Malaysiakini Letter

Public transport seldom profitable

Joshua Woo  |  Published:  |  Modified:

LETTER | 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 has recently claimed that the Penang state government will bear RM1.2 billion losses if the ridership of the Light-Rail Transit (LRT) falls below estimated number for ten years.

It is, of course, ideal for public transport to be financially-sustainable without government grant and subsidy like Hong Kong's MTR system. However, ideals turn idealistic when based on wrong assumptions.

Almost all good and elaborate public transport system require expensive upgrades and operation costs paid by the government.

For instance, the operation costs of Curitiba’s Bus Rapid Transit (BRT) system (in Brazil) 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 their 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 expected to hit RM5 billion in losses in 2018 alone.

Balancing public transport expenditure is an uphill task even for London with all their 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 their public transport network. This is one of the strategies that the Penang Transport Master Plan will adopt to pay for the operating costs.

This is not to say that Penang’s LRT will incur loss but to point out the wrong assumption that operating public transport is profitable. Yet, this is no reason for public transport operator to be lackadaisical but to strive hard to balance the books.

The writer is a former member of the traffic management committee and urban planning committee of the Seberang Perai municipal council.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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