ARTICLES-May 2008 |
ARTICLES-May 2008 |
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Passenger transport in big cities- Not enough competition for
smooth mobility
About tender
tendering
Desperate
measures! |
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Passenger transport in big cities — Not enough competition for smooth mobility Published: The Hindu Business Line, May 19, 2008 By Siddhartha Mitra Unless the government ensures that
public transportation becomes a viable alternative With a car for every 15 people India’s ten or so “four-million plus” cities seem to have less of a congestion problem than their counterparts in the US, with a car for every two people. If statistics can lie, these certainly do — the much higher population density in India’s large cities implies that people and their cars are confined to much smaller spaces; two-wheelers and three-wheelers also contribute largely to congestion, outnumbering cars three to one. Rapid economic growth implies that each city’s car fleet doubles every five years or so; at the same time, entrants to the middle-class can be expected to use their new found purchasing power to shift from the dysfunctional public transport system to two-wheelers. Already, in cities such as Bangalore and Mumbai, traffic moves at less than jogging pace. The future seems to hold much greater problems; the very economic growth that put so many wheels in motion might be paralysed as these wheels grind to a near halt. Let us look at the genesis of the problem. Economic liberalisation and the rapid growth it generated led to many automobile producers entering the market — the variety and number of cars increased but these competed for almost the same road space as before. Poor public transport At the same time, our public transport system — buses, trams, local trains, etc — did not evolve to meet the rising aspirations of the people and, in many cases, deteriorated beyond measure in terms of comfort and punctuality as they were either run by leaky government transport companies or were operated on the basis of competitive principles that lacked sustainability. The upshot of all this was that as soon as people had the capacity to pay for or borrow for private vehicles, they made use of it. Moreover, once these vehicles were bought, they became the sole means of mobility, unlike European and even some American cities, where own-vehicle use is limited almost completely to moving outside the city as public transport provides more efficient and cheaper inner-city mobility. The problem in the Indian case is two-fold — unfettered competition among automobile producers in providing transport services to the population and no effective competition between private and public transport. These twin problems, by leading to crowded streets, social tensions, road rage and delays at work, get translated into GDP losses, high levels of pollution, higher incidence of respiratory diseases and loss in productivity of the workforce. There is much to gain in terms of welfare if these twin problems can be resolved, including saving on crude oil imports, which get costlier by the month. Recent regulation of the transport sector in various countries falls in two categories — direct and indirect. Direct measures try to limit the number or types of automobiles owned. For example, in Singapore, a limit is placed on the number of new cars allowed to register in a year. While these measures are ideal for prevention of congestion within a city, they leave people without options when it comes to travelling outside the city. Indirect measures, on the other hand, are more discerning in their impact. These relate to the use of low speed limits, congestion charges and high parking fees within city limits. Indirect measures Such measures, popular all over the EU, curb pollution and reduce delays resulting from congestion. People are encouraged to use public transport within the city. In India, we have started experimenting with light indirect measures, such as nominal parking fees in most big cities. However, in most cases, parking fees, which range between Rs 5 and Rs 20 an hour, are too low to deter travel by car. A case can be made for hiking these parking charges and introducing congestion charges in inner city areas. However, any disincentives to use private transport have to be accompanied by improvements in public transport, which make the latter a viable alternative to the former. At present, urban bus transport systems are a mess and intra-city train facilities exist only in four Indian cities — New Delhi, Kolkata, Chennai and Mumbai. Privatisation of bus systems is a must for plugging the leakages that characterise urban bus transport. However, Delhi’s sorry experience with Blue Line buses implies that unsavoury competition among private bus operators has to be kept on a leash – regulated tariffs to ensure affordability and area-wise bidding for licences to operate bus services, accompanied by periodic assessment of performance constitute essential ingredients of a sound public transport policy. Unless the government ensures that public transportation emerges as a viable alternative to private transport, a descent into a quagmire of chaos, congestion and stagnation is imminent. The time has come to act, and swiftly. Mr Mehta is Secretary General, CUTS International, and Mr Singh is Fellow, CUTS Centre for Competition, Investment and Economic Regulation and can be reached at psm@cuts.org (The author is Director (Research), CUTS International, a research, advocacy and networking group and can be reached at sm2@cuts.org) This article can also be viewed at URL: Published: Financial Express, May 08, 2008 By VV Singh and Pradeep S Mehta The healthcare system in India is very complex and there is a clear rural-urban divide. In urban areas there is a wide variety of healthcare services including high-tech hospitals and diagnostic centres while in remote villages people have to depend on faith healers, quacks, and barefoot doctors (village health guides) for healthcare. The irony is that medical tourism in India is getting popular with patients from other countries, but our own citizens do not have proper access to basic healthcare services. On the other hand government is finding it difficult to meet the costs of ever increasing public expectations for health services. Individuals have to spend a large amount of money on healthcare in case of any disease. People suffering from chronic disease are driven into penury due to the heavy cost burden of ongoing healthcare. At the same time, large sums of money are being wasted on government dispensaries and hospitals which do not function efficiently. Thus there are socio-economic inequalities in access and utilisation of health services and also in outcomes. What are the reasons for this fiasco? The reasons are complex, but one important reason is that government has not been able to provide health care services to the poor directly. The absence of proper targeting of the beneficiaries dilutes the impact of public expenditure on health services. In addition to this, the poor do not get the benefit due to leakages. The government provides supply side subsidies that cover some or all costs of inputs for health services, but it provides little incentive to attract patients or improve productivity as limited resources get thinly distributed. As a result, public service providers get insufficient funds to function. This leads to poor quality healthcare and under utilisation of public health services. With the depleting quality of healthcare in public sector, the demand for private healthcare delivery is rising and it is resulting in an overall increase in prices of health care services in the country. On the other hand the public services are under-utilised. What can be done? A country like India, where the incidence of poverty is very high, has to have extensive health safety nets. It is inevitable that the implementation of various health safety schemes or any other social safety scheme will not achieve perfect targeting. Here, the issue for debate is; what should be the most efficient method through which public money reaches the targeted beneficiaries, the poor. Provision of healthcare vouchers to the targeted beneficiaries can be an efficient channel, as it provides universal coverage, efficiency and free choice to the consumer. The basic idea behind healthcare vouchers is of subsidising demand among the targeted beneficiaries for cost effective health services and allowing a competitive market for its provision. This will be more beneficial than using those same resources to subsidise supply as vouchers provide a direct link between the intended beneficiaries, subsidy, and the desired output, such as access or utilisation. The aim is to empower the poor to choose the health service provider of their choice and allow them access to private health services. One of the potential advantages of vouchers will be that they would facilitate reforms in pursuing the health problem or investment that would be otherwise difficult to achieve. In a country like ours, where awareness of health services is poorly disseminated, vouchers can also encourage people to visit service providers they might not otherwise have visited. They can prove very useful for subsidising services which are under consumed from the social welfare point of view, such as family planning, immunisation, mother and child healthcare, and treatment of infectious diseases. Moreover, the use of vouchers will enhance competition between the service providers, as the bearer of the voucher will choose the service provider. The freedom of consumer choice will also force the service providers to improve the quality as even if all the providers charge the same price the bearer will choose the provider who offers most convenient and highest quality service. The providers will be bound to improve their quality in order to attract voucher-bearing users. Thus the voucher scheme can facilitate quality services for the poor and underprivileged sections. Voucher schemes have been used all over the world to distribute public resources in different sectors but experience in the health sector is very limited. Some examples of healthcare voucher schemes can be found in low-income countries such as Indonesia, Zambia, Kenya and Nicaragua, where they were used in various forms for diverse objectives. Experience from various countries shows that setting up of the scheme might have some complexities, but once the schemes function, they are easier to run. We need to change our mindset towards health vouchers. To begin with we can test the true potential of healthcare vouchers through small scale trials and research projects. However, in order to get subsidies to truly needy people for the provision of cost effective and quality health services, vouchers seem to be a highly effective way. (The authors are associated with CUTS International, Jaipur and can be reached at vvs@cuts.org and psm@cuts.org) This article can also be viewed at URL: |
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