69378 Operationalizing Political Economy South Asia Political Economy and Governance Issues Note No. 1 Urban Bus Operations in Dhaka Unsafe, polluting buses are allowed to operate on Dhaka’s already choked roads. Yet past efforts to regulate and reform bus operations have been thwarted by the efforts of business syndicates, politicians, police and trade unions. A strategic transport plan has been prepared, but effective implementation will take actions on many fronts. The driving force for reform could come from owners of large bus companies, with support from their workers, associations, and trade unions, along with civil society groups, and the media. The Bank and other international partners can support reform efforts, but they will only succeed with sustained, determined and courageous leadership backed by a cohesive and determined Bangladeshi political coalition. This note summarizes the results of a political regulate public transport vehicles. The Regional economy analysis [1] which aimed to increase Transport Committee (RTC) is appointed by the the Bank’s understanding about the reasons why BRTA to award route permits. The Dhaka unsafe, polluting buses continue to operate on Transport Coordination Board (DTCB) plans Dhaka’s already choked roads, despite efforts to and coordinates public transport services. The regulate and reform bus operations. It addresses Dhaka Metropolitan Police (DMP) is responsible three sets of issues: for enforcing regulations. The Dhaka City Corporation (DCC) is responsible for overall 1) What are the systemic problems that municipal governance and administration. continue to plague the bus sector in Development partners such as the World Bank Dhaka ? have provided support to these authorities in 2) Why have these ailments persisted? infrastructure development, institutional 3) How can coalition building and a good strengthening and policy support. Other key communications strategy help to address stakeholders include bus owners (individuals or these pathologies? companies), bus workers, commuters, owners of other modes of transport, civil society, the Context media, and politicians. There are around 6700 buses in Dhaka, Despite the extensive regulatory framework and operating on about 170 kms of road space (out work of interested stakeholders, bus transport in of around 3000 kms) that are fit for buses. The Dhaka leaves much to be desired. The chaos in public sector entity, Bangladesh Road Transport bus operations in Dhaka includes unsafe buses Corporation (BRTC), operates less than 2% of that offer poor quality service, are insensitive to the buses. The overall bus operations are commuters’ needs, and are grossly polluting. regulated by a number of bodies with Most fatal pedestrian accidents in Dhaka are overlapping mandates. The Bangladesh Road caused by buses, one corridor (Uttara-Motijheel- Transport Authority (BRTA) is empowered to 1 VIP) has more than 50% of the total buses in the broken, thus allowing dust and rain to come in. city using just 30% of the total allocated bus Most buses are more than 20 years old, emit routes, and it has been well-documented under black smoke, are badly dented, are vulnerable to the World Bank financed Air Quality accident due to faulty brakes, and lacking signal Management Project (AQMP) that urban diesel lights and rear view mirrors. (According to the buses are the major source of air pollution. In report by Bhuiyan [2], 72% of the buses are less addition, the conflict between buses and other than 6 years old based on survey data; this is modes of motorized and non-motorized transport probably because for imported used buses, age is has contributed to average traffic speeds in the counted from date of registration in Dhaka. range of 10 kph in Dhaka, further aggravating commuters and air pollution. Aspects of poor service quality include overloading of passengers, which contributes A careful analysis [2] of costs for four different both to discomfort and to frequent pick- types of Dhaka buses finds that expected costs pocketing in crowded buses. Lack of adherence for operations, maintenance and depreciation per to time schedules occur both due to traffic jams, kilometer are up to 42% higher than the current and to the practice of frequent stopping in Government fare, even without including illegal unscheduled and unauthorized places to pick up bribes and payments made. However, it is passengers. To compete with other buses for expected that bus owners make up for this by, passengers, there is often reckless driving. Seats inter alia, peak hour overloading, minimal reserved for women are very few, and women maintenance, using buses long after their passengers are reportedly mistreated by the bus recommended lifespan, and adding on staff. Passengers are also pushed out by the staff unauthorized charges based on what commuters while exiting. are willing to pay. Fragmented Industry What are the systemic problems? The industry is fragmented in many ways, which Understanding why these conditions persist works to hinder efficient service. First, there are starts by analyzing the above contextual factors many kinds of buses, including large buses (40+ in more detail, and the de facto rules and seats), mini-buses (about 30 seats), and human regulations that both aggravate and take haulers (modified small trucks that carry advantage of these conditions. passengers). Second, there are varying ownership structures. Until ten years ago, most Standards and quality of service busses were individually owned. The first bus company was registered in 1997, and starting in The standard of bus service is inferior in 2004, the Government decided to encourage physical and service quality. In terms of physical companies with a minimum of 20 buses. There quality, many buses fail to meet safety and are presently more than 60 bus companies, with comfort standards. For example, buses and an ownership ranging from less than 10 buses to estimated 90% of mini-buses are routinely fitted more than 150 buses. The bus companies are with extra seats proscribed by law, leading to organized under umbrella organizations. very little leg space. Seats are also very small and in poor condition, there are no handrails for Third, the fare structure is poorly regulated. passengers who are standing, and windows are Operators reportedly charge higher than the 2 approved fare in many cases in the name of Police reportedly demand bribes in the process special services such as ‘seating service’, ‘gate of checking license and fitness documents, and lock’, and use of compressed natural gas (CNG). to avoid requisition of vehicles for police duty. Conductors also reportedly demand fares for a To cope, bus companies may make routine given distance traveled in an arbitrary fashion; monthly payments to all the police boxes and the resulting heated arguments and haggling are Thana officers along their routes. Yet these common scenes adding to the discomfort of payments don’t reach the street level police, who other passengers. There are also concerns about respond by stopping buses arbitrarily, and the approved fares themselves. On the one hand, thereby adding chaos and unpredictability to commuters feel that approved fares are too high, their corrupt transactions. The RTC collects given the low quality of service, as is the case bribes for route permits, and bargains to raise the for the mini-bus. On the other hand, they prefer bribe price. The BRTA takes bribes for issuing the comparatively better physical and service driving licenses, blue books, registration qualities of CNG run buses, but can’t afford to numbers, and fitness certificates, and speed pay the higher, approved fare. money to provide timely service. A portion of the funds collected goes to senior BRTA Finally, there is no system of franchised routes, management, and political and transport with route permits issued to individual buses. association leaders. This leads to a rag tag collection of vehicles on a given route with little bearing to effective route In addition to these examples where bus owners, management. drivers and staff are the victims of corruption, these actors also engage in proactive corrupt Governance and Institutional Issues practices themselves. Mini-bus staff are given early warnings from BRTA (for a price) about Governance problems include the practice of when mobile courts come into action, and the buses violating traffic rules with impunity such illegal, extra seats are taken out of the bus for as obstructing other vehicles, making the duration. Drivers caught with fake licenses unauthorized stops, haphazard parking in bus don’t go to the trouble of appearing before the stops, and using illegal, hydraulic horns. Many traffic section to pay the fine (200 taka or US$3) drivers are inexperienced, unlicensed, and and regain the license, but rather obtain a new unaware of traffic rules; one traffic sergeant fake license costing 300 taka. Drivers also bribe estimates that only 50% of all buses have all police to operate buses beyond their allotted required documents, 30% have some, and 20% routes, or to turn back in the middle of a route if have none, carrying instead counterfeit ones. they see opportunities to collect more passengers The majority of the CNG run auto-rickshaws, a without going the full distance. large number of minibuses, and more than one half million rickshaws are operating with fake Political organizations also take their cut. licenses. In addition, traffic congestion Owners associations and trade unions collect not discourages owners from introducing new buses only annual membership fees, but also daily fees because of the reduced daily passenger loads at key checkpoints; a portion is allocated to that buses can carry; for example, according to party leaders, and most of the rest to leaders of one owner, buses on one route that made up to 5 the associations and unions, with almost nothing ½ trips per day a few years back, now make on left to serve the rank and file. Important party average less than 3 trips per day. leaders dominate the bus owners associations, 3 and have a key role in route allocations; these to maintain good relations with key persons in are in turn given without consideration to traffic authority, rather than on deep knowledge of the congestion, in order to accommodate powerful transport sector. For example, a Chairman might clients, and to maximize revenue from formal have a powerful position in a transport and informal fees. association, the RTC, and other relevant bodies. Board members may be retired army and police Why have these ailments persisted? officials, or Members of Parliament. To protect their influence in the system, stakeholders The inferior standard of bus service has persisted bargain hard for key regulatory positions, raising because of a range of rent-seeking practices funds through rent-seeking and extortion to affecting all aspects of bus operations and bribe powerful political actors linked to the regulation making new investments unprofitable. transport business, and relevant ministers, to Bus owners must pay extensive formal and work on their behalf. Companies also use media informal fees, bribes, and speed money, to stay exposure to bargain hard: one company in business. The following explains key aspects organized a press conference, among other of why these ailments have persisted. strategies, to press BRTA to issue a route permit. Political Patronage Key ruling party leaders dominate bus owners Co-opting Industry Associations associations. Association leaders are, in turn, Bus owners associations and trade unions tend to members of the RTC, and work as conduits for change leadership automatically with changes in other politicians. The RTC, through its role in regime. These changes are comprehensive, route allocations, is the hub for patronage going from top leaders down to city ward level distribution. Routes are created to accommodate terminal and route committees. The main reason many clients, resulting in too many buses and is that these organizations desire to maintain congestion. Control of buses is invaluable when their power, rents, and control over the need arises to transport supporters to constituencies; thus, leaders voluntarily cede political rallies and demonstrations. Donor power, or switch their loyalty, to the new ruling supported infrastructure, such as bus terminals, party. However, such control by the ruling party is turned over to politically connected operating isn’t absolute: opposition party actors reportedly companies, such as Diva Enterprise, the operator get roughly a quarter of the rents. This system of of the Gabtoli Bus Terminal. Such operators sharing, albeit asymmetrical, helps maintain may not pay appropriate rents to the DCC, and stability, and avoid wildcat strikes and other may provide poor service, but are beyond forms of agitation by bus owners, staff and reproach because of their political connections, commuters. In an environment of rampant rent and the resulting fear of stakeholders to criticize seeking, abuse, and political patronage based them. Control of bus terminals gives operators route allocations, it gives market actors political rent-seeking opportunities, including proceeds access and some degree of predictability in the from illicit trade and shipment of contraband system. goods. Bus companies need to generously compensate a leadership team selected mainly based on ability 4 Colonizing Institutions of Accountability the agencies it supervises accountable. The Strategic Transport Plan for Dhaka of 2005 This system persists because it serves the proposes to address these issues by increasing interest of powerful stakeholders, and because DTCB professionalism and expanding its those that would have the most interest in reform authority. have little influence. Thus, the appointment of the likes of BRTA Chairman and the RTC Allocation of bus routes and permits membership is carefully managed. In addition, the capacity of regulatory institutions is kept There are problems in the allocation of routes weak. Thus, BRTA doesn’t have enough and route permits (the number of buses that can manpower to identify unfit vehicles and to take operate on a given route), which are not based necessary actions; it has no management on proper estimates of demand of commuters, manual, nor does it provide adequate training to nor on the infrastructure needed for effective staff. Coordination within BRTA is weak, with operation, but rather on the narrow business different staff interpreting orders in different interests of bus owners and their political ways. Coordination between BRTA and other supporters. A related issue is the lack of good agencies is also lacking, with police complaining information on the actual numbers of buses in about BRTA non-cooperation regarding the service on a given route. This allows owners to drive against unfit vehicles. Further, to protect succeed in getting approval for additional route rent-seeking opportunities, BRTA allegedly has permits by taking advantage of a rule that new kept five vehicle inspection centers equipped permits can be granted when there is a gap with modern fitness testing technology out of between the maximum number of buses needed operation for the last six years. and the actual number of buses in services. This problem is exacerbated by the practice of bus The DTCB staff has been reduced from 130 to owners exhausting the maximum number of 72, with no posts for road safety, public route permits without having enough buses to transport specialists, and engineers. A few operate in practice. As a result, other bus mobile courts are held per year on an irregular companies without permits have to negotiate basis. Police infrastructure is very poor, and with permit holders to illicitly rent access to many traffic policemen are inappropriately routes. equipped. DTCB has no formal authority to hold Getting a bus route permit: the de facto rules • To operate a bus, the owner needs to get a route permit • To get a route permit he needs to be a member of the owners association, for which there is a fee • The associations are politically affiliated • The RTC has sole authority for granting route permits • RTC is chaired by the Police cCommissioner • The RTC includes representatives of the associations • The association representative acts as the conduit between the route permit applicant and the RTC • Rents are extracted from the applicant depending on the location of routes 5 • Rents are distributed between RTC members and their patrons A Perverse Equilibrium powerful elites use tools of corruption, patron- client dependency, and repression to sustain Dhaka has not seen frequent agitations by the their authority, while ensuring that institutions of bus owners and employees, perhaps due to the accountability are weak and subservient to their perverse consensus of key stakeholders interest. The bus sector is an example of how benefiting from the de facto rules of the game. these tools work in practice. This perverse equilibrium does not enhance the welfare of the citizen, but ensures rents and Addressing these pathologies will require influence for all politicians linked to the sector. actions on many fronts. Over the course of This has serious negative implications in terms decades, Bangladesh may develop institutions of generating incentives for reform among where it is broadly in the interests of politicians political actors, even in a seemingly competitive and other elites to observe laws and political setting. constitutional rules, in the manner one finds in developed countries [5]. However, long before How can these pathologies be the emergence of impersonal institutions and the addressed? rule of law, it is possible for the country’s political leadership to subdue various patronage While the Constitution provides a legal basis for networks and mafias in the interests of better the rule of law, equality, and respect for human services for citizens where it has sufficiently rights , in practice the ruling party and its strong political will (in the CTG’s case, this associates misuse state power and its formal political will derived from its resolve to break up structures for partisan political and personal the major political parties, but such will can also gain. While formal institutional mechanisms for be generated by a strongly articulated demand maintaining checks and balances are in place, in from citizens). Indeed, for a short time during practice these institutions lack autonomy from the previous, military-backed caretaker the executive and are not trusted by the public government ruling from January 2007- December 2008, prominent political actors, [3,4]. These general problems of governance in Bangladesh apply in full measure to the bus mafia bosses, ward commissioners and terminal sector, as can be seen from an analysis of the committee leaders who had engaged in extortion matrix below, depicting key stakeholders and and rent seeking went into hiding (or were their views on reforms. Most stakeholders are in imprisoned), and large-scale mafia-type extortions abated. However, with the release one of two quadrants. Those in the upper right quadrant are those opposed to reforms, with high from detention of prominent political figures influence over the process. Those in the lower prior to the December 2008 elections and the left quadrant are supportive of reform, but have coming to power of a political government, low influence. There are only two supporters in these practices have reappeared. the quadrant with high interest and influence, To address the current situation, steps could be and none in the fourth quadrant. taken to promote the collective action capability Within the upper right quadrant are politicians, of stakeholders in the lower left quadrant in the associations, and regulatory bodies dominated matrix, and to link them up in a pro-reform by key figures from these groups. These coalition with receptive and potentially receptive 6 stakeholders in the upper left quadrant. The these organizations from political parties and to driving force could come from owners of large set standard criteria for eligibility of their bus companies (40+ buses, mostly large and leadership. They could also push for effective CNG equipped), who would welcome the implementation of the recommendations of the increased revenue coming from reforms leading STP. Pro-reform members of associations/trade to less congestion, and would benefit from fair unions may be able to expand their coalition if route allocations, while feeling confident that they see visible reform gains, say from a few they could survive and prosper in a post-reform pilot initiatives, supported by an information- situation. Among other groups in the lower left education-communication drive. They might quadrant, bus workers are expected to endorse also promote new associations like the reforms, particularly those from large Association of Bus Companies (ABC), which companies. Both reform-oriented owners and aim to represent non-mobilized constituencies in workers may in turn urge their associations/trade the transport sector such as bus riders; this unions to promote integrity, non-partisanship in might, in turn, generate pressure on the association activities, and more transparency in traditional associations to change their anti- their functions and accountability to general reform stance. members. They could lobby for laws to de-link Reform: Influence-Interest Matrix Politicians High Influence of Stakeholders Bus Owners Association DMP DCC BRTC World Bank BRTA Rickshaw Media Human Haulers RTC 3-wheelers DTCB High Interest Civil Society Low Interest in in Reform Bus Staff Union Reform Large Bus Companies Progressive Bus Companies Bus Commuters Low Influence of Stakeholders Civil society organizations linked to urban (e.g. transparency in bidding, determination of environmental issues could also be encouraged bus fare, and actual quality of services on offer). to play a greater role in voicing citizens’ They could also monitor the economic concerns related to traffic congestion. They rehabilitation of stakeholders who might suffer could critically observe the process of reform from reforms, such as rickshaw and human 7 hauler pullers, and staff of small bus companies, Operations, report for the South Asia Social, to keep these stakeholders supportive or at least Environment, and Water Resources Department, neutral towards reforms by countering inevitable The World Bank, 2008. false rumors with credible information. Likewise, investigative reporters in media 2. Bhuiyan, Abdul Alam, Study on Bus organizations can be urged to master basic Operation in Dhaka City, 2007. Air Quality technical knowledge of transport issues so they Management Project, Department of can keep citizens better informed on transport Environment, Dhaka, Bangladesh. governance constraints discussed above and 3. Lokniti (Programme for Comparative related reforms. Both civil society and media Democracy, Centre for the Study of Developing organizations could benefit from technical and Countries). 2008. State of Democracy in South financial support from international partners Asia. New Delhi: Oxford University Press. such as the Bank to support these efforts. 4. Barman, Dalem Ch., M. Golam Rahman, and One should not underestimate the difficulty of Tasneem Siddiqui 2002. State of Democracy in getting effective reform underway. Large bus Bangladesh. Stockholm and Dhaka: owners and staff will be highly constrained in International Institute for Democracy and supporting reform by their current links to Electoral Assistance and University of Dhaka, corruption networks of politicians, police, and Department of Peace and Conflict Studies. leaders of associations, RTC, BRTA, DCC and BRTC. Powerful elites that feel threatened could 5. Douglass C. North, John Joseph Wallis, fight back by orchestrating street battles, terror Steven B. Webb, and Barry R. Weingast, 2007. attacks, and extrajudicial killings. The Bank and Limited Access Orders in the Developing other partners can support reform efforts, but World: A New Approach to the Problems of they will only succeed with sustained, Development Policy Research Working Paper determined and courageous leadership backed 4359. Washington, DC: World Bank. by a cohesive, Bangladeshi political force [6]. 6. Wil Hout, and Richard Robison, eds. References 2009. Governance and the depoliticisation of development. London: Routledge. 1. Political Economy Analyses of Two Key Industry Sectors in Dhaka, Part A: Urban Bus This Issues Note is based on a study conducted for the World Bank by Mirza Hassan and Abul Hossain (Consultants, SASGP) in 2007-2008 under the guidance of Jose Edgardo Campos (Lead Governance Advisor, . SASGP) and Sameer Akbar (Task Team Leader & Sr. Environmental Specialist, SASDI) from the World Bank. It was prepared by Clay Wescott (Consultant, SASGP) in July 2009 as part of the South Asia Governance and Public Sector (SASGP) series on Political Economy and Governance. Comments on earlier versions of this Note were received from Ajay Kumar (Lead Transport Economist, AFTTR), Hubert Nove-Josserand (Sr. Urban Transport Specialist,SASDT), Sakuntala Akmeemana (Sr. Public Sector Specialist, SASGP) and Dr. M. Khaliquzzaman (Consultant, SASDI). The study was financed using DFID Trust Fund resources. Any comments and questions about the study should be directed to Sameer Akbar at sakbar@worldbank.org 8