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| Sunday, 19 September 2004 |
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Business |  |
| News Business Features Editorial
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Reorganisation of cluster bus companies desirable The State- owned cluster bus companies should be re- arranged as a single management unit or revert back to the CTB to make them profitable or at least to move away from obtaining Treasury subsidies. Advisor to the Railway Department and the new nominee to the post of Chairman of the Transport Board Dr. L.Gunaruwan made these comments to the Sunday Observer Business. The idea of managing the State bus companies as a single unit is not new. It was proposed over several years by specialists in the field. In 1997 the regional bus companies ran at a loss of Rs.1.60 per running Km. But after the establishment of cluster bus companies and combining them the situation changed and during the period of 1998-2000 it earned a surplus of Rs.1.40 per running Km. In addition, government should provide financial support for two to three years to finance the losses incurred, purchase of spare parts and increases in the fleet. If managed well within this period the CTB, SLTB or whatever the name public bus transportation system of the country can stand on its own and will not be a burden to the Treasury. However to mainitain the profitability of the venture, it should be permitted to increase the fare to match increasing costs. In the event of the government not permitting increases the fares they should provide the additional cost as a subsidy. An important step has been taken by appointing Director boards. But political influences and some trade unions have not allowed the new directors to take over the management. This is the reality; this sector has been under political influence for decades and therefore it is difficult to change the scenario at once. Therefore some flexibility is needed and negotiations with trade unions are a 'must' to reach a settlement. The present situation will only create anarchy in the sector which has resulted in commuters suffering. Expressing his views on the Ceylon Government Railway (CGR) Dr. Gunaruwan said that the CGR enjoyed a golden era 34 years ago, called the "Rampal" era. It was a time when the people used to set their watches with the arrival and departure time of a train. Today, the service have deteriorated due to several factors. But the general argument that the railway is running at a loss is not true. If you consider financial cost and benifits the argument is true, but we can't think on those terms about a public transport service as we have to consider the economic cost and benifits. The health and education sectors are also not profit earning departments and compared with those departments the CGR is not running at a loss but earning profits! For example, the country loses Rs.25 billion per year due to traffic snarls but Samudradevi alone carries 3800 pasengers per day while at least 60 buses are needed to carry the same amount of passengers. If these people travel by bus what would happen to the traffic snarls on Colombo roads. The operational costs of the railway department is very high. There are 145 locomotives and 900-1000 carriages. The total depreciation cost of the locomotives is Rs.900 million per year and the total length of the railways is nearly 1000 km. Railway sleepers have to be replaced at least once in every five years while rail lines have to replaced every 20 years but on the coastal line it has to be done every ten years. Annualy Rs 1000m is needed to maintain the railways. During the past two-and-a half years, government has not given a cent for teh maintenance of railway lines resulting in the deterioration of the railways. Speed has been limited on nearly 500 km of the railway lines which are not in a usable condition. This is the main reason for the increasing accidents. Spare parts have not been ordered and locomotives and carriages are in a dilapilated condition. Government should immediately address these issues to protect the commuters and the limited assets of the CGR such as locomotives and carriages by preventing accidents, Dr Gunaruwan said. "All passenger transport trains are running at a loss. The approved rail fare per km is 35 cents. Season ticket holders pay only 10 cents while government servants who are season ticket holders pay only 1 cent! Bus fare is 55 cents. To run a km a train consumes three litres of diesel which amounts to Rs 105. At least 300 passengers have to be carried to cover this fuel cost. But most trains are running without considering these factors and it is a service today. Some trains, specially night services carry less than ten pasengers. So how will the the railway earn profits," he asked. "Privatisation will not be the solution to overcome these problems. Let the railway department staff do the job. They will do it. The rail fares should be revised to match the cost. The decision to permit the increase the price or subsidising the difference should be decided by the government." "A ten year railway priority policy should be implemented and government should use railways for its transport needs and encourage the private sector and other parties to use the railway. Petroleum transportation was increased from 30% to 50% recently. It is profitable to both the Ceylon Petroleum Corporation as well as the Railway Department and it also helps reduce the traffic snarls on the roads. Profitable railway lines should be developed. If we can develop the railway service by this methods it will create huge economic benefits to the country," Dr Gunaruwan said. Dr Gunaruwan is a Transport Economist and a senior lecturer of the University of Colombo. He is also a member of the NCED. |
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