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| Sunday, 14 November 2004 |
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Business |  |
| News Business Features Editorial
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The Transport mess -a way out by Lloyd F Yapa Any country worth its salt should have an efficient public transport system. Its main functions are to carry its citizens to and from places of work and to distribute the economy's outputs from suppliers to consumers with the least cost and in the shortest possible time. No one will deny, that the public transport system in this country has failed miserably to measure up in this respect. The extent to which it may be eating into GDP by lowered productivity and loss of life, limb and property may not be known. But it must be enormous. It would be useful to discuss some of the causal factors of this outrageous haemorrhage. Diffused ownership The first problem is that ownership appears to be diffused. The railways, trains and some of the buses in this country are supposed to be owned by the State. But the commuters and the general public notice several owners. The local governments vie with several central government agencies for the control of the asset. The trade unions make it appear, that it is they who own it. Behind all these 'owners' are the ghostly hands of vile politicians of different hues, who appear to pull the strings. So for all intents and purposes it is free for all. Nobody appears to be in charge. Contradictory objectives The purported objective of these 'State Owned' enterprises is to satisfy the traveling and transporting needs of its customers. The tariffs are kept low for this purpose. But the public know better. The needs of the customers to travel in comfort and safety, the need of suppliers to transport inputs and outputs at speed and at the least cost as well as the need for these enterprises to earn a return to cover the costs and a margin of profit either to be retained for further investment or be appropriated by the real owners, the State, appears to be secondary or tertiary or are even relegated to a position further down the list, as proven by the use of these enterprises as bureaus of employment for the henchmen of you know whom, the militancy with which any reform is greeted by the workers and the frenzy, with which the collections (from buses and trains) and whatever perks are set upon by some of the 'owners'. In the meantime, the real owners, the General Treasury, representing the tax payer, has been patiently dishing out the gravy ! Powerless managers The responsibility of managing the railways is delegated to a Department by the real owners. A part of the State bus fleet is managed by a Board. The other part is managed by a number of 'cluster' bus companies. A characteristic of good management is the ability to take decisions regarding, what needs to be done to achieve organizational objectives without fear or favour. These so called managers, are jostled by so many forces - the central and local government regulations, the militant trade unions, the inept politicians and so on, that they appear to take no decisions at all. So this is how the 'State Owned' transport services are run in this country and some 'experts' still ask, "if the government of Singapore could run its national airline efficiently, why can't we ?" The short and simple answer is the leaders of Singapore had the commitment and foresight to create an appropriate culture and also enhance the efficiency of their public service as a prerequisite for development, while we in this country wasted more than fifty years indulging in internecine conflicts and blaming outsiders for our problems without getting any system to work. Private bus services no better Then there is the fleet of buses owned by hundreds of small and medium scale entrepreneurs. Their service is no better than that of the 'State Owned' fleets and their conduct gives private enterprise a bad name. It is true, they have their own problems, such as the difficulty of satisfying several masters at the same time and the low profitability. The latter apparently stems from the low scale of operations- each owner trying to run a couple of buses. They have to combine to form one corporate body eg a company to be able to enjoy economies of scale eg to reduce costs and afford the necessary specialized equipment and professional expertise to enhance the quality of service. (At present they seem to get together only to flex their muscles very much like other trade unions). But the authorities may frown on the formation of a single company or monopoly, which power might be used to dictate terms and act against the best interests of the consumer. The alternative therefore is to form a couple of companies, so that the ensuing competition could help to reduce fares and improve the quality of service. Clearing the mess We have to take stock now and take several sequential steps to clear the mess: a) improve the efficiency of the public service ; the first requirement for the purpose is to make it difficult for politicians to de-motivate officials by interfering in recruitment, promotion and transfers, even if we have to change the constitution for it, b) make it possible for one single agency and not several to regulate affairs pertaining to transport, c) enter into an agreement with the trade unions along with private business as to how these businesses are to be run to satisfy the ultimate consumers, while protecting the rights and privileges of all stakeholders, d) restructure the 'State Owned' transport enterprises into a couple of entities only, to make realization of economies of scale possible and improve management, while ensuring healthy competition ; also give them the necessary powers to take decisions independently, to run the enterprises as viable entities, while making them accountable ; if the tariffs are to be kept low give them as well as the private bus companies an adequate subsidy to cover up losses and e) be pragmatic and privatize, where necessary, since the government does not have sufficient funds for investment to modernize the infrastructure and equipment. Maintain roads and railways Finally the government has to ensure the agencies concerned regularly maintain the roads and railways ( including the side drains) in good condition and keep them free of obstructions like encroachments, for traffic to flow freely and smoothly-while a world class infrastructure is slowly but steadily put in place. |
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