• UOC Department of Economics Prof. Lalithasiri Gunaruwan

Sri Lanka’s public sector passenger transport mode share is gradually dwindling, with significant gaps in service quality and priority policies, driving people more towards private-sector motorised vehicle usage. This shift comes with dire externalities and economic consequences affecting the overall national economy.

In an interview with The Sunday Morning Business, University of Colombo (UOC) Department of Economics Prof. Lalithasiri Gunaruwan shared the immediate structural requirements as well as the overall opportunity cost of this shift.

Following are excerpts:

What is Sri Lanka’s current public sector passenger mode share and how has it changed over the years?

Sri Lanka’s public transport sector mode share is gradually being eroded. Even as late as 2005, the public transport mode share stood at around 62%, decreasing to around 51% by 2015 and eventually to 40% or below by 2023/’24. 

This means the number of passenger kilometres, used to measure the transport industry scale, has gradually dwindled, with people shifting towards private transport modes. One passenger kilometre equals transporting a passenger for one kilometre.

One might ask why the opportunity to own private transport is problematic when using one’s own money. However, the circumstances are not so simple when it comes to industries or activities with externalities, an effect spilling over to others who do not benefit from one’s activities but still bear the cost. 

Private transport modes come with certain implications that can be considered negative for the national economy and the environment.

What are these externalities and the affiliated costs? 

First of all, motorised transport vehicles burn fuel, generating significant exhaust emissions full of carbon pollution while moving, leading to reduced air quality. However, per litre of fuel burnt, the number of passenger kilometres transported in public transport is much higher than in private transport.

A car, on average, would run 10-15 km per litre, with 3-4 passengers travelling on average, amounting to 30-40 passenger kilometres per litre. A bus, in contrast, has an average of 40 seats, requiring 1 litre for 3-4 km, amounting to at least 120 passenger kilometres per litre, making it nearly four times more energy efficient, with much lower emissions per passenger kilometre.

Moreover, a train with 10 compartments, with each compartment consisting of 80-100 seats, requires 3 litres of fuel per kilometre, amounting to over 300 passenger kilometres per litre at the minimum level. 

In terms of fuel consumption, a total of 30-40 passenger kilometres per litre results in increased fuel burning, affecting the national economy. As a heavily dollar-dependent country burdened with foreign debt, it is of national importance that Sri Lanka spends its available foreign exchange earned through exports economically and sparingly, protecting the country’s sovereignty.

Road space utilisation is another concern with the rise in private transport, whereas public transport is an example of efficient road space usage. Personal vehicles do not have to pay a toll for inefficient road space use and expressways do not even charge the true cost of maintenance and capital expenditure from private vehicles, instead relying on the Treasury. 

While such measures may not be politically popular, they should be considered as these would indirectly lead to encouraging people to switch to public transport. Another issue is road accidents, with one in 50 deaths annually on average being due to a road accident in Sri Lanka.

Alongside this, congestion leads to increased travel time, with average travel speeds in Colombo during peak hours dropping below 10 km per hour, resulting in wasted productivity. Vulnerable communities suffer the most from these externalities. Therefore, for the benefit of society, it is important that public transport is heavily encouraged.

Sri Lankan public transport is to be modernised with the introduction of 1,000 new buses, including luxury buses, to the fleet, with the current Sri Lanka Transport Board (SLTB) fleet at 5,000 buses. How significant is the existing gap in the fleet, and how important is it to further strengthen and improve it? 

Strengthening public transport and improving service quality are necessary steps that will encourage people to at least retain, if not increase, their use of public transport. However, improvements must take into account why people are moving away from buses to private transport modes. 

It is also necessary to determine which categories of buses are in short supply and which are required on the roads. These decisions should be based on a comprehensive survey that examines why people are moving away from public transport while considering all relevant parameters. 

In terms of infrastructure and service quality, multiple concerns exist. There is a notable failure to issue tickets in public transport. Personal dignity and comfort, especially for women, are severely lacking, in addition to overcrowded, jam-packed conditions, where passengers are treated as mere goods rather than people. 

There are safety concerns and road discipline issues, raising questions about the eligibility and professionalism of bus crews, particularly in private-sector public transport operations.

While adding new buses and increasing the SLTB fleet is important, given that some depots already lack an adequate number of buses, this alone may not be enough to retain the market share of public transport or resolve the most pressing issues in the public sector. There needs to be a more policy-oriented approach to protecting public transport’s share in the market.

How do you assess the railway system’s efficiency and performance at present?

Railway mode share is dwindling as well. It used to offer the most affordable fare level to the public, but with increasing purchasing power, other options are being considered. There are qualitative and punctuality-related issues such as delays, cancellations, overloading, and the internal quality of carriages within the system that also contribute to this dwindling. 

However, the Railways Department is providing even this level of service with great difficulty, as the railway has long received ‘step-motherly’ treatment from policymakers.

Railway infrastructure is not given free to the railway, whereas infrastructure is provided free of charge to road transport. Unless the Government treats the railway in the same manner as road transport, separately maintaining accounts for infrastructure maintenance such as tunnels, bridges, tracks, signals, and controllers, the current financial burden will persist. Addressing this issue would lead to a substantial and drastic reduction in the losses currently reflected in railway accounts. 

The Government maintains the Road Development Authority (RDA) under State power, so why not maintain railway infrastructure in a similar manner? Unfortunately, this unfair treatment is not adequately addressed in the country. 

These gaps in policies and the allocation of infrastructure expenditures under the financial accounts of the railway have led to cash and liquidity shortages. Otherwise, railway accounts would reflect better financial performance and the improved liquidity would allow for quality improvements and necessary repairs.

Considering these circumstances, it can be argued that the railway is performing a credible job despite these shortcomings, although not up to the standards expected by the public. However, the management must address internal issues within the Railways Department’s control. The general public also lacks an understanding of the value of railway services and is unaware of the systemic issues, leading to a lack of public lobbying.

In public sector transport, what structural changes are required strategically to improve convenience and encourage use? What should the Government do differently?

The Government must adopt a public transport priority policy. Professionals in the field have been lobbying for this since the 1970s, with pioneers and veteran transport professionals such as John Diandas vigorously advocating for such a policy. 

There were three main aspects to this policy in the past, including a public transport priority policy, a railway transport priority policy, and an increase in larger capacity vehicles, with energy efficiency being added later on. Unfortunately, successive governments have failed to recognise these requirements through their policies and strategies.

As a contributor to policy and strategy documents in 1997 under the National Development Council, I was involved in drafting a bus policy and railway strategy, which outlined the necessary policy changes and restructuring strategies. However, these critical documents received only a minimal glance and were not seriously considered. 

The bigger concern at the time was State-Owned Enterprises (SOEs) running at a loss, leading to demands for restructuring and privatisation of the SLTB and railway. 

However, I believe this approach misses the real issue, as the root cause lies elsewhere. Considering privatisation, selling shares in the stock market, and corporatisation as remedial actions, which has been the continuous approach over the years, fails to address the underlying structural problems.

Several times, strategy formulators and transport professionals have advocated a cohesive priority policy through various document submissions. However, while certain policies exist, they are merely accumulating dust on shelves, awaiting implementation. Sufficient documentation is available on what the real problems are, yet what is pursued is only surface-level reformation. 

A government elected for a five-year term does not own State assets; these assets belong to the citizens of the country. Therefore, it is crucial to develop these assets responsibly, ensuring they are passed on to future generations.

What measures are required to ensure profitability of State-owned public transport?

A persistent mistake in the country has been the political interference in SOEs, preventing them from becoming profitable ventures. The agenda of efficient operation management in SOEs often remains marginal due to other State priorities.

While loss-making SOEs are a concern, there are viable models to ensure profitability while keeping public transport under State ownership. This requires allowing professional management to operate independently, reducing political interference, and holding management accountable for financial performance. 

Further solutions to these concerns can be implemented through legal and statutory mechanisms, empowering the general public to challenge mismanagement when SOEs continuously operate at a loss. Additionally, social welfare services related to transport can be ensured through Treasury allocations, rather than allowing transport organisations to absorb the losses.

While SOEs require reforms and a favourable policy environment, both remain under the Government’s jurisdiction. Policy documentation already exists, enabling the Government to address implementation challenges. Reforms can also be made without compromising national sovereignty or the rightful ownership of these State assets by the people.