Public transport as not-for-profit public service
Developing and sustaining public transport is expensive. This is true for most countries around the world.
An expert from London’s Centre for Transport Studies recently claimed that the Penang state government will bear RM1.2 billion in losses if the ridership of the Light-Rail Transit (LRT) falls below the estimated number for ten years.
It is of course ideal for public transport to be financially sustainable without government grants and subsidies, such as the Hong Kong MTR system. However, ideals turn idealistic when based on the wrong assumptions.
Almost all good and elaborate public transport systems require expensive upgrades and operational costs paid by the government.
For instance, the operational cost of Curitiba’s Bus Rapid Transit (BRT) system has to be paid for by the government to cover the accumulated RM1.3 billion financial loss incurred in seven years (2010-2017), while Bogota’s BRT needed the government’s financial aid of “hundreds of millions of pesos per year on top of already budgeted funds and revenue collected from passengers”.
Singapore’s government subsidised its elaborate public transport system with about RM120 billion for ten years. That is RM12 billion per year.
London’s public transport received an annual government grant of about RM3.7 billion. Nevertheless, the London public transport authority has been recording losses in the past years and it is expected to hit RM5 billion in 2018 alone. Balancing public transport expenditure is an uphill task even for London with all its learned experts at the Centre for Transport Studies.
Financially self-sustaining systems such as Hong Kong’s MTR depend heavily on transit-oriented development that capitalises on land use along with their public transport network. This is one of the strategies that the Penang Transport Master Plan will adopt to pay for operational costs.
This is not to say that Penang’s LRT will incur a loss, but to point out the wrong assumption that operating public transport is profitable. Yet, this is no reason for public transport operators to be lackadaisical, instead, they should strive hard to balance the book.
An expert from London’s Centre for Transport Studies recently claimed that the Penang state government will bear RM1.2 billion in losses if the ridership of the Light-Rail Transit (LRT) falls below the estimated number for ten years.
It is of course ideal for public transport to be financially sustainable without government grants and subsidies, such as the Hong Kong MTR system. However, ideals turn idealistic when based on the wrong assumptions.
Almost all good and elaborate public transport systems require expensive upgrades and operational costs paid by the government.
For instance, the operational cost of Curitiba’s Bus Rapid Transit (BRT) system has to be paid for by the government to cover the accumulated RM1.3 billion financial loss incurred in seven years (2010-2017), while Bogota’s BRT needed the government’s financial aid of “hundreds of millions of pesos per year on top of already budgeted funds and revenue collected from passengers”.
Singapore’s government subsidised its elaborate public transport system with about RM120 billion for ten years. That is RM12 billion per year.
London’s public transport received an annual government grant of about RM3.7 billion. Nevertheless, the London public transport authority has been recording losses in the past years and it is expected to hit RM5 billion in 2018 alone. Balancing public transport expenditure is an uphill task even for London with all its learned experts at the Centre for Transport Studies.
Financially self-sustaining systems such as Hong Kong’s MTR depend heavily on transit-oriented development that capitalises on land use along with their public transport network. This is one of the strategies that the Penang Transport Master Plan will adopt to pay for operational costs.
This is not to say that Penang’s LRT will incur a loss, but to point out the wrong assumption that operating public transport is profitable. Yet, this is no reason for public transport operators to be lackadaisical, instead, they should strive hard to balance the book.
