Malacca bus operators seek dialogue on proposed RM36mil fund

TRANSIT also took note of this article in which the Malacca government has proposed to seek RM36million from the Federal Government to subsidize public transport in the State of Malacca.

Malacca bus operators seek dialogue on proposed RM36mil fund (The Star)
Monday July 5, 2010

MALACCA: Bus operators here welcome a RM36mil move to improve Malacca’s public transportation business, but cautioned the state government that the plan could backfire if it ignores their views and feedback.

“We see the move as a positive step towards improving the state’s public transport system.

“However, the state government must not be too hasty in going ahead with its proposal without due consideration given to our earlier views,” said Malacca Omnibus Operators Association president Razali Endun.

Last Wednesday, Chief Minister Datuk Seri Mohd Ali Rustam said the state was seeking RM36mil from the Federal Government to improve the public transportation system.

The money would be used as a revolving fund and a bank guarantee to enable local bus operators to obtain the necessary bank loans to replace their old buses.

Mohd Ali said the state government would also use interest from the fund to provide subsidies to bus operators to ensure the buses plyed “social” routes that are usually not covered, owing to low profitability.

There are 11 companies operating some 206 buses that cover routes within the city as well as the Alor Gajah and Jasin districts.

Local bus operators, some operating vehicles that are more than ten years old, had claimed they were in a quandary as banks had refused to provide loans for them to buy new buses, each costing between RM350,000 and RM400,000.

Most of the bus companies are unable to cover non-profitable routes and have to rely on a state subsidy of RM1 per 4km to ply the social routes irrespective of passenger load.

Razali, who is also the Pan -Malaysian Bus Operators Association deputy president, said their views were raised at several meetings with the state.

“The proposed fund must ensure that bus operators here would be able to get soft loans from the banks to replace old buses.

“This excludes providing us with subsidies to enable us to cover specific social routes,” he said, when contacted yesterday.

Razali also questioned plans by the state to use RM2mil from the proposed fund to buy ten 40-seat coaches to be operated by its Panorama bus service.

He said the state government had admitted losses of RM1.2mil from three Panorama buses over the last three years.

“Rather than getting involved in a business that they would continue to lose, the state could use the money to subsidise existing bus operators,” he suggested. He added that competition between the state-owned Panorama and local bus operators would worsen the situation.

TRANSIT Says:

We find it interesting that the State Government of Malacca is interested in supporting the public transport industry but at the same time they are going about it the wrong way (like most governments except for Johor and their success is only in the Iskandar Region).

We also find it funny that the bus operators do not want the government to subsidize the Panorama operations – because it is money losing – but instead prefer that the government subsidize the money-losing operations of private companies.

Obviously this is not acceptable and the government must find a better solution.

Instead of going to the Federal Government for money to help continue an existing situation that is not working, the State Government needs to change the way they view the industry.

They should take control of all routes in the state and hire these routes out to the private operators on a contractual basis. The government would provide the direct payment to the operators and collect all the funds for the services.

Operators would be given appropriate payment for the services that they provide – and there would be no need for a continual subsidy – which is also money losing.