ASSESSING THE PARADIGM SHIFT IN SRI LANKA’S THE PARADIGM SHIFT IN SRI LANKA’S DEVELOPMENT OF THE TRANSPORT SECTOR ... in key planning and operational positions

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  • ASSESSING THE PARADIGM SHIFT IN SRI

    LANKAS DEVELOPMENT OF THE

    TRANSPORT SECTOR

    AMAL S. KUMARAGE

    UNIVERSITY OF MORATUWAUNIVERSITY OF MORATUWA

    KUMARAGE@SLTNET.LKAMALK@UOM.LK

    30th January 2014

    Public Lecture Central Bank of Sri Lanka Colombo

  • Some definitions

    Emphasis: Paradigm Shift

    Scope: Mostly on land transport

    Approach: investigate each of the major elements

    of policy intervention

  • 1. Identifying the Changing Demand 1. Identifying the Changing Demand 1. Identifying the Changing Demand 1. Identifying the Changing Demand

    Function for Transport Function for Transport Function for Transport Function for Transport

    Transport functions change with time.

    Changes in political ideology, trade opportunities, technology

    and socio-economic conditions lead to change.

    Period Demand Function Supply Function

    Pre- Colonial Self Sustaining

    Communities

    Internal trade less and infrastructure mostly provided by the

    respective communities. International trade routes were supported Communities respective communities. International trade routes were supported

    by the Kings- ports, roads.

    Dutch Development of Export

    trade

    Development of Canal Systems in WP, emergence of Colombo as

    primary international trade node for spices and coconut. Other parts

    of country largely ignored.

    British Development of

    plantation economy

    Development of tea and rubber exports supported by the rail and

    road radiating from Colombo. Neglect of rural access.

    Post-

    Independence

    Development of rural

    economy

    Rapid expansion of rural road and bus transport network. Neglect of

    urban and inter-urban transport.

    Post-

    Agricultural

    Emergence of urban

    economy

    Rapid expansion of inter-urban and urban transport infrastructure

    and services.

    Modern Emergence of leisure

    lifestyle

    Change of travel patterns, destinations, modes

  • 2. Determining the Correct Role of 2. Determining the Correct Role of 2. Determining the Correct Role of 2. Determining the Correct Role of

    Government in Transport Government in Transport Government in Transport Government in Transport

    Reformer

    Regulator

    Reformer

    Self-RegulatoryRegulator

    Provider

    Self-Regulatory

    Private Provider

  • Price

    SConsumer

    Surplus

    3. Ensuring Transport Development 3. Ensuring Transport Development 3. Ensuring Transport Development 3. Ensuring Transport Development

    leads to Economic Growthleads to Economic Growthleads to Economic Growthleads to Economic Growth

    Quantity

    Po

    Qo

    Producer Surplus

    D

  • Price

    SConsumer

    Surplus S

    Quantity

    Po

    Qo

    Producer Surplus

    D

    P1

    Q1

  • Price

    SConsumer

    Surplus S

    Quantity

    Po

    Qo

    Producer Surplus

    D

    P1

    Q1

  • Price

    SConsumer

    Surplus S

    Quantity

    Po

    Qo

    Producer Surplus

    D

    P1

    Q1

    S

  • Ancient Lanka

    Cities located sufficiently inland to

    protect against invaders Polonnaruwa

    Urban road networks feed the cities

    Road and River Networks connect

    cities to seaports

  • E.g. Anuradhapura and Polonnaruwa

    Multiple roads centered

    on Capital cities

    Source: P Vidanapathirana, Ancient TransportSystems, PhD Thesis, University of Kelaniya, 2012

    Connecting multiple ports to

    multiple trade destinations

    Multi-modal transport system

  • P Vidanapathirana, Ancient Transport Systems,PhD Thesis, University of Kelaniya, 2012

  • Colonial Ceylon

    Canal, Railway and Road network

    Centered on international

    connectivity

    Strong Inter urban linkages

    Well developed multi modal systems

    Modern technology

    Transport in urban and suburban areas

    well developed.

    Neglect of areas which did not

    contribute to export trade

  • Post-Independent Sri Lanka

    Emphasis on Rural Access

    Develops bus transport as low

    cost, highly accessible mode

    Neglects railways, urban and inter-

    Source :Road Development Authority

    Neglects railways, urban and inter-

    urban roads

    Control of private vehicles

    Current Paradigm

    Encouraging private/ para

    transport solutions

    Single mode future

    Developing alternate nodes

    Improving rural and inter-urban

    mobility

  • Required Outcomes

    Linking producers and consumers

    Via suitable market nodes

    Via suitable transport nodes

    Efficient transfers (terminals and logistics centres)

    Choice and flexibility (multi modal)

  • 4. Ensuring Transport Development leads to

    Balanced & Sustainable Development (BSD)

    Efficiency in

    Mobility

    Environmental

    Sustainability

    LIVE

    AB

    ILITYEconomic

    Growth

    Access to New

    Economic

    Opportunities

    Equitable Access

    to Social

    Development

    Sustainable

    Economic

    Growth

    Sustainable

    Social

    Development

    LIVE

    AB

    ILITY

  • 5. Identifying the Required Supply Function for

    Transport

    The supply of transport requires the following:

    Infrastructure Facilities

    Rolling Stock Services

    Delivery Processes (policies+ regulations + institutions +

    procedures + people)

    Pre- Colonial ColonialPost

    IndependenceModern

    Infrastructure State State State State+ Private

    Rolling Stock Private

    State (Railway)

    Private (Buses,

    Trucks, Cars)

    State (Railway, Bus)

    Private (Cars, Trucks)State Private

    Processes State State State State+ Private

    procedures + people)

  • Technology Options for Transport Supply

  • 500

    600

    700

    800

    900

    1000

    Ow

    ne

    rsh

    ip R

    ate

    (p

    er

    10

    00

    pe

    rso

    n)

    Vehicle Ownership Rate Vs Per Capita Income at Different Levels of

    Intervention

    Low

    Moderate

    High

    Belgium, Denmark, Finland, France,

    Germany, Sweden, Switzerland,

    Japan, Seoul

    USA, Australia, Canada

    0

    100

    200

    300

    400

    0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000

    Ve

    hic

    le O

    wn

    ers

    hip

    Ra

    te (

    pe

    r 1

    00

    0 p

    ers

    on

    )

    Per Capita Income 1995 PPP(USD)

    Japan, Seoul

    Singapore, Hong Kong

  • Demand for Travel by Mode (1958-2030)Passenger Kms carried by modes- Sri Lanka

  • DEMAND FOR TRAVEL BY MODE (1958-2030)Passenger Kms carried by modes- Sri Lanka

  • 6. The Supply Function: Public Investment in

    Transport

    140,000

    160,000

    180,000

    200,000

    -

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    2008 2009 2010 2011 2012 2013 2014

    Ports and Aviation

    Highways

    Public Transport

    1.9%2.6%

  • Current Trend

    Vehicle taxes source road building (with a surplus)

    Public Transport seen as burden to treasury

    Future Path

    Translate financial profit to Treasury to economic gains to

    economy

    Cross subsidy between private and public transport

    Heavy investment in bus transport infrastructure

    New modes of urban public transport (BRT, Monorail)

  • 7. Directing Private Investment in Transport

    Private Investment in Vehicles- Rs 400 bn+ p.a. (approximately 60%

    in taxes).

    Industry Profile

    Most sub sectors have an over supply and utilization is poor Most sub sectors have an over supply and utilization is poor

    Mostly informal operations, inefficient with limited service parameters.

    Formal operators marginally improved and serves small market segments

    Service Delivery by Private Operators

    Public Transport (low fares, poor service, moderate infrastructure, but

    profitable-except when govt operates)

    Para Transit (rapid growth, high fares, moderate service quality)

    Trucking Services (high rates, moderate service, poor technology)

  • 8. Improving Delivery Processes in Transport

    Sector

    Why is there delivery failure?

    The inevitable steps to proper delivery

    The correct policy The correct policy

    The correct plan

    The correct infrastructure and rolling stock

    The correct procedures

    The correct people

  • Conclusion

    Focus on rapid improvement of urban transport

    Focus on reforms to sector as opposed to continuing operations

    Integrate transport with economic growth and equitable social development

    Verify long term sustainability in transport policy & selection of transport modes Verify long term sustainability in transport policy & selection of transport modes

    Move on from thinking vehicles for roads which gives short term financial gains

    Improve service delivery by private sector. Capacity expansion not most urgent.

    Restore/Set up correct processes and people with correct skills and competencies

    in key planning and operational positions (both state and private sector)