Invest in Bus Sector

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Sri Lanka Transport Board (SLTB), the State-owned bus operator, increased its operational loss to Rs 3.4 billion last year (2021) compared to an operational loss of Rs 2.2 billion recorded in the previous year 2020, Central Bank of Sri Lanka’s 2021 Annual Report said.

During the year, the subsidy provided by the Government to undertake operations on uneconomical routes and to facilitate subsidised season tickets amounted to Rs.12.2 billion, it further said.

Meanwhile, the Finance Ministry in its 2021 Annual Report said that nearly 38 per cent of commuters use public transportation, while the rest depend on their own vehicles and other modes. Sri Lanka Transport Board (SLTB) dominates the industry having the biggest bus fleet, around 7,000 buses, which operates through 107 bus depots covering the entire country.

SLTB caters for uneconomical routes particularly in remote areas through ‘Gami Seriya’, night-time services through ‘Nisi Seriya’ and providing low cost transportation services to schoolchildren through ‘Sisu Seriya’. Kilometres operated by SLTB fell by 30 per cent to 215 million in 2021 from 308 million kilometres in 2020 ‘owing to the travel restrictions’ imposed in the country.

As a result, revenue generated by SLTB significantly declined by 27 per cent to Rs 22,766 million in 2021 from Rs 31,128 million in 2020. The subsidy given by the General Treasury for operating uneconomical routes and season tickets amounted to Rs 10,600 million in 2021, from Rs 10,700 million in 2020. SLTB’s loss increased by 49 per cent to Rs 3,143 million in 2021, the Ministry said. The number of SLTB employees per SLTB bus increased by one (14.29 per cent) to eight; 2021 over 2020, from seven SLTB employees per SLTB bus in 2020, it said.

The above is a glimpse as to how much it costs the taxpayer to operate the, ipso facto, uneconomical SLTB. That was also one of several reasons for the reintroduction of private buses in 1979, the other being that the SLTB, then known as the Ceylon Transport Board (CTB), being unable to meet demand.

In contrast, private buses don’t cost the taxpayer a cent. Further, it’s not uncommon to find the operation of private buses, especially in internal suburban routes of Colombo, if not, on the main roads on the city itself, off office hours, where SLTB buses are few and far between, and, worst still, more often than not, totally absent.

Sri Lanka bus regulator is the National Transport Commission. Efficiency of the public transport system may be improved by increased competition, similar to the telecoms sector, where, after its liberalisation, beginning with the introduction of ‘Celltel’, a mobile telecoms operator and a subsidiary of Millicom, Sweden, in 1989 transformed Sri Lanka’s telecoms industry from a sellers’ market, when it was a Government monopoly, to a buyers’ market, after privatisation. Celltel has since been bought over by Etisalat, a UAE based telecoms operator.

One reason why the success of the privatisation of the country’s telecoms sector could not be replicated in the privatisation of Sri Lanka’s public transport sector is the absence of foreign players in the latter. The entrance of foreign players in the island’s telecoms sector elevated the service level of that sector, benefiting the public.

But a debilitating factor in attracting foreign direct investments (FDI) in to the public transport sector is the huge capital investment required. But that doesn’t mean that FDI in the bus sector doesn’t work. An example is the Dubai based Swvl. Though Swvl doesn’t own buses, it helps to find funding for bus operators.

Swvl currently operates in 115 cities across Europe, Africa, Asia, the Middle East, and Latin America, its website said. In the region, Swvl operates in Pakistan. Its fares however may be more than the ‘normal’ bus fares, which, probably raises questions of affordability, therewith causing a possible pause in operating in countries like Sri Lanka.

Nonetheless, with the Government encouraging public transport amidst its US dollar shortage to import fuel, there are a number of currently car/other vehicle going commuters who may be willing to switch over to a good, public transport system, regardless of having to pay a little more.