ASSESSING THE PARADIGM SHIFT IN SRI

LANKA’S 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)