Alternative 2010 Budget displayed

Prime Minister Najib will table the 2010 Budget in the Dewan Rakyat on Friday, 23 October.

The Opposition DAP has continued with their tradition of an Alternative Budget which they revealed today, 7 October.

The Alternative 2010 Budget is available in .pdf form at this link.

Public Transport related features of the Alternative Budget are reproduced below:

Pg. 14, Section 5 – Key Policy Highlights

4. Authority over the design and administration of public transport networks will be devolved to states. Every city will have a Transport Authority [TRANSIT: Wise idea] under the oversight of the local city council; for smaller towns and suburbs, they would be grouped together under the control of the State-wide Transport Authority. In the Klang Valley, which is too interconnected for public transport management to be left to a single state or local council, the DAP proposes to create the Klang Valley Transport Authority (KVTA)

5. Under this system of devolved transport expenditure RM 13 billion is budgeted for public transport in 2010, and will be distributed to the individual states based on population and vehicle density. Limited competition and Gross-cost route contracts will also be implemented to allow the transport authority to prioritise stability and connectivity while seeking cost efficiency. Under this system, the network and design is determined by the transport authority, while the operator selected via a open and competitive tender.

Page 26-31 Section 8.4 Public Transport

8.4.1 Current situation: Problems and Efforts

a Rising use of private vehicles

Urban congestion is now a major problem in Peninsula Malaysia. This has largely been caused by private car ownership increasing faster than the expansion of urban road networks over the last few decades. Malaysia has the 4th highest car ownership ratio in Asia Pacific after only New Zealand, South Korea and Australia. In 2006, 67% of persons aged above 18 years in Malaysia own a car. This is more than twice the rate of car ownership in Thailand, 3 times the rate in Singapore, and 5 times the rate in Philippines. (27)

This problem has been particularly pronounced in Klang Valley, where car ownership per 1000 persons increased from 247 vehicles in 1990 to 994 vehicles in 2002 respectively, far beyond the national level per 1000 persons of 91 vehicles in 1990, and 210 vehicles in 2002. (28)

This increased demand for private transport has been mainly driven by the lack of efficient public transport alternatives to cope with the accelerating demand in urban centres. To illustrate, the percentage of trips using private vehicles rose significantly from 47% in 1985 to 71% in 2005, while in the same period, the share of public transport dropped from 35% to 16%. (29)

Furthermore, the cost of private driving has been distortedly cheap because of subsidised fuel. In the past, for political, financial and technical reasons, attempts to alleviate urban congestion have been biased towards capital-intensive road building and traffic management. (30) But building and expanding roads is not a sustainable long-term solution as we are already running out of space.

In addition to traffic congestion that costs Malaysia in lost productivity, the excessive use of motor vehicles has led to noise and atmospheric pollution, accidents, environmental decay and unsustainable energy use. Making public transport more convenient and efficient is imperative.

b Lack of investment in public transport

Part of the problem with our public transport system has been the lack of capital investment; we have preferred to spend our money on building more and more roads and highways. For example, the KTM Komuter, which was established in 1995, now only has about 36 train sets (31) compared to its original 62 train sets. This is despite the fact that new stations have been added (32) and passenger demand has tripled. (33)

In the BN Federal Budget for 2009, Tun Abdullah Badawi promised to spend RM35billion on improving public transport over a period of 6 years (2009-2014). While it is uncertain how this sum is allocated, it averages out to just over RM5.83billion a year, or 1.1% of the 2008 GDP. (34) Compare this figure with Singapore, which already has a much better developed transport system and a much smaller geographical area. In 2008, Singapore spent $3.149 billion, or the equivalent of 1.46% of their GDP on road and public transport infrastructure. (35) Hence, even RM35billion over 6 years, if it is truly and effectively allocated, is insufficient.

c Reliance on private sector

A product of depending on the private sector to fork up both the money and the expertise to plan and develop public transport in the country is that there is a lack of coordination between the different private companies and hence a lack of connectivity between the different modes of transportation. It was not until the separate LRT lines were taken over that an integrated fare system in the form of the Touch’n’Go was introduced and enforced.

Moreover, when private corporations have financed public transport investment, such as the Putra-LRT, the Star-LRT and the KL Monorail, the government has been forced to step in to bail them out when the corporations could not afford to repay their loans, resulting in much higher cost of investment by the Government.

d Lack of planning and accountability

There is also a lack of proper planning and accountability when it comes to development of public transport. A good example is the situation involving the Klang Sentral Terminal B. The Klang Municipal Council spent RM700,000 on the North Klang bus terminal only to shut it down after 2 years and force bus  operators to move to the RM12million Klang Sentral terminal. Because of the location of the new bus terminal outside the town centre and the difference in rental costs, most bus  operators have been reluctant to shift. Now only 9 months after it was first opened, the Klang Sentral Terminal B has been abandoned by most bus operators. (36) There must be an authority tasked specifically with integrated planning and implementation of public transport policy, and that takes into account the views of all stakeholders.

The lack of objectivity and adequate planning is also clear from the purchase of 20 locomotives from China in 2003 for a sum of RM220million. Despite the original quality assessment report’s recommendation against the purchase, the government and KTMB continued with the purchase because of an agreement to trade 110,000 tonnes of palm oil with China. Because the trains were not made to KTMB’s specifications, the cooling system of the engines was unsuitable for local weather, and the wheels are incompatible with the tracks and thus wear out much faster. By May 2008, only 5 of those locomotives were operational, and the rest had to be repaired and overhauled. (37)

e Past achievements are not enough

Datuk Seri Najib Tun Razak recently announced, as part of his targets for the national Key Result Areas, that the Kelana Jaya LRT line is to get 35 new four-car train sets by 2012, (38) but it seems that this is the same 35 trains earlier promised and procured under the 2009 Budget that were expected to be fully operational by early 2010. (39) So not only is the federal target narrowly defined, it is an extension of the earlier deadline. This also reflects the lopsided development of transportation in Malaysia, with most of our funds focused in the Klang Valley area, and the neglect of our secondary cities.

While we support efforts to increase the capacity of the currently overcrowded rail systems, we think that on its own it is not enough. There are serious problems with the underlying structure of our public transport system. The DAP believes that in order to provide an efficient, reliable and integrated public transport system, the current system including the relevant governing and regulating authorities require a complete overhaul.

8.4.2 National Land Transportation Blueprint (NLTB)
Currently, 13 agencies handle public transport related issues. (40) The lack of harmonisation between the different agencies’ functions is reflected in their disorganised policies. The DAP holds that land transportation should be viewed holistically since the different forms of transportation affect one another.

Therefore, it is proposed to create a National Land Transportation Commission (NLTC) under the Ministry of Transport that will formulate the National Land Transportation Blueprint (NLTB). The current agencies handling various transportation matters will either be merged into the NLTC or at the least, be subjected to the guidelines of the NLTB and the authority of the NLTC.

The NLTB will provide a national framework for public transport and road building and integrate development of different aspects of transportation, i.e. rail, bus, taxi, cycling and walking. It will also set user-friendliness, energy consumption and emissions guidelines and targets. Most importantly, the NLTB will set out the roles and responsibilities of the independent transport authorities that are to be created.

a Independent transport authorities

Authority over the design and administration of public transport networks will be devolved to states. Every city will have a Transport Authority under the oversight of the local city council; for smaller towns and suburbs, they would be grouped together under the control of the State-wide Transport Authority. This would, along with local council elections and greater transparency and consultations, allow representation in the decision-making process from the communities directly affected by the transportation system. Moreover, instead of the current uneven development, each area’s transport development will hopefully better reflect their needs. However, all transportation plans should adhere to the national guidelines as laid out in the NLTB. Non-adherence will be penalized.

In the Klang Valley, which is too inter-connected for public transport management to be left to a single state or local council, the DAP proposes to create the Klang Valley Transport Authority (KVTA). The KVTA and other Federal or State transport authorities will work closely with the local governments controlling traffic management and parking in order to integrate management of urban mobility. This is akin to the Transport for London’s partnerships with the local boroughs.

The board of directors controlling the KVTA will be appointed by the Menteri Besar of Selangor; similarly, members of the board at State-wide Transport Authorities will be appointed by the respective Menteri Besar or Chief Minister whereas at City Transport Authorities, the elected mayor will be in charge. To ensure the close cooperation between the transport authorities and the local governments, local councils will be represented at the board at the KVTA and other STAs.

b Disbursing transport funds

Under this system of devolved transport expenditure, RM 13 billion is budgeted for public transport in 2010, and will be distributed to the individual states based on population and vehicle density. Areas with greater population and vehicle density have a greater and more pressing need for public transport and hence, will get more funds. These funds will be disbursed to states in the form of specific purpose grants.

The transport authorities will have to fulfil certain KPIs as determined by the NLTB. These should include indicators based on accessibility, availability, reliability, safety and comfort. There will also be financial targets such as cost recovery ratios. These indicators will be examined annually and over a 5-year period, and the public will have access to these figures.

c Limited competition and Gross-cost route contracts

As part of the NTLB implementation, the DAP proposes a regime of limited competition under the NLTB, which an EU study concluded was the best model among the EU states. (41) This regime allows the transport authority to prioritise stability and connectivity while seeking cost efficiency. The local transport authorities will control the design of the network and define the transport product that is to be delivered, although the actual design process can be outsourced to a professional team. The operators in charge for execution of the product will be determined via competitive and open tender.

Besides planning the network, the authority will own, and hence also fund, most necessary infrastructure including bus stops and terminals. The authority can then lease the infrastructure to operators. This will remove most barriers to entry for operators and prevent unnatural market concentration. The authority will also be the public face of the
transport network.

Gross-cost route contracts (42)  that also set minimum standards for production resources and service-levels, as well as incentives for quality of service and levels of patronage will be implemented. In a gross-cost route contract, all revenue collected goes to the authority, and the authority pays the operator a fixed sum based on the amount or service provided, i.e. the number of kilometres and hours run. Clauses built into the contract will financially reward good performance by the operators and penalize bad performance. Bidders that can operate a given route for the lowest cost (including profit margin) will win the tender. In such a structure, risk is shared. The authority takes responsibility for commercial risk whereas operators bear productive risks.

These contracts would be retendered every 5 years to ensure operating costs are kept low and are in line with current financial realities. Under such a contractual framework, local authorities can maintain control over the transportation network and hence policy goals can be achieved more easily. The authority can ensure integration between different modes of transport and that buses service all necessary areas. On lossmaking routes, bidders that can operate for the lowest cost would win the tender. As the transport authority will also in charge of setting fares and ensuring collection, they can
also continue pursuing fare integration and introducing concessionary fares.

d Align development with public transport objectives

Local draft plans and development planning must be in line with public transport requirements. New housing developments will have to integrate the development of public transport, such as potential bus routes and location of bus stops, into their plans before they can be approved by the local authorities. Network design must also incorporate transportation hubs at strategic locations to best integrate local public transport.

e User-friendly public transport

To increase public transport utilisation rates, we need to make existing and future public transport systems user-friendly. As efficient as transport operations may be, it is pointless if people find them incomprehensible. As will be outlined in the NLTB, information regarding public transport, including information regarding routes, frequencies and interchange points, should be made widely and easily available. For example, signs and route information should be clearly visible at bus stops and LRT stations; the relevant operators’ and transport authorities’ websites should be further developed and frequently updated. Simple guides and pamphlets should be free while more complex bus route maps, for example, could be made available for purchase.

All future network designs, infrastructure building and equipments will need to take into account the needs of elderly and disabled commuters. LRT stations will be fitted with barrier-free facilities such as tactile guides, ramps and lifts to make them more accessible. Transportation hubs will have disabled-friendly toilets installed. All new buses must have ramps for wheelchair access or be low-floor and step-free. Accordingly, all bus stops should be compatible with these buses and wheelchair-friendly pavements leading up to the bus stops will be introduced. Existing facilities will be gradually converted to be accessible.

f Specific tasks and initiatives

Some specific tasks that the new KVTA will be expected to carry out include investigating and improving connectivity between different rail systems and feeder buses in Klang Valley. New rail lines or expansion of current lines could also be explored, such as the “Circle” LRT line to connect the suburbs of Petaling Jaya, Puchong, Sri Petaling, Cheras, Ampang, Setapak, Setapak, Gombak, Sentul and Kepong while bypassing the congested city centre. At the same time, new bus services routes will be tendered to operators to reduce the need for expensive rail expansions. Park n Ride initiatives will
also be necessitated in new network designs. More parking areas will need to be designated near major LRT stations and transportation hubs.
Secondary cities should focus on developing an efficient bus transportation system. A bus system is likely to be more cost effective than a rail system because it does not require as large a number of passengers to reach critical mass.

Overall, the transportation sector will receive RM13.047 billion in development allocation, a 71.6% increase compared to the budget expenditure in 2009. This sizeable increase in allocation demonstrates DAP’s commitment towards a quantum leap in public transport infrastructure in Malaysia to trigger not only a better quality of living, but also a substantial boost in economic productivity in the country.

27. 2006 Media Index study by The Nielsen Company: http://my.nielsen.com/news/20070529.shtml

28. Fatima Kari and Rajah Rasiah “Automobile emissions and the environment: The Malaysian experience”
http://www.idrc.ca/en/ev-132167-201-1-DO_TOPIC.html

29. Ibid.

30. Jamilah Mohamad, “Whither Transport Plans in Kuala Lumpur? Progress and Challenges in Urban Transport Planning”
(1992)

31.“ Increase In Komuter Units To Decrease Peak Hour Crowds By March 2009”. Bernama. December 1, 2008.
http://www.bernama.com/bernama/v5/newsindex.php?id=375620

32. New stations since 1995 include KL Sentral, Mid Valley, Kepong Sentral, Serendah, Rasa and Kuala Kubu Bharu.

33. Darshini M. Nathan, “KTMB upgrades to be competitive”. The Star Bizweek. October 6, 2007.

34. In 2008, Malaysia’s GDP (at constant 2000 prices) was RM528.8billion.

35. In 2008, Singapore spent $3.149 billion on road and public transport infrastructure and had a GDP (at constant 2000 prices) of $233.4245 billion.

• http://www.singstat.gov.sg/stats/themes/economy/hist/gdp1.html
• http://www.singaporebudget.gov.sg/expenditure_overview/mot.html

36. “Klang folk are still upset over the relocation away from town”. The Star. February 10, 2009.
“Klang’s Terminal B closes after nine months”. Malay Mail. August 4, 2009.
“RapidKL dumps RM12m Klang Sentral”. The Star. April 22, 2009.

37. Badrolhisham Bidin, K. Baradan And U-En Ng, “Ong orders immediate probe” Malay Mail.
Manjit Kaur, “GMs should be held responsible, says railwaymen” The Star. May 9, 2008
“KTMB depot is for repairs”. The Star. May 10, 2008
Ng Cheng Yee, “Probe into ‘crocked’ locomotives”. The Star. December 18, 2008.

38. “Najib sets targets for Government to meet”. The Star. July 27, 2009. http://thestar.com.my/news/story.asp?
file=/2009/7/27/nation/20090727103556&sec=nation

39. Budget Speech 2009: “34. At the same time, 35 train carriages for the Kelana Jaya Line have been procured costing RM1.3 billion and these trains will be fully operational by early 2010.”

40. “Public transport: Too many cooks”. The Star. February 3, 2009. http://thestar.com.my/news/story.asp?file=/2009/2/3/nation/20090203191638&sec=nation

41.Results of the ISOTOPE project: http://www.eu-portal.net/material/materials/summary_kt1b.pdf

42. Route contract is when an authority issues a contract for the operation of one specified route or a specified group of routes; a gross-cost contract pays the operator a specified sum to provide a specified service for a specified period. All revenue collected is for the authority.

TRANSIT Says:

Wow. At least someone is listening. And thank you to everyone who has read down to the bottom of this lengthy post to see what we have to say.

As you can imagine, many of the comments we have made, proposals we have made and letters we have written over the past 5 years have been noted but it has been a problem trying to get these ideas incorporated as government policy.

And, while we have seen some glimmers of hope and change, the level of resistance on inertia and unwillingness to move has often been frustrating.

The 2010 Alternative Budget has done an excellent job of articulating and expressing the policy thrusts and changes for public transport that we have been pushing for the past 5 years.

What remains now is for the government to take action and actually make these changes happen, instead of standing by and continuing old, ineffective policies.