTER 44 2 16 24 24 34 0 100 3 LUXURY 4 0 1 1 1 33 0 36 TOTAL 163 3 24 62 160 225 41 515 Source: National Transport Commission. 423 INTRA & INTER PROVINCIAL & LUXURY PRIVATE OMNIBUSES - STATISTICS - JUNE 1995 NO. OF BUSES PLACES TOTAL TOTAL PROVINCE DISTRICT SERVICES NO OF A B C D E F ALL ROUTES ABOVE 60 5140 41-50 31-40 21-30 BELOW 20 CAPACITIES 7. NORTH 16. KURUNEGALA 1 INTRA 116 4 5 20 154 387 109 679 WESTERN 2 INTER 30 3 32 31 39 110 2 217 PROVINCE 3 LUXURY 5 0 0 2 2 23 0 27 17. PUTTALAM 1 INTRA 39 0 0 5 50 89 141 285 2 INTER 10 0 3 5 17 43 24 92 3 LUXURY 3 0 0 0 0 27 0 27 SUB TOTAL 1 INTRA 155 4 5 25 204 476 250 964 2 INTER 40 3 35 36 56 153 26 309 3 LUXURY 8 0 0 2 2 50 0 54 TOTAL 203 7 40 63 262 679 276 1327 8. EASTERN 18. BATTICALOA 1 INTRA _ _ _ _ _ _ _ _ PROVINCE 2 INTER 2 0 0 2 2 1 0 5 3 LUXURY 1 0 0 0 0 1 0 1 19. AMPARA 1 INTRA 19 2 4 26 0 22 74 128 2 INTER 12 0 4 2 11 8 0 25 3 LUXURY 0 0 0 0 0 0 0 0 20. TRINCOMALEE 1 INTRA 7 0 0 0 2 9 45 56 2 INTER 6 0 2 0 2 5 0 9 3 LUXURY 1 0 0 0 0 5 0 5 SUB TOTAL 1 INTRA 26 2 4 26 2 31 119 184 2 INTER 20 0 6 4 15 14 0 39 3 LUXURY 2 0 0 0 0 6 0 6 TOTAL 48 2 10 30 17 51 119 229 9. NORTHERN 21. VAVUNIYA 1 INTRA _ _ _ _ _ _ _ 2 INTER 1 0 0 1 0 0 0 1 3 LUXURY 0 0 0 0 0 0 0 0 SUB TOTAL 1 INTRA - _ _ _ _ _ 2 INTER 1 0 0 1 0 0 0 1 3 LUXURY _- - _ - _ TOTAL 1 0 0 1 0 0 0 1 ALL ISLAND SUB TOTAL 1 INTRA 1437 10 152 647 1897 6430 1405 10541 2 INTER 348 13 267 240 400 796 47 1763 3 LUXURY 74 0 5 29 22 455 0 511 TOTAL 1859 23 424 916 2319 7681 1452 12815 CAPACITY 1 INTRA 0.1% 1.4% 6.1% 18.0% 61.0% 13.3% 100.0% DISTRIBUTION 2 INTER 0.7% 15.1% 13.6% 22.7% 45.2% 2.7% 100.0% 3 LUXURY 0.0% 1.0% 5.7% 4.3% 89.0% 0.0% 100.0% l ALL ISLAND 0.2% 3.3% 7.1% 18.1%f 59.9% 11.3% 100.0% Source: National Transport Commission. APPENDIX 5 PERFORMANCE OF SABARAGAMUWA PROVINCE PEOP'LISED COMPANIES: OCTOBER 1995 ROUTES BUSES DAILY BUS TRIPS IBUS-KILOMETERS PASSENGER TRIPS PERSONS FINANCIAL SERVICE AG OPERATED On Roun Round Round Daily perii BsTotal Total per per PER DAY AVG COST REVENUE ILOSS CATEGORY Nr LENGTH Total per Way Total per per Total Avg per Day During per Bus/ Bus Total per FARE per RS per RS per km Route route Bus km (avu) Month Day Day Trip route '00 km '000 km '000 km A B C D E F G H I J K L M N P 0Q R S T U V W X Y Z RATNAPURA DISTRICT RURAL 202 14.0 156.1 0.B 1732 866 4.3 5.5 753881 24319 156 2122217 68459 439 40 34229 169 4.60 10696 0.44 9,765 0.40 931 0.04 LONG DIST 45 89.1 50.1 1,1 126 63 1.4 1.3 348059 11228 224 507909 16384 327 130 8192 182 9.11 4B77 0.43 4,627 0.41 250 0.02 SUBURBAN 42 23.1 47.2 1.1 388 194 4.6 4.1 277324 8946 190 755806 24381 517 63 12190 290 4.64 3956 0.44 3,503 0.39 452 0.05 URBAN 9 4.1 6.6 0,7 224 112 12.4 17.0 28538 921 139 149398 4819 730 22 2410 268 2.11 386 0.42 315 0.34 71 0.08 TOTAL 29 18.4 26.0 0.9 2470 1235 4.1 4.8 1407802 13 175 3535330 114043 43 46** 57021 191 5.15 19915 044 18,210 0.4 1704 0.0 KEGALLE DISTRICT RURAL 124 8.0 148.7 1.2 2792 1396 11.3 9.4 694175 22393 151 2236599 72148 485 26 36074 291 3.76 9520 0.43 8406 0.38 1115 0.05 LONG DIST 17 36.2 8.6 0.5 56 28 1.6 3.3 62772 2025 235 100363 3238 376 58 1619 95 8.27 921 0.46 830 0.41 92 0.05 SUBURBAN 30 11.3 65.9 2.2 1168 5841 19.5 8.91 407581 13148 200 12497471 40314 612 351 20157 672 4.31 5755 0.44 5384 0.41 372 0.03 URBAN 1 4.9 0.8 0.8 18 9 9.0 11.3 2758 89 111 78051 252 315 141 126 126 3.54 35 0.40 28 0.31 8 0.09 ~ TOTAL _1721 9.3 2240 1.314034 20171 11.7 9*T0 11672861 375 168 35-94514 115952 511 29 57976 33 4.07 16233 0.43 14647 0.39 158 0. SABARAGAMUWA RURAL 326 10.3 304.8 0.9 4524 2262 6.9 7.4 1448056 46711 153 4358816 140607 461 31 70303 216 4.17 20216 0.43 18170 0.39 2046 0.04 LONG DIST 62 72.8 58.7 0.9 182 91 1.5 1.6 410831 13253 226 608272 19622 334 lOB 9811 158 8.97 5798 0.44 5457 0.41 341 0.03 SUBURBAN 72 14.2 1I13.1 1.6 1556 778 10.8 6.9 684905 22094 195 20055531 64695 572 421 32348 449 4.43 9711 0.44 8887 0.40 824 0.04 URBAN 10 4.21 7.4 0.7 12421 121 12.1 16.4 31296 11010, 136 1572031 5071 685 211 2536 254 2.18 422 0.42 343 0.34 79 0.08 TOTAL ,470 12.81 4U 1.0 O65041 3252 6.9 6.7" 25750881 8361 12 71298441_22999b 4-75 114-997, 24 1 .61 36147. 0.44i 32857 0.0iW 39, .4 Source: NTC and calculations by consultants Notes: FORMULAE GIVEN A BCD G JMU W 1. Passenger trips are one-way trips (ie out trip and return trip count as 2 trips) E=D/B L=K/D ThW/M 2. Km excludes non-route-specific km. F=K/C N=M131 V=UlK 3. Persons per day assumes that all travellers incur 2 trips. G=F2 P=NlD X=W/K 4. Revenue excludes subsidy and sundry revenue, H=GIB Q=Nl2G Y=U-W 5. Cost is after deducting sundry revenue. I=GlD R=N12 Z=YIK 6. Totals may not tally because of rounding. K=J/31 S=R/B 7. Passengers exclude season ticket holders. APPENDIX 6 PERFORMANCE OF SOUTHERN PROVINCE PEOPLISED COMPANIES: OCTOBER 1995 ROUTES USES _____ -D-AILYIU TRP BUS-KILOMETERS ____PASSENGER TRIPS PE FINANCIAL SER VICE AVG OPERATED Oe Round Round I on - Daity7 per Bus Total Total per Iper PIER DAY COS RE UELS ATEGO Nr LENGTH -o-tal per Way Total per per Total Avg per Day During per Bus/ Bus ala per FAREr RS per ~ ~ 1 km Route route Bus kmn (avu) Month Day Day Trip route 00 km 00 km 00 km GALLE DISTRICT RURAL 80 13.4 76.1 1.0 1302 651 8.1 8.6 538991 17387 228 1691907 54578 717 42 27289 341 3.65 7,501 0.43 6,170 0.35 1,331 0.08 LONG Di 26 65.-3 31.4 1.2 176 88 3.4 2.8 356275 11493 366 443602 14310 456 81 7155 275 9.61 4,672 0.41 4,264 0.37 408 0.04 SUBURB 33 12.41 412.1 1.3 854 427 12.9 10.1 327175 10554 251 984774 31767 755 37 15883 481 3.86 4,5771 0.4 3,805 0~36 771 0.07 URBAN 4 7.1 4.4 1.1 128 64 16.0 14.5 286 905 206 100979 3257 740 25 1629 407 2.50 394 0.44 253 0.28 141 0.16 TOTAL 14?3 16.4 1540 1.l 246 123 T61 80 1 2262~ 3216 1S 6751 42 51956 36 4. 1744 4 14,493 0.3 2651 0.0 MATARA DISTRICT RURAL I 591 15.4 84.4 1.4 1138 569 9.6 6.7 543906 17545 208 1822167 58780 696 52 29390 498 3.77 8197 0.47 6862 0.39 1335 0.08 LONG DI 161 61.0 17.5 1.1 90 45 2.8 2.6 170138 5488 314 284349 9173 524 102 4586 287 7.34 2560 0.47 2086 0.38 474 0.09 SUBURBI 141 24.5 26.3 1.9 250 125 8.9 4.8I 189803 6123 233 596200 19232 731 77 9616 687 4.12 2749 0,45 2456 0.40 294 005 URBN 3J 11.3 3.8 1.3 74 37 12.3 9.7 26007 839 221 82916 2675 704 36 1337 446 3.22 375 0.45 267 0.32 108 0.13 TOAL 92 19- 132.0 1 52 8. T 29995 227 8T 89 61 T 8 443 41 1~ 0.61 11671 0.9 21 00 HAMBANTADSRC RURAL 441 15.2 46.9 1.1 604 302 6.9 6.4 283860 9157 195 831820 26833 572 44 13416 305 3.72 3681 0.40 3095 0.34 586 0.06 L-ONG Dli 211 88.2 18.2 0.9 74 37 1.8 2.0 202226 6523 358 246816 7962 437 108 3981 190 8.54 2616 0.40 2109 0.32 507 0 08 SUBURBS 121 23.8 11.9 1.0 136 68 5.7 5.7 100254 3234 272 230539 7437 625 55 3718 3~10 4.26 1298 0.40 983 0.30 315 010 URBAN 01 0.0 0 0 0 0 0 0 0 0 0 0 77I 23'I 2 77.0 1Tb 814 407 5.3 53 58640 1894 24 i3 4.~3i* 2~TT T 73 7695, 040 6187 .3 1408 0 SOUTHERNPOIC RURAL I 1831 14~5 207.4 1.1 3044 1522 8.3 7.3 1366757 44089 213 4345894 140190 676 46 70095 383 3.71 19379 0.44 16127 0.37 3252 0,07 LONG DiI 631 69.1 67.1 11 340 170 2.7 2.5 728639 23504 350 974767 31444 469 92 15722 250 8.68 9848 0.42 8460 0.36 1388 0,06 SUBURBI 591 16.1 80.3 1.4 1240 620 10.5 7.7 617232 19911 246 1811513 58436 728 471 292181 495 4.00 862 0.43 7244 0.36 1380 0,07 URBAN 7J 8.6 8.2 1.2 1 202 101 14.4 12.31 54067174 213 183895 5932 723 29 29661 424 2.83 770 0.4 50 03 24 01 Source: NTC and calculations by consultants Notes7 ~~~~~~~~~~~~~~~~~~FORMULAE GIVEN ABCDGJMUW 1. Passenger tripe are one-way tripe (ie out trip and return trip count as 2 tripe) E=DfB L=KID T=WIM 2. Km excludes non-route-specito km. F=KIC N-M13i V=UfK( 3. Persons per day assumes that all travellers inicur 2 trips. G=F/2 P=NID X'W/K 4. Revenue exyludes subsidy and sundry revenue. H=G/B C-N/2G Y-U-W 5. Cost is alter dedubcting sundry revenue. I=GID R=N/2 Z=YIK 6. Totals may not tally because of rounding. K=J131 S=R/B 7. Passengers exclude season ticket holders. PERFORMANCE OF NORTH CENTRAL PROVINCE PEOPLISED COMPANIES -: OCTOBER 1995 APPENDIX 7 ROUT ES DAILY BuS BUS-KILOMETERS PASSENGER TRIPS FINANCIAL TRIPS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ AVERAGE BUSES PER TOTAL TOTAL PER PER PERSONS COST REVENUE toSS SERVICE Nr LENGTH OPERATED TOTAL DAILY BUS DURING PER BUS/ BUS PER DAY AVERAGE CATEGORY ONE ROUND ROUND ROUND KM AVG PER MONTH DAY DAY TRIP FARE RS per RS per RS Per km lolol per WAY TOTAL per PER DAY Total per 000 km 0C km °° km roule route BUS (AVU) roule A B C 0 E F G H I J K L M N P Q R S T U V W X Y 2 4AiURAePAdVa DIST/Cr RURAL 129 26.4 104.1 0.8 756 379 2.9 3.6 619.711 19991 192 1.311,201 42,297 406 56 21.148 164 4.97 7,432 0.37 6,518 0.33 915 0.05 LONGDEIS 34 145.5 64.2 1.9 140 70 2.1 1.1 631.272 20364 317 633.285 20.429 318 146 10.214 300 11.0S 7.548 0.37 7.018 0.34 530 0.03 SUB URBAN 25 29.5 32.0 1.3 180 90 3.6 2.6 164.805 5316 166 351,832 11,349 355 63 5.675 227 4.86 2,143 0.40 1,710 0.32 433 0.06 URBAN 1 7.3 1.7 1.7 20 10 10.0 5.9 4,534 146 86 17.210 555 327 28 278 278 3.29 64 0.44 57 0.39 8 0.05 TOTAL 189 41.7 202.0 1.1 1098 549 2.9 2.7 1,420,322 45817 227 2.313,528 74,630 369 68 37.315 197 6.61 17.187 0.38 15.303 0.33 1,8S5 0.04 POLONN-ARUWA DISTRICT_ RURAL 33 24.4 44.9 1.4 314 157 4.8 3.5 237.255 7653 170 586,248 1.911 421 60 9.456 287 4.61 3.208 0.42 2,701 0.35 507 0.07 LONGDIS IT 103.6 26.0 2.4 78 39 3.5 1.5 250,466 8060 311 268.6S5 8.667 333 III 4,334 394 11.13 3.386 0.42 2.991 0.37 396 0.05 SUB URBAN 9 46.8 8.0 0.9 42 21 2.3 2.6 60.893 1964 246 116,701 3,765 471 90 1.882 209 6.50 823 0.42 759 0.39 64 0.03 URBAN I 10.0 3.1 3.1 38 19 19.0 d.I 11,827 382 i23 53.428 1.Z23 556 45 862 862 2.68 160 0.42 143 0.37 TI 0.04 TOTAL 54 38.3 82.0 1.5 472 236 4.4 2.9 560.441 18079 220 1.025,062 33.067 403 70 16,533 306 6.43 7.577 0.42 6.593 0.36 984 0.05 N6OR TNCEtNTRAL -7___ _ PROVINCe RURAL 162 25.8 149.0 0.9 1072 536 3.3 3.6 856.966 27644 186 1.897.449 61,208 411 57 30.604 189 4.86 10,640 0.38 9,219 0.33 1.421 0.05 LONG DIST 45 130.5 90.2 2.0 218 109 2.4 1.2 881,738 28443 315 901,970 29.096 323 133 14,548 323 11.10 10,934 0.3B 10.009 0.35 925 0.03 SUBURBAN 34 32.8 40.0 1.2 222 )I1 3.3 2.8 225,698 7281 182 463.533 15,114 378 68 7,557 222 5.27 2.966 0.41 2.469 0.34 497 0.07 URBAN 2 9.1 4.8 2.4 58 29 14.5 6.0 16,361 528 110 70,638 2.279 475 39 1.139 570 2.83 224 0.43 200 038 25 0.05 TOTAL 243 40.7 284.0 1.2 1570 785 3.2 2.8 1,980,763 63896 225 3. 338.590 107.696 379 69 53.84 22 6.56 24.764 0.39 21.896 0.34 28686 0.04 Source NYC and calculations by consult.nts Notes FORMULAE GIVEN ABCDGJMUW I. Pasnger trips ore one-,oy tips (ie out tip and return trip count as 2 tfpl_ 2K Emnseudesnorroutejspoecic km. E=DJB Q=N/2G 3I Persons per day ssumes that aU ravelers incur, 2 Inps. F=K/C Q=N/F 4. Revenue euckides rubsidy ond sundry revenue. G=F/2 R=N/2 5. Cml is ater deducting sundry revenue. H=G/B S=R/B 6. Totab noy not laty becouse ol rounding. I=G/D T=W/M 7. Passengers elckrde season Ickelt holders. K=J/31 V=U/K L=K/D X=W/K N=M/31 Y=-SW P=N/D Z=YII .K (ON 427 SRI LANKA - Transport Sector Strategy: ssues and Options TOR for study on subsidy allocations in road transport and operation of bus services on non-economic routes Background 1. In Sri Lanka, about 84% of intercity travel is by bus and buses accommodate 67% of urban travel in Colombo. At present, a smaller share of the services (43% of passenger kilometres) are provided by Peoplised Bus Companies -independent public companies governed by company law with 50% of the share (allotted free of charge) in the hands of the workers and the remaining 50% in the hands of Treasury. Prior to the elimination of the state monopoly of road passenger transport in 1997, the share of state owned road transport was 73% of passenger kilometres. 2. Ownership and Competition Passenger transport was opened to the private sector in 1979 and the peoplisation of government owned bus transport services commenced in 1989. The private bus fleet has dramatically increased from 6,000 in 1982 to 9,000 in 1986 and by 1994 there were 13,000 buses. Nearly 90% of the private operators own only one bus, and the average size of private is smaller than that of the peoplised companies. The private sector ownership structure has remained fragmented and the formation of private companies operating fleets of buses been low. The private sector operators have credit difficulties having not obtained favourable financing arrangements and most of them are in arrears of settling the loans raised to purchase the buses. Peoplised Companies with their 93 depots, account for 25 percent of the total fleet of buses. The buses in the peoplised companies are larger, comfortable and usually less crowded than those of the private operators. These companies are in competition with the private sector buses which operate along the same routes as the peoplised Companies, except for routes with low traffic where the Peoplised Companies are almost the sole provider. Issuance of route permits is administered by Provincial Councils and permits are supposed to be issued automatically for all routes according to road classifications. Exceptions include the permits for operation on uneconomic routes which are issued based on a tendering procedure. Unlike the private sector, the fleet size of the peoplised Companies has dropped from 7,298 in 1979 to 3,893 in 1994. They have high administrative costs due to overstaffing and have been making losses. 3. Subsidies The Government through the National Transport Commission (NTC) is supposed to subsidize specific rural routes and other social services considered desirable based on competitive tendering. 4. Pricin2 and Re2ulations The tariffs of the private operators are not specifically regulated (having passed the 1991 National Transport Commission Act No. 37 which repealed the previous legislation regulating the bus industry) but are influenced by price leadership by the Peoplised Companies. The performance indicators of the private 428 companies available since privatisation of the bus industry began in January 1991 show increased ridership, bus productivity, revenues availability. About 70% of the privatised companies are making a profit in contrast with the past record of the Sri Lanka Central Transport Board's chronic annual deficits requiring budgetary support. 5. Safety and Route Regulation There is pressure to regulate owner operators to form companies, to reintroduce route licensing regulations, and to merge the present Peoplised Companies into larger companies with more centralised administration (as stated in the "Report of the Committee on Reorganisation of the Peoplised Companies and Private Bus operation", July 1995. The main reason for regulatory pressure is on the basis of safety consideration and what is referred to as "undisciplined competition". While accident rate by the private buses between 1980-1985 was growing 49% compared to a 26% decline in the rate of public buses, the rate of growth seems to be arrested as between 1985-1990 the accident rate declined by 73%. Purpose and Scope 6. The main purpose of this study would be to examine the current system of allocating subsidies for passenger transport. In particular, it is important to look at the distributional consequences of subsidies to the low income populations and the impact of suggested reforms such as complete privatisation of the peoplised companies, nationalisation of all bus transport, and introduction of new regulations in bus transport on the poor. Suggested Approach 7. The study should commence with an inventory of the types of services that currently exist for passengers in Sri Lanka, focusing on the distribution of service (routes, frequencies and number of buses) as a function of income of the riders. An evaluation of the price to subsidy ratio for the existing route structure should then be performed. The study should also include the discussion of the mechanism by which subsidies are currently administered (directly to the operators or to the riders) and the type of subsidy given. An estimate of the overall level of subsidies for transport should be given including subsidising the operational deficits of peoplised companies. It is important to make sure that the study covers intercity as well as urban bus services. Furthermore, an evaluation of the change in the level of subsidies before and after peoplisation as well as before and after introducing private bus services would be needed. An evaluation of the manner in which the process for competitive tendering for provision of service on non-economic routes is currently functioning would also be important to include. Finally a measure of the distributional consequences of reforms to the bus industry needs to be provided. This would include the potential impacts to the poor of complete privatisation in terms of reductions (or improvements) in the incidence of service (route structure and frequency) as well as the cost of service. Suggestions on how the current system of subsidies can be improved would also be important to include. 429 Suggested Products 8. The consultant should prepare two main products: (1) A work program including a proposed budget, time table, methodology (including types of persons to be interviewed), and outline for the final report. This would be reviewed by the TSPC before the consultant proceeded with the work. (2) A final report to be complete by April 15, 1996. 430 AcknowledEements The assistance rendered by Dr. Kusuma A. Gunawardena, Professor of Geography, and the Regional Development Studies Centre (RDSC) University of Colombo and the staff of the National Transport Commission is gratefully acknowledged. 431 References 1. Bradshaw, J., (1974), "The Concept of Social Need", Ekistics, 37, 184-7 2. Banister, D.J., (1982), Response of Shire Countries on the question of Transportation Needs, Traffic Engineering and Control, 23(10) 3. Central Bank of Sri Lanka, Annual Report - 1995 4. Central Bank of Sri Lanka - Report of the Consumer Finances and Socio- Econonic Survey 1986/87, Statistics Department Colombo, Sri Lanka. 5. Dheerasinghe, K.G.D.D., et al, Report of the Committee on Transport Fares, (1995), Colombo, Sri Lanka. 6. Diandas, J., et al, "Report of the Commnittee Appointed by the Hon. Prime Minister and Minister of Finance, Planning, Ethnic Affairs and National Integration, to examine issues relating to Peoplised Bus Companies and financing of the purchase of buses by Bus Companies (1994). 7. Halcrow Fox, Colombo Urban Transport Study (1996) Colombo, Sri Lanka. 8. Household Income and Expenditure Survey 1990/91, Final Report, Department of Census and Statistics, 1993, Colombo, Sri Lanka. 9. National Transport Commission, "Statistical Review" - 1995. 10. Regulatory Reform in Transport Some Recent Experiences (1993), Editor, Jose Carbajo, A World Bank Symposium. 11. "Rural Transport Policy Study - Dehiowita Divisional Secretary's Division", (1993), Regional Development Studies Centre (RDSC), University of Colombo, Sri Lanka. 12. "Rural Transport Policy Study - Hambantota Divisional Secretary's Division", (1992), Regional Development Studies Centre (RDSC), University of Colombo, Sri Lanka. 13. "Rural Transport Policy Study - Akuressa Divisional Secretary's Division", (1992), Regional Development Studies Centre (RDSC), University of Colombo. Sri Lanka. 14. Sahabandu, M.J., "Activity based Methodology to ascertain Transportation needs and Allocate Financial Support for Rural Bus services", (1988) in "Dimensions of Rural Transportation, Editor, Panduranga Roa, D. Inter- India - Publications. 432 15. Sahabandu, M.J., (1995), A model of Collaboration for provision of Rural Transportation Services, proceeds of the Conference addressing Transport Needs of Rural Communities, Colombo, Sri Lanka. 16. Sri Lanka Transport Board "Report of the Second Committee on Un-economic Bus Routes 1986", Colombo, Sri Lanka. 17. Tilakaratne, et al; "Report of the Committee on Reorganisation of the Peoplised Companies and Private Bus Operation", (1995), Colombo, Sri Lanka. 18. University of Moratuwa, "Report of the Study on Bus Operating Cost", 1993, Sri Lanka. 433 31. Road User Charges and Their Purposes G6mez-Ibifiez, J.A.40 Road user charges are usually defined as fees and taxes that are levied on road use, fuels, and motor vehicles but not on other comparable goods and services. Thus, typical road user chargers include highway tolls, fuel taxes, vehicle and driver registration fees, and any special import duties or luxury taxes paid on vehicles (above and beyond the rates generally applied to other goods and services). Purposes of Road User Charges It is important to understand that user charges have two different purposes, as shown in Table 1: * to raise revenues to finance highway services supplied by the government, and * to change the behavior of vehicle owners and users, particularly by making them take into account the full costs of their use of the roads. Most user charge studies are generally concerned with the first purpose; more rarely are they concerned with the second as well. These different purposes imply different focuses for the study. In particular, if the primary purpose is to insure adequate revenues, then * the studies focus primarily on budgetary costs to the government, and * the emphasis is on a rough balance between payments and costs for broad classes of users, such as cars, medium trucks, and heavy trucks. If the purpose is to change behavior, by contrast, then * the studies often include social as well as budgetary costs, such as pollution and congestion; and * an effort is made to tailor the changes more closely to costs by calculating payments and costs by type of road, location, time of day, etc., as well as by class of vehicle. Sri Lankan Studies, Findings and Recommendations Sri Lanka has done two recent studies of user charges: * the 1993 road user charge study that has since been updated by the TSPC and * the 1996 Colombo Urban Transport Study (CUTS) with focus exclusively on the greater Colombo metropolitan area. As shown in Table 2, both studies generally find that road users pay more in charges than they incur in costs. This is more true for cars and motorcycles than for medium and heavy trucks, however. Moreover, the principal social costs included are government highway expenditures; pollution and congestion costs are not considered. 40 Professor, Kennedy School of Government, Harvard University. 434 Each study recommended changes to bring charges and costs more into balance, shown in Table 3. The major recommendations of the 1993 road user charges study focused on increasing charges on trucks primarily by: * raising diesel fuel prices modestly, and * tripling the annual truck registration fees. The CUTS study was concerned with traffic congestion in Colombo. It considered special congestion tolls or licenses, but rejected them for now as not greatly needed and difficult to implement. Instead it proposed: . controls on the numbers of parking spaces in central Colombo. Assessment Motor vehicle ownership is increasing relatively slowly in Sri Lanka at this time (aside from motorcycles). As the economy keeps growing, however, the rate of growth in vehicle ownership and use will accelerate. Moreover, congestion, and probably pollution, are already high in Colombo. As ownership and traffic grow, the government should study more closely the possibilities of designing user chargers to regulate damaging or costly behavior as well as to raise revenues. In particular: * The decision to rely on annual registration fees rather than diesel fuel or other taxes as the primary charges on trucks should be reconsidered. The considerable pavement damage done by trucks is more related to truck use than ownership and fuel consumption rises roughly with truck weight. Fuel taxes will not substitute for some surcharges in registration fees and for axle load limitations, however, since pavement damage rises exponentially with axle loads. * The recommendation to rely on central area parking controls to regulate Colombo's congestion will probably also have to be rethought. Parking controls do not affect through traffic, which is approximately half of current central area traffic. They also do not affect trucks. 435 TABLE 1 PURPOSES OF ROAD USER CHARGES (1) RAISE REVENUES * FOCUS ON BUDGETARY COSTS * ROUGH BALANCE AMONG VEHICLE CLASSES (2) MODIFY BEHAVIOR 3 INCLUDE SOCIAL COSTS AS WELL (POLLUTION, CONGESTION) S T TAILOR CHARGES MORE CLOSELY TO MOST COSTLY USES (E.G. ROAD TYPE, LOCATION, TIME OF DAY AS WELL AS VEHICLE TYPE) 436 TABLE 2 FINDINGS OF SRI LANKAN STUDIES VEHICLE OPERATING COSTS IN COLOMBO; CUTS ESTIMATES, 1995 Financial Economic Surplus Overpa Car 13.09 6.79 6.3 93% Motorcycle 1.98 0.99 0.99 100% Van 9.18 7.26 1.92 26% Trishaw 6.01 3.96 2.05 52% Med. Bus 13.3 11.06 2.24 20% Lrg. Bus 17.11 14.69 2.42 16% Med. Truck 15.49 12.93 2.56 20% ___=__ |_ ROAD COSTS IN THE NATION, 1992 l_________ l Revenue Total Costs Surplus Overpay Car 2.72 0.41 2.31 563% Motorcycle 0.5 0.05 0.45 900% utility 1 1.41 0.55 0.86 156% Med. Truck 1.8 1.09 0.71 65% Lrg. 2-Axl. 1.47 0.83 0.64 77% 3-Axle 2.78 1.5 1.28 85% Articulated 2.24 1.12 1.12 100% Med. Bus 1.24 0.67 0.57 85% Lrg. Bus 0.64 0.44 0.2 45% 437 TABLE 3 RECOMMENDATIONS OF SRI LANKAN STUDIES ROAD USER CHARGE STUDY (1993) * MODEST INCREASE IN DIESEL PRICES 1995 PRICES AND COSTS (RS/L) DIESEL PETROL PRICE 12.44 40.00 COST 5.37 9.18 TAX 4.07 30.82 - TRIPLE HEAVY VEHICLE REGISTRATION FEES COLOMBO URBAN TRANSPORT STUDY * PARKING CONTROLS AND CHARGES IN CENTRAL COLOMBO 438 32. Are Current User Charges in Roads Adequate? Jayaweera, D.S. A. Types of User Charges Taxes on Vehicle Purchase and Parts. In Sri Lanka all road infrastructure is publicly provided. Revenues are raised from road users mostly through indirect charges using various forms of taxation. There are five types of taxes on vehicle purchase and parts: (a) a 15% flat import duty on all items since December 1993; (b) a surcharge on cars of 25% of the import duty charged since November 1989; (c) cess, 10% of the import duty charged, payable where import duty is at or over and above 50% of chargeable (cif) value; (d) an excise duty on diesel cars of 50% since 1992; and (e) an excise duty on motor vehicle parts and accessories of 20% since December 1994. Import Duties. In addition to the taxes on purchase listed above, there are import duties amd turnover taxes on vehicle imports. These rates are set according to the vehicle type as shown below. Category Import Duty Rate Tumover Tax Rate All Tax as % of CIF ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~................................................................................................... . . . Agricultural Tractors 10 0 10 Buses < 15 seats 35 15 57 Buses Ž 15 seats 10 15 28 Trucks < 2.5 t GVW 35 15 57 Trucks > 2.5 t - 5 t GVW 20 15 40 Trucks > 5 t 10 15 28 Motor Cycle (90 cc >) 20 10 38 Vehicle Parts 50 15 80 Cars < 1500 cc cif value Rs. 150,000 100 20 125 cifvalueRs. 300,000 125 20 155 cif value Rs. 400,000 150 20 180 Cars > 1500 cc cif value Rs. 150,000 200 20 231 cif value Rs. 300,000 250 20 273 cif value Rs. 400,000 275 20 297 Source: TSPC Diesel and Luxury Tax. A diesel and lucury tax imposed from September 1995 is also charged. The rates are Rs. 10,000 for diesel cars and vans of less than 2200 cc; a tax of Rs. 5,000 for diesel vans for school and passenger transport; and a tax of Rs. 50,000 (rcduced by Rs. 10,000 each year) for diesel vehicles less than 2700 cc and petrol vehicles less than 2500 cc. 439 Vehicle Registration. In addition at registration vehicles are charged the following rates: motor cycles Rs. 200; motor cars Rs. 1,250; tractors and trailers Rs. 500; buses and lorries Rs. 1,000; and driving licences Rs. 400. Annual Revenue Licence. Following decentralization, the provincial governments charge an annual revenue licence which is as follows: Category Fee in Rs. Car, petrol 700 Car, diesel 4,200 Utility, diesel 2,700 Utility, petrol 1,800 Small Truck 1,675 Medium Truck 2,800 Large 2-axle 4,200 Truck 3-axle Truck 5,600 Articulated Truck 8,400 Medium Bus 2,200 Large Bus 3,600 Motor Cycles 275 Land Vehicles 200 Trailer 1,675 Three Wheelers 600 Source: TSPC B. Revenues from Road Usage Revenues by Road Type. With this structure of indirect charges the Government collects around Rs. 12 billion per year. The revenues collected distributed by road type are shown below. Estimated Revenues by Road Type, 1995 (Rs. Million) _ Road Type Total Vehicle CMA A Class B Class Provincial Other Road (C&D) Road Car 2,519 1,417 438 219 71 4,664 Utility 1,082 1,287 576 320 169 3,433 MediumTruck 91 247 118 60 20 536 Large 2-axle Truck 106 368 156 79 26 735 3-axle Truck 3 13 5 0 0 21 Articulated 15 20 10 0 0 45 Medium Bus 75 223 98 47 0 443 Large Bus 82 246 165 65 0 558 Motor Cycle 503 450 426 384 125 1,888 Total 4,475 4,271 1,992 1,174 411 12,323 Source: Calculations by the TSPC 440 C. Adequacy of Existing Charges Purpose of Charges. In addition to their revenue raising function, user charges that are properly defined are supposed to integrate objectives of economic and environmental sustainability. This means that charges should be giving signals that induce the efficient use of available capacity (includign scarce road space), an efficient choice of vehicles and fuels, an efficient split of traffic among modes, and the efficient maintenance and management of infrastructure. Looking at the structure of revenues and relating them to the level of usage and costs of efficient maintenance and management indicates that the existing structure is not setting the right signals. Level of Usage. The estimated vehicle kilometers of travel by road type show that heavy vehicles use the provincial road network quite heavily, but do not seem to be paying the full cost of the damage that they create, as can be seen from the analysis of cost recovery below. Estimated Vehicle Kilometers by Road Type (million) Vehicle Road Type Total CMA A Class B Class Provincial Other Road (C&D) Road Car 981 552 164 82 26 1,804 Utility 768 770 327 140 89 2,094 Medium Truck 75 211 94 47 15 445 Large 2-axle Truck 96 345 141 72 23 677 3-axle Truck 2.6 9.7 0 0 0 12 Articulated 8.2 10 0 0 0 18 Medium Bus 96 297 195 77 0 664 Large Bus 117 361 152 73 0 703 Motor Cycle 1,017 910 862 806 263 3,858 Total 3,160 3,465 1,934 1,296 416 10,271 Source: Calculated by the TSPC Costs of Road Provision. The Government needs around Rs. 5 billion per year to meet the costs of road provision at the national level. This includes managing existing pavements (45%); fixing drainage (29%); widening roads to meet capacity demands (9%); construction of new roads to meet expansion demands (11%); and other costs suchas routine maintenance and administration (6%). In addition, provincial Governments need around Rs. 590 million to meet their expenditure requirements on provincial roads. These include managing existing pavements (60%) which are in worse shape than the national road system; drainage (15%); widening (10%); new roads (10%0, and other costs (5%). Distance Based Costs of Road Usage. We can allocate the above costs of road provision to the distance traveled by a given vehicle in order to assess the distance based costs of road usage. Such a cost allocation would incorporate road damage externalities, which is 441 the cost due to wear and tear of a road contributed by a particular vehicle type. Such a cost is called an externality as the damage caused by a particular vehicle reduces the speed and increases wear and tear of the vehicles of other road users. The advantage of the distance based allocation is that it partially capture the cost related to emissions which are directly related to the amount and type of fuel consumed., an environmental externality. The distance based costs, when allocated by vehicle and road type, show that three axle trucks generate three times as much costs as cars, yet cars are charged 25 times more (as a vehicle class) than the three axle trucks. A more detailed analysis of the costs versus revenue per vehicle kilometer of travel follows. Estimated Cost per Vehicle Type, 1995 (Rs. per km) Vehicle Road Type | Total CMA A Class B Class Provincial Other Road (C&D) Road Car 0.72 0.68 0.65 0.64 0.63 0.63 Utility 1.03 1.03 0.99 0.97 0.97 0.96 Medium Truck 1.72 1.74 1.72 1.72 1.72 1.72 Large 2-axle Truck 1.30 1.32 1.30 1.30 1.29 1.29 3-axle Truck 2.36 2.36 0.00 0.00 0.00 2.36 Articulated 1.75 1.75 0.00 0.00 0.00 1.75 Medium Bus 1.06 1.08 1.07 1.06 0.00 1.05 Large Bus 0.56 0.59 0.57 0.56 0.55 0.55 Motor Cycle 0.19 0.18 0.17 0.17 0.12 0.09 Source: Calculated by the TSPC Cost Recovery. When we focus only at the distance based costs of road provision and look at the recovery of costs by vehicle type we see that, as a group, the level of revenues is sufficient to meet the financial costs of road provision. However, large vehicles pay much less than lighter vehicles. A three axle truck generates a surplus of Rs. 2.5 per km of travel, over and above the financial cost of road provision (excluding the other costs such as capacity and congestion or environmental damage). Cars on the other hand generate a surplus of Rs. 13.2 for each kilometer of travel, over and above the financial or budgetary costs of road provision. Cars under the existing structure of tariffs pay five times more than trucks, when the costs are allocated according to distance traveled. 442 Estimated Surplus per Vehicle Type, 1995 (Rs. per km) Vehicle Road Type Total CMA A Class B Class Provincial Other Road (C&D) Road Car 2.57 2.57 2.67 2.68 2.74 13.2 Utility 1.41 1.67 1.76 2.28 1.90 9.0 Medium Truck 1.22 1.17 1.26 1.27 1.32 6.2 Large 2-axle Truck 1.10 1.07 1.11 1.10 1.13 5.5 3-axle Truck 1.14 1.34 0.00 0.00 0.00 2.5 Articulated 1.84 1.98 0.00 0.00 0.00 3.8 Medium Bus 0.78 0.75 0.50 0.61 0.00 2.6 Large Bus 0.70 0.68 1.09 0.89 0.00 3.4 Motor Cycle 0.49 0.49 0.49 0.48 0.48 2.4 Total 11.3 11.7 8.9 9.3 7.6 48.7 Source: Calculated by the TSPC Economic Versus Retail Costs. There is a differential taxation level between petrol and diesel using vehicles, in favor of diesel using vehicles. This generates incentives to purchase diesel using vehicles even for personal travel. The environmental damage caused by such choices, in terms of air pollution, is an additional cost which does not seem to be recovered from the existing structure of charges. The table below indicates that diesel is sold at about parity level with its economic cost. The economic cost is net of transfers including direct subsidies, taxes, and duties between the Ceylon Petroleum Corporation (CPC) and the Government. It therefore reflects the real cost to the economy of supplying that product. Petrol on the other hand is sold at a value nearly five times its economic cost. The retail price of gasoline is also more than three times that of diesel oil. Effective Taxation Levels, Diesel and Petrol 1995 First Quarter Financial Prices 1995 Road Sector Sales Diesel Petrol ........................................................................................................................................ Retail Cost (Rs. per Liter) 12.44 40.00 Econoniic Cost (RS. per Liter) 8.37 9.18 Effective Tax (RS. per Liter) 4.07 30.82 Sales 1995 (nu Liters) 870.3 249.2 Tax Revenue (mn. Rs.) 3,542.3 7,681.2 To General Revenue (mn Rs.) 2,550.5 694.4 Remaining for RoadsP(Cn. Rs.) 991.8 6,986.8 Source: TSPC Calculations 443 D. Recommendations A number of recommendations are made to restructure the existing system of user charges. First, before changing the level of charges for any vehicle category, it is necessary to create a road maintenance fund that will be used to finance improvements and repairs on the road network. Such a fund should be managed in a commercial manner and should have representation from road users. This will ensure that the right priorities are set and that the users feel that their payments are used in the appropriate fashion. A necessary condition for such a fund to work is a pavement management system on national and provincial roads, which will allow the proper apportioning of damage and capacity costs across vehicle categories. Other recommendations include restructuring the price and tax system for diesel using vehicles to send the right signal to users who are substituting diesel for petrol vehicles for personal use under the current system of charges. It is also necessary to restructure the annual revenue licencing system so that it reflects much better the distance-based costs of road usage. Opening up the petroleum market to competition would result in a reduction in petrol prices as well as provision of product differentiation included unleaded fuel, which would provide the incentive to substitute to less polluting fuel types. Charges to meet enviromental damage costs from air pollution, such as a congestion tax or penalty during peak hours would also allow the Government to make road transport environmentally sustainable by sending the right signal to vehicle users. Other measures in the Colombo urban area such as parking fees and traffic management also need to be investigated for their potential. 444 33. Operation of Non-Economic Routes by Rail Weerasooriya, G.P.S, and U.E., Storm41 A. Introduction 6. Sri Lanka Railways has been losing money for decades, with the amount of the loss increasing annually. In recent years, revenues have not been enough even to cover labour expenditures, as is shown in Table 01. Some people might question if the country receives value for the money spent on the Railway. This paper will argue: (i) that with investment in infrastructure and rolling stock and reforms to organisation and management, losses can be reduced and benefits increased; and (ii) that certain services generate external benefits that offset the losses they incur. Table -01 - Summary of Revenues and Expenditures (Rs Millions) 1993 1994 1995 Revenue 820.5 916.3 947.3 Recurrent Exp. - Labour 843.1 1,073.1 1,219.2 - Fuel&Lub. 297.9 492.4 409.9 - Other 645.5 716.6 749.9 Sub Total: 1,786.6 2,282.1 2,379.0 Capital Exp. 2,635.1 1,976.8 2,472.9 Total Exp. 4,421.7 4,258.9 4,851.9 Total Shortfall (3,601.2) (3,342.6) (3,904.6) 7. The Railway provides four main transport services: Colombo suburban, long- distance fast passenger, local passenger and freight. All services are losing money, although at varying rates. Cost recovery, the proportion of cost that is covered by revenue, is lowest on local passenger services and highest on freight, as summarised in Table 02. 41 Sn Lanka Railway (SLR). 445 Table 2 - Average Cost Recovery by Service - 1994 Service Revenue Var. Operating Costs Cost Recovery (Rs M) (Rs M) Colombo Suburban 213.5 554 39% Fast Passenger 340.5 636 54% Local Passenger 21.4 143 15% Freight (Ex Parcels) 200.5 308 65% The cost recovery percentages are based on variable operating costs (i.e. costs of depreciation and capital are excluded, as are fixed costs). Including such items would reduce the figures, but not change relative performance. Table 02 lists only the main transport services; the Railway also earns revenue and incurs expenditures on business such as Hitachi, Viceroy and other passenger specials, on mail and parcels, on advertising, and on lease of lands, good sheds, and other properties. 8. Low cost recovery is caused by many inter-related factors, but a root cause is a deterioration in the physical quality of track and rolling stock assets, due to past under- investment, resulting in high operating costs and in unsatisfactory service. Poor service, in turn, reduced revenues, both through a decline in demand and through an inability to charge prices that are equivalent to other modes. 9. The age of locomotives, and deferred maintenance, results in high costs for servicing and repairs and reduces reliability and availability. Clever rostering and re- scheduling of timetables might reduce requirements somewhat, but new units are needed to serve as a base for future service improvements. Deferred investment in track results in speed restrictions that delay trains and reduce utilisation of rolling stock. Deferred investment in signals results in failures that delay trains and restricts the capacity of the track to accept extra trains. Lack of proper training, tools, and facilities prevents staff from increasing productivity. Lack of information prevents management from making the best decisions. 10. The Railway has a large investment in track, signals and stations, especially to meet the peak demands of the Colombo suburban service. This investment is now being upgraded, for example, through an OECF-funded track rehabilitation programme that will remove temporary speed restrictions and renew track. It can be argued, however, that excess capacity exists, even at peak hours. For example, many peak trains are single power sets or coach sets. Expanding them to double power sets will increase peak capacity, without placing extra demands on track and signals. Increasing capacity in such a manner will make the best utilisation of the upgraded infrastructure, and reduce average costs. 446 11. Assets must be maintained and actions taken to ensure that they do not again deteriorate. Staff must be provided with necessary training, with resources such as spares and tools, and with adequate facilities. Supervisors must be encouraged to monitor the work done in their sections, to ensure that standards are met. They must be trained to motivate and manage their employees. Senior officers must have resources to plan the work of their sub-departments, and have information to monitor and control performance. 12. Improving the economics of rail transport is a long-term project. Short-term actions will halt deterioration, by solving immediate problems with locomotive reliability, by training and motivating staff, by rescheduling services to make more motive power available for peak-hour services, and so on. Medium-term activities will support permanent improvements, by raising the quality of maintenance (updated standards, more and better spares, facilities and tools, on-going staff training), by implementing information systems that will allow management to monitor operational and financial performance, by making investments to offset past deferrals, but within the guidelines of long-term business plans, and by developing new sources of revenue to fund extra spending (e.g. from advertising, development of stations and lands). Long-term actions vill allow the Railway to continue at a high level of performance, by identifying business opportunities, by tying investment to service needs, and by ensuring that management focuses on and supports the service aspects of rail transport. 13. Improving the financial performance of the Railway requires more than just increasing investment, cutting costs, and raising fares and tariffs. There have been many changes in the transport sector in the past decades, especially the expansion of the road network and the vast increase in the numbers of motor-cars, motor-cycles, buses, and lorries. To improve performance, the Railway must also reform itself, to focus its resources on providing economic transport services that meet the changing requirements of the future. B. Passenger Services - Colombo Suburban 14. The Colombo suburban services comprise Main Line trains between Colombo and Rambukkana, Coast Line trains between Colombo and Aluthgama, Puttalam Line trains between Colombo and Chilaw, and KV Line trains between Colombo and Avissawella. Cost Recoverv 15. Table 03 shows 1994 cost recovery, based on variable operating costs, separately for each of the Colombo suburban lines. 447 Table 3 - Colombo Suburban Cost Recovery by Line - 1994 Service Revenue Var. Operating Cost Cost Recovery Psgr-Km (Rs M) (Rs M) (M) Main Line 121.3 253 48% 799 Coast Line 54.4 146 37% 380 Puttalam Line 29.1 107 27% 193 KV Line 8.7 48 18% 55 Total: 213.5 554 39% 1,427 16. Cost recovery ranges from a high of 48% for the Main Line to a low of 18% for the KV Line. Only a small part of the variation is due to difference in operating cost, which is similar when expressed, for example, per train-kilometre. [The Coast Line is slightly higher, due to greater use of old and costly locomotives and coach sets, while the KV Line is slightly lower, due to smaller formations]. The variation, mostly, is due to difierences in revenue and occupancy per trip, with Main Line trains having the highest and KV Line trains having the lowest average occupancy. Demand and Occupancy 17. Average occupancy per train is summarised in Table 04, based on passenger- kilometres per train-kilometre. As most suburban trains have a maximum capacity of more than 1,000 passengers, the lower averages reflect: (i) poorly patronised non-peak trains; and (ii) that even peak trains, which are congested near Colombo, will have low occupancy over part of their trips (see Annex 1 for an example). Table 4 - 1994 Average Passenger-Kilometers per Train-Kilometre Service Avg Psgr-Km per Training-Km Main Line 559 Coast Line 503 Puttalam Line 288 KV Line 183 18. The higher average occupancy of the Main and Coast Lines is due to factors such as: (i) higher capacity peak-hour trains - up to 2,660 passengers for a double S8 power set; (ii) popular semi-express office trains that convey over 3,000 passengers per trip; and (iii) longer average trip lengths, from stations such as Veyangoda, Mirigama, and Kalutara South. Competition from buses also affects occupancy: (i) Many cities along the Main Line, such as Ragama, Gampaha, Veyangoda, and Mirigama, do not have directly connecting roads, making people more dependent on rail. This increases demand in the off-peak as well as 448 in the peak. Veyangoda, for example, does not have direct bus service to Colombo. (ii) Galle Road connects the major Coast Line stations, such as Kalutara, Panadura, and Moratuwa, and with almost 1,000 buses licensed for all or part of the distance, frequencies are every few minutes or less. (iii) Negombo Road has frequent bus service that connects most stations on the Puttalam Line, except for a few between Ragama and Kandana. (iv) High-Level Road, which runs parallel to much of the KV Line, also has frequent bus service. Peak-hour trains on the Puttalam Line have high occupancy (between Colombo- Negombo), but many trains operate in the non-peak direction with low load factors. Off- peak trains are lightly patronised due to inconvenient access at some stations, irregular and infrequent schedules, and slow speeds compared to buses. A study by Dr. Kumarage of the University of Moratuwa - Increase of Off-Peak Hour Railway Patronage - May 1994 - suggested that off-peak demand can be increased by running trains at regular intervals. Unlike other lines, which have many passengers en-training and de-training at stations along the route, most Coast Line passengers travel only to and from Colombo (see Table 05) at peak hours, when Galle Road is congested and bus times to Colombo are 20-30 minutes longer than rail times. Lack of intermediate-distance traffic might be due to the 0.5-1.5 kilometre separation between the traffic-generating commercial and mercantile centres on Galle Road and many Railway stations. Without good connecting bus service, railway stations have a restricted "catchment area", which reduces demand. Table 05 - Percentage of Passengers Travelling to Colombo Service % to Colombo Main Line 42 Coast Line 56 Puttalam Line 41 KV Line 38 KV Line trains, which are formed from older S6 and S7 power sets, have low capacity, restricting passenger volumes at peak times. The old rolling stock is subject to delays and failures, which, compared with frequent bus service on High-Level Road, encourages passengers to by-pass rail, especially at off-peak hours, when road congestion is lower. 19. A survey taken in March 1996 asked passengers to list the three most important reasons why they use rail. The survey, summarised in Table 06, shows a common pattern, but variations help identify strengths and weaknesses by line. Main Line passengers, for example, claim that rail is less expensive than bus, faster, and has more convenient access. This reflects, in part, the lack of direct road access between many stations. Coast Line passengers, who re faced with congestion on Galle Road if they use bus at peak hours, given faster speeds as the main reason for using rail, which is offset by poorer station access. Puttalam Line passengers claim that trains are less congested than bus, but unlike passengers on other lines, are less likely to agree that rail is faster. KV Line passengers 449 also agree that trains are less congested than bus, but are less likely to agree that rail is cheaper. Table 06 - Reasons why People use Commuter Trains (Percent of Passengers Giving as a Reason) Reason for Using Rail Main Line Coast Line Puttalam L KV Line Less Expensive 57% 52% 50% 44% Faster than Bus 53% 61% 37% 48% Convenient Access 47% 27% 38% 30% Convenient Timetable 46% 49% 48% 50% Safer than Bus 30% 40% 42% 46% Less Congested 28% 50% 54% 66% 20. The March 1996 survey also asked passengers how service could be improved. There was almost unanimous agreement that capacity should be increased (by increasing formations or adding extra trains) and that trains should be run without delays or cancellations (which most people put as their first priority). The main survey results are summarised in Table 7. Table 7 - Ways to Improve Commuter Service (Percent of Passengers Giving as a Reason) Reason for Using Rail Main Line Coast Line Puttalam L KV Line More Capacity 98% 96% 100% 100% No Delays/Cancellations 91% 92% 90% 90% Faster Trip Times 34% 29% 19% 40% Polite & Efficient Staff 22% 22% 16% 18% Connecting Buses 21% 21% 18% 11% More Train Information 18% 22% 25% 17% Cleaner Trains/Stations 12% 14% 12% 17% 21. Based on factors that affect relative demand by line, and on improvements requested by passengers, actions can be developed to improve service and thereby increase demand, revenue and cost recovery. These include: (i) minimising delays and cancellations by improving reliability, especially of engines; (ii) increasing capacity at peak hours, especially by running double power sets in place of single sets; (iii) decreasing trip times by running longer-distance trains (e.g. from south of Panadura, east of Veyangoda, or north of Negombo) semi-express near Colombo; (iv) coordinating with buses to feed and collect passengers to and from trains, especially at off-peak times when trains have extra capacity; and (v) promoting off-peak trains, for example, by offering price discounts during off-peak hours. 450 22. Although most passengers are conveyed by peak trains, which are generally congested, most trains are non-peak, as shown in Table 08. Some non-peak trains operate to position trains for the peak direction and others to give reasonable service in off-peak hours. It might be possible, however, to reschedule some poorly patronised off-peak trains (e.g. those that do not even pay for fuel costs) to times or routes where the number of passengers is greater. Table 08 - Comparison of Trains and Passengers Service Peak Trains Non-Peak Trains % of Psgrs Main Line 23 63 52 Coast Line 27 49 31 Puttalam Line 15 19 12 KV Line 11 19 04 Table 09 - Comparison of Ordinary Rail & Bus Fares Origin Destination Km Mode Fare Origin Destination Km Mode Fare Fort M. Lavinia 12 Bus 5.00 Fort Kandana 16 Bus 5.50 13 Rail 3.50 Fort 19 Rail 5.00 Fort Moratuwa 22 Bus 6.75 Fort Ja-Ela 20 Bus 6.50 19 Rail 5.00 23 Rail 6.00 Fort Panadura 30 Bus 7.25 Fort Seeduwa 26 Bus 6.75 27 Rail 7.00 29 Rail 7.50 Fort Kalutara S. 43 Bus 10.00 Fort Negombo 36 Bus 7.50 42 Rail 10.50 39 Rail 10.00 Fort Aluthgama 61 Bus 12.00 Fort Chilaw 83 Bus 13.50 60 Rail 12.50 83 Rail 17.50 Fort Nugegoda 12 Bus 4.50 Fort Ragama 14 Bus 5.50 12 Rail 3.50 16 Rail 4.50 Fort Maharagama 17 Bus 5.50 Fort Gampaha 29 Bus 7.75 17 Rail 4.50 28 Rail 7.50 Fort Homagama 26 Bus 7.00 Fort Veyangoda 42 Bus 10.75 27 Rail 7.00 38 Rail 10.00 Fort Avissawella 61 Bus 12.00 Fort Polgahawela 76 Bus 13.25 62 Rail 16.00 74 Rail 15.50 451 Table 9 cont. - Comparison of Season Tickets Rail & Bus Fares Origin Destination Km Mode Fare Origin Destination Km Mode Fare Fort M. Lavinia 12 Bus 136.50 Fort Kandana 16 Bus 150.50 13 Rail 73.00 19 Rail 106.00 Fort Moratuwa 22 Bus 184.50 Fort Ja-Ela 20 Bus 177.50 19 Rail 106.00 23 Rail 128.00 Fort Panadura 30 Bus 198.00 Fort Seeduwa 26 Bus 184.50 27 Rail 150.00 29 Rail 161.00 Fort Kalutara S. 43 Bus 273.00 Fort Negombo 36 Bus 205.00 42 Rail 233.50 39 Rail 217.00 Fort Aluthgama 61 Bus 328.00 Fort Ragama 14 Bus 150.50 60 Rail 299.00 16 Rail 89.00 Fort Nugegoda 12 Bus 123.00 Fort Gampaha 29 Bus 212.00 12 Rail 67.00 28 Rail 155.50 Fort Maharagama 17 Bus 150.50 Fort Veyangoda 42 Bus 293.50 17 Rail 95.00 38 Rail 211.50 Fort Homagama 26 Bus 191.50 Fort Polgahawela 76 Bus 362.00 27 Rail 150.00 74 Rail 307.50 Passenger Fares 23. Railway fares have traditionally been lower than bus fares, especially for short distances and for season tickets (see Table 09), perhaps to encourage people to patronise rail and thus reduce congestion on roads. If so, the policy might no longer be appropriate. Table 06 suggests that while price is an important factor in choosing rail, it is not the only one. Quality of service is also important. Passengers see rail as being safer, generally faster, and even when congested, more comfortable than bus (eg. trains do not have conductors who shout and push, as do buses). If problems with on-time performance are improved, people will be attracted to rail, even if fares are the same as the bus. 24. It has been suggested that rail passengers are poorer than average, and thus are not able to pay higher fares, or even pay the same fares as paid by bus passengers. Information on income collected in the March 1996 survey suggests that rail passengers have higher income than average, and also have higher income than bus passengers. Table 10 summarises rail passenger income by line, based on 2,155 responses, and compares to 452 bus and office van. The lower figures for bus might reflect: (i) a shift to office vans or mctor-cycles as incomes increase; and (ii) an availability of company-sponsored private bus and office van services for higher-paid employees in the private sector. Table 10 - Income Distribution and Average - Rail. Bus & Van Service Under Rs 3.000 Rs. 3,000 - 7.500 Over Rs. 7.500 Average (Rs) Main Line 32% 54% 14% 4,600 Coast Line 22% 58% 20% 5,600 Puttalam Line 34% 53% 13% 4,600 KV Line 20% 57% 23% 5,700 Total RAIL 29% 55% 16% 4,900 Bus * 62% 38% - 2,900 Office Van* 4% 89% 7% 4,900 * Based on a survey of 221 bus passengers and 45 office van passengers taken in 1992, increased by 40% to reflect 1996 levels. 25. Railway season ticket prices are based on 8 return trips per month for passengers travelling more than 55 kilometres and on 11 return trips per month for passengers travelling less than 55 kilometres. This gives a discount of 45-60% off the ordinary ticket price, compared to a discount of 35% offered by peoplized buses. Railway tickets also offer unlimnited use, whereas bus tickets are for a fixed number of trips. Government servants, who make up almost 45% of season ticket passengers, receive an additional concession, as their departments pay 75% of the season ticket price. The government servant thus gets a monthly season ticket for less than the cost of three days travel at ordinary ticket prices. 26. A comparison of income of season tickets and ordinary ticket passengers is shown in Table 11. The data reveal almost no difference between the two types of passengers. Table 11 - Income by Type of Passenger Income Range Ordinary Ticket Psgr Season Ticket Psgr UnderRs. 3,000 28% 29% Rs 3,000 - 7,500 56% 55% Over Rs 7,500 16% 16% Average (Rs) 4,900 4,900 453 Improving Cost Recovery 27. Improving cost recovery requires actions to increase revenues as well as to reduce costs. Service improvements will increase demand and make fare increases, if warranted, more acceptable. The most important immediate improvement is to run trains on time and to avoid cancellations. Some trains run in semi-express service; this can be expanded to include more trains operating beyond Veyangoda, Panadura and Negombo. Express trains are very popular, and will divert passengers away from slow trains, making more space available for people using intermediate stations. If trains run on time, arrangements can be made with bus companies to provide connecting service. Both parties would benefit under such an arrangement. Issues of polite and efficient staff and cleanliness can be addressed through training, and closer supervision. 28. In the longer-term, investment in extra power sets will be required. These are most suitable for commuter traffic, given high capacity, easy entry and exist, and fast acceleration and speeds. Existing coach sets can still productively be used to operate semi-express trains from outlying areas. With fewer stops, disadvantages of slow acceleration and constrained entry and exit will be offset. 29. It might be argued that some fare revisions are warranted. There appears to be little justification for having lower fares for rail than for bus. Rail has quality advantages, such as greater comfort and safety and faster speeds than bus, to attract people away from road transport. Such a change in pricing would increase short distance fares and season ticket prices, but have little or no affect on longer-distance fares. 30. In the longer-term, costs can be reduced by implementing actions such as those listed in the introduction. Immediate benefits can be gained, however, from re-scheduling trains to better correspond to traffic volumes. For example, many trains originate and terminate at Polgahawela on the Main Line, even though occupancy beyond Veyangoda and Mirigama might fall below 10-20%. If some of the trains are terminated closer to Colombo, they can be used to make extra trips. If passengers to Polgahawela are given more semi-express trains, faster times can be substituted for reduced frequencies. Economic Benefits of Suburban Services 31. It is generally accepted that commuter rail services generate external economic benefits by reducing road traffic. These benefits include savings in road vehicle operating costs, road construction and maintenance costs, pollution and road passenger's time. A study was done on the relationship between the Coast Line and Galle Road to estimate the amount of these savings, using the Road Congestion Cost Model available at the Transport Studies and Planning Centre (TSPC). 454 32. The study was done as follows: (i) a base case was developed using 1995 vehicle operating costs, road capacities and traffic counts from five locations on Galle Road, as provided by Mr. D. S. Jayaweera, Dy Director, TSPC. The locations were near Kollupitiya, Dehiwela, Ratmalana, Panadura and Kalutara South, giving five links from Colombo to Kalutara. (ii) an alternative case was developed assuming that all north-bound suburban rail passengers between 06:00 and 09:00 would shift to road. Numbers of rail passengers corresponding to the five road links were estimated, based on a mix of information from in-train tallies, station boarding surveys, and interpolation. It was assumed that income would determine modal shift, with lower income groups shifting to bus and the highest income groups shifting to car (i.e. less than Rs 5,000 to bus; Rs 4,000-Rs 10,000 to bus/office- van/motor-cycle, Rs. 10,000-15,000 to office-van/motor-cycle/car, and over Rs 15,000 to car). The net result was an assumed shift of 75% to bus, 10% to office-van, 10% to motor-cycle and 5% to car. (iii) passengers by link were converted to vehicle counts, based on average peak- hour occupancies. (iv) the model was re-run using the new vehicle count data. Table 12 - Estimated Increase in Vehicle Operating Cost (VOC) VOC For VOC Due Total Increase Road Link Extra Vehicles to Congestion in VOC (Rs M) (Rs M) (Rs M) Colombo-Kollupitiya 8 15 23 Kollupitiya-Dehiwela 9 28 37 Dehiwela-Ratmalana 15 47 62 Ratmalana-Panadura 15 54 69 Panadura-Kalutara 8 8 16 TOTALS: 55 152 207 33. The results of the study, which are summarised in Table 12, show a large increase in vehicle operating costs, much greater than expected from the increase in road traffic. This is due to an increase in peak hour congestion; in fact, the model suggests that at certain times the road links between Kollupitiya and Ratmalana would become completely blocked and that average trip time would increase by almost 50%. 455 34. In addition to vehicle operating costs, the model calculates a cost to road users for delays (based on their value of time). The results, which are summarised in Table 13, show high costs due to the extra congestion. Table 13 - Estimated Road User Time Costs Time Costs for Time Costs for Total Increase Road Link Extra Users to Congestion in Time Costs (Rs M) (Rs M) (Rs M) Colombo-Kollupitiya 5 35 40 Kollupitiya-Dehiwela 6 64 70 Dehiwela-Ratmalana 15 133 148 Ratmalana-Panadura 9 150 159 Panadura-Kalutara 4 12 16 TOTALS: 39 394 433 35. The results shown in Tables 12 and 13 relate only to the morning peak, but similar results could be expected from the evening peak, and, to a much lesser extent, from the off-peak. This suggests that operating Coast Line suburban trains saves over Rs 400 million per year in vehicle operating costs, including over Rs 300 million relating to congestion. In addition, there is a further saving in time costs. In comparison, the loss from operating the Coast Line suburban service was estimated at about Rs 92 million for 1994, counting only variable operating costs, or Rs 225 million per year, also counting variable capital costs. The benefits of reduced vehicle operating costs exceed the losses of operating the rail service. 36. With growth in road traffic and increasing congestion, the benefits of rail operation will increase. Assuming a growth rate of 6.4% per year and no increase in road capacity, the model estimates that savings in vehicle operating costs for the morning peak will increase from Rs 207 in 1995 to Rs 480 million in 2005 and time savings will increase from Rs 433 million to Rs 1,100 million. 37. The data in Tables 12 and 13 show that most benefits of operating rail service occur between Colombo and Panadura. This is because of lesser road traffic and congestion between Panadura and Kalutara. This suggests that the economic benefits of expanding the present peak hour rail service is greatest between Colombo and Panadura. 38. Similar studies have not been done on the Main, Puttalam, and KV Lines, but certain inferences can be made. First, because rail service diverts passenger traffic away from the busy Kandy, Negombo, and High-Level roads, economic benefits exist to set against losses. Second, the benefits are greatest where traffic levels are highest; namely, between Colombo-Veyangoda (or Mirigama), Colombo-Negombo, and Colombo- Homagama, respectively. 456 C. Passenger Services - Long-Distance Fast Passenger 39. Long-distance fast passenger services comprise Main Line trains between Colombo and Kandy/Badulla, Coast Line trains between Colombo and Galle/Matara, Northern Line trains between Colombo and Anuradhapura/Vavuniya, and Batticaloa/Trincomalee Line trains between Colombo and Polonnaruwa/Batticaloa/Trincomalee. Cost Recovery 40. Table 14 shows 1994 cost recovery, based on variable operating costs, separately for each of the long-distance fast passenger services. Table 14 - Fast Passenger Cost Recovery by Line - 1994 Service Revenue Var. Operating Cost Cost Recovery Psgr-Km (Rs M) (Rs M) (M) Main Line 123.6 236 52% 553 Coast Line 106.7 161 66% 605 Puttalam Line 89.0 170 52% 434 KV Line 21.2 69 31% 97 Total: 340.5 636 54% 1,689 41. Cost recovery ranges from a high of 66% for the Coast Line to a low of 31% for the Batticaloa/Trincomalee Line. Like suburban trains, only a small part of the variation is due to differences in cost, with Coast and Northern Line trains being slightly higher, per train-kilometre, due to longer formations, and Main Line trains slightly lower, despite gradients and use of banking engines, due to shorter formations. Demand and Occupancy 42. Most of the variation in cost recovery of fast passenger trains is due to differences in revenue and occupancy. Average occupancy is summarised in Table 15, based on passenger-kilometres per train-kilometre. Occupancy of Main Line trains, especially to Kandy, is limited by the gradient at Rambukkana, which restricts train formations. Several Northern Line trains have empty runs between Anuradhapura and Vavuniya. Demand for Batticaloa and Trincomalee trains is depressed by security problems in the east - potential is seen by the fact that traffic more than doubled during a cease-fire in 1995. 457 Table 15 - 1994 Average Passenger-Kilometres per Train-Kilometre Service Avg Psgr-Km per Train-Km Main Line 400 Coast Line 770 Northern Line 510 BCO/TCO Lines 260 43. Bus competition affects occupancy: (i) Main Line passengers between Colombo and Kandy have frequent bus service, including air-conditioned reserved buses that operate every 30 minutes. Passengers to popular destinations such as Hatton, Nuwara Eliya, Bandarawela, and Badulla, also have a choice of buses, which are faster and lower priced than rail due to shorter road distances. Given longer rail times and higher fares, many passengers between Colombo and Upcountry are government servants using warrants, for which their departments pay. (ii) Coast Line passengers have a choice of frequent express and air-conditioned buses. (iii) Fewer buses now operate to the north and east, due to security problems. 44. A survey taken in March 1996 asked long-distance passengers to list the three most important reasons why they use rail; results are summarised in Table 16. Most passengers agree that trains are less congested than buses and are safer - it seems to be a general consensus that rail is more comfortable than bus. Regarding variations by service: (i) fewer Coast Line passengers refer to reservations because most Coast Line trains do not offer reserved seats; and (ii) lower percentage of Main Line passengers agreeing that rail is faster reflects the more round-about, and slower, route taken by rail. Table 16 - Reasons why People use Fast-Passenger Trains (Percent of Passengers Giving as a Reason) Reason for Using Rail Main Line Coast Line Northern Line Less Congested 75% 61% 63% Safer than Bus 58% 59% 56% Less Expensive 32% 41% 31% Can Make Reservations 29% 10% 20% Can Take Luggage 27% 16% 15% Faster than Bus 23% 35% 40% Convenient Timetable 13% 28% 24% 45. Results of a survey that asked passengers how to improve service are summarised in Table 17. Requests for extra capacity are lower than for suburban services, which might reflect less congestion or more acceptable frequencies. This is supported by the fact 458 that most respondents also claim that rail is less congested than bus. The need to run trains on time, however, is again emphasised (most people put this as their first priority). There is a greater call for connecting buses, which might reflect that long-distance passengers are coming from a wider catchment area than suburban passengers. There was little difference in suggestions between 1 st/2nd and 3rd class passengers. Table 17 - Ways to Improve Fast Passenger Service (Percent of Passengers Giving as a Reason) Service Improvements Main Line Coast Line Northern Line More Capacity 70% 69% 63% No Delays/Cancellations 66% 87% 74% Connecting Buses 35% 33% 28% Cleaner Trains/Stations 33% 14% 35% Faster Trip Times 31% 33% 31% Polite & Efficient Staff 28% 28% 27% 46. The Railway has a natural advantage, in that it connects most major population centres. Building on this advantage by improving service will increase revenue and improve cost recovery: (i) Increasing capacity by increasing formations is much less expensive than running extra trains. With investment in high-horsepower locomotives, for example, longer and more efficient trains can be operated upcountry and at popular times on other lines. (ii) Delays can be reduced through a combination of short- and long-termi actions, such as improving the quality of locomotive maintenance (standards, spares, tools, staff training), monitoring, and upgrading infrastructure. (iii) If trains generally run on time, buses will be more willing to connect to give and collect passengers. (iv) Cleanliness and staff courtesy and efficiency, can be improved through a combination of better staff training, motivation and supervision. 47. Many fast-passenger trains run slow over part of their route. This gives local service to certain outlying areas, but increases trip times for long-distance passengers. Short-distance passengers, who pay correspondingly low fares, increase congestion, reduce comfort, and sometimes displace long-distance passengers, who pay higher fares. If alternate arrangements are made for local passengers, such as provision of local feeder service using rail-buses or connecting road buses, trip times can be reduced for the benefit of long-distance passengers, improving service and increasing demand. Faster trip times will also increase rolling stock utilisation, by allowing more trips to be made per day. Local passengers will be asked to use buses, but will not be deprived of transport. Passenger Fares 48. Most fast-passenger trains offer first, second and third class service, reserved and unreserved. Long-distance unreserved third-class fares are equivalent to bus fares on parallel routes. Second class rail fares are somewhat comparable to fares for reserved 459 intercity air-conditioned buses, although rail service does not include reservations (which are charged extra) or air-conditioning, and although rail trip times are often longer. First class service has no bus equivalent, and is priced at almost double second class. 49. Average monthly income of third class passengers on fast-passenger trains is Rs 4,500, which is similar to that of third class passengers on suburban trains. Average monthly income of first and second class passengers is somewhat higher, at Rs 6,800. 50. Given the relatively high price of first and second class, and the availability of express buses and reserved air-conditioned express buses, most people using first and second class are government servants with warrants (for which their departments pay). It is estimated that 80-90% of first class passengers and 60-75% of second class passengers use warrants. 51. Most fast-passenger trains stop at major stations in the Colombo suburban area, such as Panadura, Kalutara South, Gampaha, Veyangoda, Polgahawela and so on. The fare for passengers travelling non-stop between Kalutara South and Colombo, for example, is the same as for passengers on a train that stops at every intermediate station. The express passengers, however, save 15 minutes in travel time and are not disturbed by people constantly getting on and off the train. Fast-passenger trains that run at office times get very congested, as they are popular with commuters, who pay lower fares by using season tickets. 52. Coaches that provide reserved accommodation charge higher fares than unreserved coaches, but generally earn less revenue per trip. This is because the reservation or accommodation charges do not offset the smaller numbers of passengers accommodated, especially the elimination of standing passengers. Third class sleeperettes, for example, earn I/ less than third class coaches and second class sleeperettes earn '/A less than second class coaches. First class sleeping berths, for example, earn less revenue per trip even than ordinary third class coaches. Table 18 compares the maximum revenue per trip between Colombo and Badulla for first class berths and third class coaches. Table 18 - Maximum Revenue per Trip for Berths and 3rd Class Coaches (Between Colombo and Badulla) Class of Service No. of Passengers Max. Revenue per Trip First Class Berth 12 Rs 4,368 Third Class Coach 100* Rs 6,000 * Assuming 80 seated and 20 standing passengers 460 Improving Cost Recovery 53. Cost recovery can be increased by improving service to raise passenger demand, especially for people travelling long-distances at full fares, by adjusting fares as necessary to reflect quality of service and competing bus fares, and by reducing costs. 54. Fast-passenger trains do not have a consistent role. At times, they are expected to be express trains, at other times, local trains, office trains for commuters, or even school trains. The expectations are often contradictory - express speeds versus frequent stops, long-distance passengers versus local passengers, full-fare ordinary tickets versus discounted season tickets. Short-distance passengers, who pay small fares, increase congestion and reduce comfort for long-distance passengers, who pay higher fares. Season ticket holders occupy seats, but pay less than half the fare of ordinary passengers, who mnight have to stand. A possible approach to this inconsistency is to introduce additional express intercity trains, sinnilar to the ones operated between Colombo and Kandy. These would have all-reserved seats, for first, second, and third class passengers, perhaps at slightly higher fares, high quality in-train services (e.g. meals and drinks, attendants, music, access to cellular phones for first class passengers, and so on), express schedules, and connecting rail or bus services at junctions and terminals. As a start, one of the existing fast-passenger trains on each line could be converted to the new format. It is not proposed to introduce a copy of the "Orient Express", but something of slightly higher quality than the Colombo-Kandy Intercity trains. 55. Some fare revisions seem warranted for reserved coaches, to ensure, at least, that they do not earn less revenue per trip than ordinary unreserved coaches. To put into perspective, if the loss per third class passenger between Colombo and Badulla is about Rs 30-40 per trip, based on operating costs, then the loss per first class passenger is about Rs 300-400. 56. Suggestions to control costs, offered in the introduction and for suburban trains, also apply to fast-passenger services. Trains might be re-scheduled to better match demand, minimise empty running, and increase locomotive utilisation. Furthermore, quality of maintenance should be improved, facilities upgraded in high traffic areas, assets properly maintained, and supervision and performance monitoring increased. In the longer term, train formations should be standardised to reduce shunting and improve utilisation of carriages. User of higher horsepower locomotives will allow the operation of longer formations and more efficient trains. D. Passen2er Services - Local 57. Local passenger services comprise Coast Line trains between Aluthgama-Galle- Matara, Puttalam Line trains between Chilaw-Puttalam, Upcountry trains between 461 Polgahawela-Kandy, Kandy-Matale, and Kandy-Nawalapitiya-Badulla, the Maho- Kurunegala baby trains, and other trains running between Maho-Polonnaruwa and to Mihintale (now suspended). 58. Table 19 shows 1994 cost recovery, based on variable operating costs, for each of the local services. Cost recovery ranges from 18% for the Aluthgama-Galle-Matara services to a low of just 4% for that portion of the Puttalam service between Chilaw and Puttalam. Like suburban and fast-passenger trains, variable costs per train-kilometre are similar for all local services. Table 19 - Local Passenger Cost Recovery by Line - 1994 Service Revenue Var. Operating Cost Cost Recovery Psgr-Km (Rs M) (Rs M) (M) Aluthgama-Matara 7.2 39 18% 54 Chilaw-Puttalam 0.7 17 04% 05 Upcountry 11.5 65 18% 78 Maho-Kurunegala 1.4 11 13% 08 Others 0.6 11 05% 04 Total: 21.4 143 15% 149 Demand and Occupancy 59. As is true for suburban and fast-passenger services, most of the variation in cost recovery of local trains is due to revenue differences. Average occupancy is summarised in Table 20, based on passenger-kilometres per train-kilometre. Table 20 - 1994 Average Passenger-Kilometres per Train-Kilometre Service Ave Psgr-Km per Train-Km Aluthgama-Matara 200 Chilaw-Puttalam 50 Upcountry 210 Maho-Kurunegala 130 Others 50 60. Aluthgama-Matara trains run parallel to Galle Road and Chilaw-Puttalam trains run parallel to the Puttalam road, so are subject to bus competition. Many of the upcountry trains, on the other hand, serve villages that do not have direct road connections. Most major upcountry stations have good road access, although the roads do not always run parallel to the rail lines. Many villages between Maho-Kurunegala and between Maho-Polonnaruwa also do not have connecting road access. 462 61. The results of a survey taken in March 1996, which asked upcountry and Aluthgama-Galle-Matara passengers why they use rail, are summarised in Table 21. The reasons why people use local trains are similar to the reasons why they use fast-passenger trains; they are less congested, less expensive, and safer than the bus. The claim of less congestion corresponds to the low average occupancies seen in Table 20. It is worth noting that 15% of upcountry passengers claim they have no other choice than rail, whereas only 2% of Aluthgama-Galle-Matara passengers, who have access to Galle Road, imake a similar claim. Table 21 - Reasons why People use Local Passenger Trains (Percent of Passengers Giving as a Reason) Reason for Using Rail Upcountry Aluthgama-Matara Less Congested 69% 83% Less Expensive 58% 48% Safer than Bus 49% 65% Convenient Timetable 28% 34% Convenient Access 27% 20% Faster than Bus 21% 18% No Other Choice 15% 02% 62. Local passengers were also asked how service could be improved; the results are summarised in Table 22. The same pattern is seen as for other services: that trains should run on time and that there should be more capacity. Again, improving on-time performance is ranked as the first choice by most people. Table 22 - Ways to Improve Local Passenger Service (Percent of Passengers Giving as a Reason) Reason for Using Rail Upcountry Aluthgama-Matara No Delays/Cancellations 81% 89% More Capacity 79% 73% Faster Trip Times 38% 35% More Train Information 33% 31% Polite & Efficient Staff 24% 22% Connecting Buses 20% 29% 463 Passenger Fares 63. To the extent that local passenger fares are lower than bus fares on parallel routes, some adjustment might be warranted. 64. Average monthly income of upcountry local passengers is about Rs 4,200 slightly lower than passengers on other services. Average monthly income of local passengers on the Aluthgama-Galle-Matara service, is similar to most suburban passengers, at about Rs 4,900 per month. Improving Cost Recovery 65. Cost recovery of local trains is very poor because of low demand. Improving service will increase occupancy and revenue, and make trains more economic, but many trains serve areas where the potential to increase demand is limited. For these services, the use of lower cost alternatives should be considered. Where parallel roads exist, for example, passengers might be transported by bus at a fraction of the cost of operating trains. Buses can be used even where roads do not exactly parallel existing tracks. They only need to provide service from the catchment areas of minor stations to connecting stations. Passengers who want to travel longer distances by rail will, therefore, still have an opportunity to do so. Where road service is not practical, and where demand is not enough to fill trains, lower cost rail-buses might be used. This is now being explored on a trial basis on the Puttalam Line between Negombo, Chilaw and Puttalam. Use of the rail bus is expected to save Rs 5 million per year just in fuel costs. 66. Other general actions to improve productivity of staff will also benefit local trains. It is difficult, however, to justify new investment, when revenue from the local services does not even cover expenditures on fuel. Economic Benefits of Local Services 67. Roads are starting to become congested into Kandy and into Galle. At present, the Kandy and Galle local trains do not carry large numbers of passengers. With traffic growth and increasing road congestion, however, they might play a more important economic role, by reducing vehicle operating and congestion costs, in a similar manner, but smaller scale, as the Colombo commuter services. E. Freight Services 68. The Railway transports many commodities, but the majority of tonnage is made up of only three items (or 5 including fertiliser and cement); the rest are transported in much lesser volumes. This is shown in Table 23, which presents 1995 tonnage by commodity. 464 Table 23 - Freight Tonnage by Commodity Commodity 1995 Tonnage ('000) Percent of Total Limestone 546 44% Oil Products 407 33% Flour 142 11% Fertiliser 69 5% Cement 35 3% Other Agricultural 18 1% Other Commodities 32 3% Total 1,249 100% Although limestone is the main commodity by tonnage, it moves only a short distance, and thus falls behind oil products and flour in terms of tonne-kilometres and revenue. Cost Recovery 69. Overall, the cost recovery of freight is about 65%, based only on variable operating costs. This reflects a very wide range, however, as shown in Table 24. Even within a commodity there is a variation in cost recovery, depending on wagon type used, origin-destination, loading weight, and so on. The cost recovery for oil products, for example, ranges from under 60% for oil moving upcountry in 4-wheel wagons to over 100% for aviation oil moving to the airport at Katunayake. It should be noted that even when cost recovery, based on variable operating costs, is over 100%, the Railway is not making a profit. Revenue must also pay for depreciation and capital costs of the investment in wagons, locomotives and facilities. Table 24 - Average Cost Recovery by Commodity Commodity Cost Recovery Limestone 80% Oil Products 85% Flour 60% Fertiliser/Cement 30% Other 30%-80% Total: 85% 70. The variation in cost recovery is due both to variations in revenue (tariffs) and to variations in costs. The tariff for limestone, for example, has been increased from time to time, to cover increasing costs. The tariff for diesel oil has increased over 600% in the past 15 years, from a low base, whereas that for fertiliser has increased by less than 25% in 465 the same period. Costs are also an important factor. Flour has the lowest cost, because it moves in modem bogie (8-wheel) wagons at high loading weights of 45-47 tonnes, in fairly large volumes, for long distances. Fertiliser and cement have high costs, because they move in inefficient 4-wheel wagons, at low loading weights of 10-13 tonnes, in small lots, to many destinations. All upcountry shipments are very costly, because gradients force the Railway to incur expenses for banking locomotives or to reduce train weights to very low levels. Demand 71. Discussions with goods shippers reveal that most are dissatisfied with the service they receive from the Railway. The three main complaints are that not enough wagons are supplied for loading when requested, that reliability is poor (sometimes there are long delays, even for weeks, before wagons are delivered), and that wagons are often in poor condition or dirty. On the other hand, all agree that rail tariffs are lower than other modes. 72. Most shippers prefer to use lorry, not only because of poor rail service, but because lorries can offer door-to-door service. Many own their own lorries, or fleets of lorries, because it gives them more confidence: that the lorries will be available when needed; that they will be in good condition; that the deliveries will be made on time; that goods will not be lost en route; and that if problems do occur, with the lorries, the load, or the customers, their own staff will be on hand to solve them. On the other hand, most shippers also recognise that owning lorries is more expensive than hiring lorries or using rail, because of low utilisation. They are willing to accept this extra expenditure, as a guarantee that transport will be available when needed, and out of dissatisfaction with the services offered by hired lorries and rail. 73. Although many companies own their lorries, hired lorries are also widely used: by those who do not own lorries, and even by companies with lorries - to take extra loads or longer-distance loads. Despite some concerns about reliability of deliveries and the condition of hired lorries, they are still often preferred over rail, even at higher tariffs. 74. Shippers who do use rail give it one main advantage - that it can transport large volumes. It requires 30 lorries, for example, to transport the same tonnage of flour as a single train. This advantage explains, in part, why shippers of petroleum, flour, limestone, fertiliser and cement still use rail, despite other complaints. 75. Discussions with shippers who presently use rail reveal that much more tonnage is available to be transported, if the Railway can improve service, especially by transporting more traffic on a reliable schedule. Delivery need not be on the same day, even 48 hours is acceptable, as long as delivery is assured. Table 25 compares 1995 tonnage with available tonnage, for the three major commodities. 466 Table 25 - Comparison of 1995 Tonnes versus Available Tonnes Commodity 1995 Tonnes ('000) Available Tonnes ('000) Limestone 546 1,000 Petroleum Products 407 650 Flour 142 240 Total 1,095 1,890 Goods Tariffs 76. Most goods tariffs have not been increased since 1990, despite increasing costs. Even then, tariffs for many commodities were increased only by small amounts. In contrast, lorry tariffs have been increased from time to time, and now are generally higher than rail tariffs. Rail and lorry tariffs for major commodities are compared in Table 26. Table 26 - Comparison of Rail and Lorry Tariffs (Excluding Upcountry) Commodity Rail (Rs per tonne-km) Lorry (Rs per tonne-km) Limestone (Aruvakalu-Palavi) 50 (per tonne) 100-125 (per tonne) Petroleum 1.60-2.00 2.60 Flour 0.80 3.00 Fertiliser/Cement 0.60 1.50-3.00 The range in lorry tariffs for fertiliser and cement is based on information collected from shippers, and is representative also of other bulk commodities. It appears that shippers who can give traffic in both directions are charged a lower tariff than shippers who give traffic in only one direction, even if the lorry operators manage to find return loads. Individual lorry owner-operators will sometimes accept lower tariffs, but are likely to have older vehicles. Improving Cost Recovery 77. For the three major commodities (limestone, petroleum and flour), rail has a competitive advantage over lorries. In all three cases, rail has direct access at origin and at destination, and traffic volumes are high enough to operate efficient unit-type trains. For fertiliser, the advantage of rail is reduced, because it does not have direct access to most of the mixing plants. Furthermore, port access is constrained by limited track, and inefficient shunting operations, which reduces the number of wagons that can be loaded at one time. As a result, fertiliser is trans-shipped by lorry, which results in additional handling expense. A similar situation applies to cement. Rail has access to the cement plants, but final distribution must be done by lorries. Many other commodities, which move in small volumes, also require re-handling at origin and destination. 467 78. Tariff increases -- in some cases, large increases -- appear warranted, especially if the Railway can improve volumes and reliability as requested by the major shippers. Discussions with several shippers revealed a willingness to pay fares that are competitive with lorries, if the Railway can given an equivalent level of service. 79. Improving cost recovery, however, is not just a matter of increasing tariffs. The cost of transporting many commodities is so high that cost-based tariffs would be unacceptable to shippers. Costs must be reduced, in part by implementing general productivity measures and reforms mentioned elsewhere in this report, and in part by improving the efficiency of freight operations, as listed below. The first three actions can be implemented almost immediately: operate express unit-type trains directly from origin to destination. This will improve locomotive utilisation by eliminating delays at intermediate stops, will reduce wagon cycles from the present 10-20 days to 5 days or less (i.e. wagons will shuttle back and forth between origin and destination), will reduce of eliminate shunting, and will improve service by ensuring that train-load volumes can be shipped on a daily basis and be delivered within 24 hours. accept traffic only in train-load lots. This will improve locomotive utilisation, as they will always have a full load, and will reduce shunting needed to make up full trains. use only bogie wagons. Bogie wagons are less expensive to maintain than 4-wheel wagons, which are very old and in poor condition, yet bogie wagons can carry over three times as many tonnes per trip. In addition, 4-wheel wagons de-rail more frequently than bogie wagons, and trains formed with 4-wheel wagons are subject to speed restrictions that reduce locomotive utilisation. assign higher-horsepower locomotives to goods. This will permit more tonnes to be transported per trip, reducing costs and improving service to shippers. There is enough flour and oil traffic, for example, to justify running longer trains than at present. encourage shippers to give direct access to the Railway by building sidings or leasing railway goods sheds. This will eliminate the need for re-handling, and thus make rail more competitive. - contract with lorries to provide rail/road door-to-door service. This might be done using containers, for example, to avoid the cost of re-handling between rail and lorry. 80. If tariffs are increased, some miscellaneous traffic will no longer be offered by rail. This will, in fact, be an advantage, as such traffic generally moves in small lots that can readily be transported by lorry. At present, miscellaneous traffic brings in little revenue, 468 but uses a disproportionate amount of resources - single 4-wheel wagons must be placed for loading, shunted at origin and destination, wait for space on trains (often displacing higher-revenue traffic), trains must be stopped for the wagons to be attached and detached, and locomotive utilisation is reduced. If the resources are focused instead on high-volume long-distance traffic, many more tonnes can be transported for the same effort. 81. If tariffs are set at levels that are competitive with lorries, if the Railway focuses on traffic for which it has a competitive advantage (i.e. lower cost), and if efforts are made to make operations more efficient as described above (which will also improve service), freight will not only cover variable operating costs, but cover capital costs and make a profit. Economic Benefits 82. In addition to making a profit for the Railway, freight can provide external economic benefits. Many lorries travel in and out of Colombo, using the same roads as cars and buses, adding to congestion. In fact, lorries, because of their size and slow speeds, cause a disproportionate amount of congestion. If the Railway can transport more freight, and thus reduce the numbers of lorries on the road, there will be savings from reductions in congestion, as described for the Coast Line/Galle Road. 83. The Sri Lanka Road User Charges Study, prepared by the Transport Studies and Planning Centre, indicates that the damage lorries cause to roads is not recovered by taxes and licensing fees. If traffic is transferred from road to rail, there would be an additional net benefit, in reduced damage to roads and road maintenance costs. 84. Rail has a cost advantage over lorries only when transporting goods in full train loads for long distances, or when operating in a shuttle service at frequent intervals, to ensure rolling stock assets are efficiently used. Rail can play a role in regional development, by economically transporting goods between Colombo and the regions, but only if volumes are great enough to support an efficient train operation. This would probably require depots to be set up at various locations to collect and consolidate traffic. Lorries would still be required to collect and distribute traffic at origin and destination. 469 ANNEX 1 Passenger Traffic Talley - Between Fort and Miripama Train 168 (FOT-MIR) - Double Power Set Passengers Stn Km's On Off In Train Occ FOT (2) 1,583 - 1,583 59% MDA 0 1,305 12 2,876 108% DAG 2 150 12 3,014 113% KLA 4 - - 3,014 113% WSL 6 - - 3,014 113% HUN 8 - - 3,014 113% EDM 10 - - 3,014 113% HRP 12 - - 3,014 113% RGM 14 - - 3,014 113% WPA 16 - - 3,014 113% BTU/BGH 18 - - 3,014 113% GAN 20 126 697 2,443 92% YGD 22 21 84 2,380 89% 24 - - 2,380 89% GPH 26 205 1,305 1,280 48% DRL 28 6 57 1,229 46% BEM 30 6 157 1,078 40% MGG 32 5 102 981 37% HDP 34 11 39 953 36% VGD 36 42 295 700 26% WRW 38 3 45 658 25% KEN 40 1 40 619 23% PLL 42 9 103 525 20% GND 44 3 52 476 18% 46 - - 476 18% WRD/MIR 48 - 476 0 0% Psgrs Tot 3,476 3,476 Avg 72% Passengers Number Capacity S8 Engine 96 2 192 S8Coach 325 6 1,950 S8 Dummy 260 2 520 TOTAL: 2,662