Comments on Government Comments on Planning Information Stage Bus

Malacca government to offer mileage subsidy

TRANSIT takes note of this article in the Metro Star today in which Malacca Chief Minister Ali Rustam announces new initiatives to improve public transport service.

Saturday June 27, 2009
Bus companies may claim mileage subsidy

MALACCA: The state government is mulling over several proposals to improve the public transportation system which will include providing mileage claims for bus companies here beginning next year.

Chief Minister Datuk Seri Mohd Ali Rustam said the move would ensure the estimated 250 buses cover all city and rural routes in the state irrespective of whether there are passengers to ferry or not.

“Whether there are passengers or not, the buses under the companies will still ply the scheduled routes and later claim mileage subsidy from the state,” he said during the Malacca Bus Operators Associations 50th anniversary celebrations here on Sunday night.

He said the system was currently being used in Melbourne, Australia where private bus companies claimed mileage subsidy from the authorities.

Based on initial projections, he said that the state would have to bear between RM3mil and RM4mil annually for the mileage allowance system to be successful.

He said a test run on the subsidy system would begin in two weeks to determine its feasibility for implementation next year.

He said the other proposal being weighed involved the state renting the 250 buses from the companies here and managing the public transportation service.

“Under this system, we will rent the buses for about RM10,000 for each vehicle per month.

“The state will then manage the bus service and pay for its fuel with the companies merely providing manpower and maintenance for the vehicles,” he added.

However, he said the proposal would incur a cost of some RM10.5mil annually and this may be a financial burden for the state.


It is good to hear that the state government is actually moving public transport forward just a little bit. We at TRANSIT admit that we are concerned that the Aerorail proposal would be a one off project that is totally isolated from the rest of the public transport system.

We are still concerned but this article shows that the state government is looking at the bus system.

So there is a way for us to get their attention and convince them that there is a process that works.

Regarding the proposed mileage subsidy, TRANSIT believes that this is a good start – but there has to a commitment to service and quality built into the contract. The drivers are not just there to drive – they are there to drive safely, provide information, show up at stops according to a schedule, and keep their passengers safe – among other things.

We believe that a solution must focus on all of these aspects of public transport – not just the money – which is why the State Government must look at a holistic revamp, not just a piece by piece change.

Hence, we do not fully agree with the idea of the State government to hire the bus companies for a proposed fee of RM10000 per bus because apparently the State Government will take responsibility for the management of the bus companies and pay for fuel as well!

TRANSIT would like to inform the Chief Minister that this is not the way a system of public management and private operation ought to work.

For one thing, the government should be responsible for the capital costs of the system. In a state like Malacca, that means the buses and the hubs and depots. The operators should be responsible for operations, and the farebox collection should pay for the operations costs and hopefully the capital costs. If there is not enough money collected from the farebox, then the government should step in with funding.

The system that the CM proposes is the other way around – the government will end up paying for the cost of bus operations (fuel and labour) and will also be paying the capital costs (through the rental fee) for old, poorly maintained buses that may not meet the needs of a mixed urban-rural public transport service.

TRANSIT proposes that the CM look at our 4-Stakeholders model, in which a Local Public Transport Authority plans routes and offers these routes to competing bus operators on a tendered, time-limited contract. The system works this way:

  • The Local Authority (one stakeholder) works with the government to pay for the capital costs (buses, hubs, depots, bus lanes)
  • The operators (the second stakeholder group) provide the operations (paying for fuel, labour) and they are paid by the Local Authority.
  • The residents and passengers (the 3rd stakeholder group) monitor the bus service and give feedback to the operators and the Local Authority
  • The wakil rakyat (the last stakeholder group) will be responsible for monitoring (in the legislative assembly and subcommittee) the service provided – and making decisions about the contract.

This system would provide a fair balance of assets and liabilities, benefits and costs to the government and the private sector.

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