Investing in Public Transport

Originally appeared on The Morning

By Dhananath Fernando

As a schoolboy, one promise that I remember being consistently made in Budget speeches was the development of the Marine Drive up to Moratuwa. But now, even in 2023, it has only been developed up to Dehiwala.

When the project was announced, I remember Sri Lankans celebrating. When the project was cancelled, we still celebrated. After leaving school, I often took the train to work, so I practically grew up with the Sri Lankan railway system and the Marine Drive. While the Marine Drive has progressed at a snail’s pace, the Sri Lankan Railway remains almost the same.

Later, when the Light Rail Transit (LRT) project was approved, there was renewed hope and celebrations. Consultants were hired and feasibility studies were done. TV commercials were aired on the impact it could create. However, following some back and forth, a new set of consultants were paid, who then cancelled the project. Again, we celebrated the cancellation, and now once again, we are in discussions to resume the project.

One does not need to be an economist to understand the importance of developing a solid public transport system which helps to improve efficiency, minimise pollution levels, and increase convenience for commuters.

As an initial incentive to get more commuters to consider using buses, the Government attempted to implement bus lanes. The provision of a dedicated lane for vehicles shuttling a large number of passengers would have reduced commute time and congestion, and also incentivised commuters to switch from private vehicles to public transport. Unfortunately, the actual adherence to bus lanes was short-lived; if you look at buses today, they move all over the lanes.

Further, there is a route permit system which effectively blocks the entrance of new players. This has created an oligopolistic market system, with a higher chance for cartelisation of the market. Additionally, the Government has imposed a price ceiling which stunts the space for innovation and value-added services.

For example, the 138 Kottawa-Pettah route – considered to be a route utilised by a significant proportion of the middle class – has no air-conditioned bus service. The lack of an efficient market system has led the players to not even be incentivised enough to employ air-conditioned buses.

The market system works when there are no entry and exit barriers and when room is created for innovation through the pricing mechanism to reflect the scarcity value of the product or service. In the current system, nothing is possible. And yet, modifying the public transport system is not a difficult task and will provide significant relief for the people.

One main problem in Sri Lanka for any type of investment is the ownership of land. Unfortunately, this is not an easy puzzle to resolve. There is no digitised land registry and more than 80% of land (including the forest cover) is owned by the Government – this land can be efficiently used for urban development.

Efficient public transportation with greater accessibility and affordability will create urban living hubs around it. One way to solve this puzzle is to start the digitisation of registration of lands in commercial areas within Colombo and Gampaha. Often, these projects tend to progress at a sluggish pace, falling significantly short of the required speed. The delays have not only driven up the cost but have also resulted in a loss of credibility.

Unfortunately, politicians often prioritise projects with short-term timelines, typically ranging from three to five years, as they require something tangible to showcase before the next election. Therefore, with the current governance structures, even these projects that are scheduled to take place would simply be an attempt to build political capital, instead of improving public transport in order to generate value for the people of Sri Lanka.