Friday, October 09, 2009

Public Transport - Penny Wise and Pound Foolish?

Below is an open letter by regular commentator on Malaysia's public transport system, and a founder of TRANSIT Malaysia.

In the past 5 year that I have been watching and analysing public transport in Malaysia, the phrase "penny wise and pound foolish" keeps coming to mind.

This phrase refers to the idea that someone can be so focused on small amounts of money that they do not pay attention to the larger amounts of money that are being lost. And this description is especially apt in Malaysia where we attempt to save millions of ringgit on public transport but end up losing billions of ringgit as a result.

The government of Malaysia never wanted to take up the cost of investing in and operating a public transport system. For that reason, the bus industry was largely privatized. This system operated well for many years, until the government made two crucial decisions that hurt public transport. First, the government invested in private cars, and second, as part of an effort to increase "competition" and cut costs, the government allowed too many companies to enter the public transport markets.

The result of the government's 'penny wise' decision to not invest or operate public bus transport led to massive congestion in Malaysian cities that has cost the local and national economy billions of ringgit every year in terms of lost productivity, wasted time and air pollution (among others).

Instead of spending a little bit of money and increasing regulation and enforcement, the government made the 'pound foolish' decision of taking over bus companies to create Intrakota - which they then merged with CityLiner to become RapidKL. And congestion has only gotten worse.

When it was recognized that there was a need for a higher level of public transport in the form of a rail network, the government allowed KTMB to introduce the KTM Komuter service. Back in the 1990s the government and KTMB were quite "penny-wise" by using existing tracks, building simple stations with small roofs and stairs but no lifts, and buying a small fleet of 60 Electric Multiple Unit trains.

The result of the government's 'penny wise' decision to build the KTM Komuter service at the most basic level has led to massive congestion on the KTM Komuter service as demand has increased by 200% while the number of operating trains has decreased by 65%. KTM Komuter is carrying 3 times the number of passengers with 1-half of the trains. And yet, the government still shows no interest in investing in the new Komuter carriages that are desperately needed.

When it was recognized that there was a need for mass-transit in the cities, the government allowed private companies to take charge of the planning, financing and operations of the LRT and monorail systems. Back then the government was not ready to take on the massive costs of investment in "light" rapid transit, so allowing private companies to take charge reduced the amount of money the government would have to spend.

The result of the government's 'penny wise' decision to let private companies take charge is that the Klang Valley has 3 separate public transport lines that are poorly integrated and use different technologies, and that all 3 companies were unable to meet their projected revenues, which required costly government takeovers.

Today Prasarana has taken over the operations of STAR, PUTRA, CityLiner and Intrakota and replaced them with the RapidKL public transport service and demand for public transport has declined to 16% in Malaysia and less than 20% in the Klang Valley - and the economic losses have continued to mount.

Unfortunately, we have not learned our lesson and continue to apply the same 'penny-wise, pound-oolish' approach. The KRA Urban Transport Panel knows that solutions have been clearly identified but they are still asking the operators for 'feedback' - continuing the 'penny-wise' approach. The public blames KTMB for inefficiency and suggest that they should be 'penny wise' and cut costs but they forget that the problems are caused by the lack of investment - which is only going to cost more in the future. Other people are expressing a 'penny wise' concern that Prasarana has moved to a new office at Bangsar, but they are not concerned about the RM15 billion cost of the proposed LRT lines.
The only way we are going to see real improvement in public transport is when we stop being 'penny wise' and 'pound foolish' and start investing money in public transport to build a system that is well-planned, efficient and very, very effective.


Moaz Yusuf Ahmad
Petaling Jaya, Malaysia
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