Opinion: Projects in conflict in Megapolis transport plan?

By Commuter

Colombo’s chronic congestion is everybody’s favorite bugbear. The government’s Megapolis Plan identifies it as one of the “6 key urban development challenges” which it expects to address, to achieve the “5 fundamental goals” of economic growth and prosperity, good governance, an efficient, well-planned region, social equity and harmony and environmental sustainability. That would be commuter heaven. The hell though, is in the details.

Chronic congestion cannot be solved in bits and pieces. Only the stupid or the corrupt would endorse projects like Rajagiriya Flyover to resolve congestion. There should be a master plan identifying the different measures needed – with both hardware such as transport infrastructure and software such as demand management measures.

Such a master plan should not be just a compilation of wish lists of agencies with differing agendas, but a list of pragmatic, practical, cohesive initiatives towards a single goal (or 5 as per Megapolis).

So let’s pick up a couple of $$$ projects listed in the Megapolis transport plan and see if they pass the test. From the Megapolis list, the Cabinet has already approved a Light Rail Transit (LRT) network, as well as an elevated urban expressway network through our city.

LRT (Malabe – Colombo)

The first lines of the LRT at least, are expected to be financed by sovereign borrowings. This means the LRT will be a public investment – for a public service Government is expected to provide. All tax-paying public will pay for it, and the resulting asset will belong to the public.

In a city with wide income disparity the fares would have to be reasonably low to be affordable to the majority. LRTs are not cheap and the revenue from an affordable fare rate will not be sufficient to build, operate and maintain it to the requisite standard. At least initially, the operation and maintenance would also have to be subsidized by the tax-paying public, whether they use it or not.

But that’s justified because of the wide ranging economic returns which will benefit all public – like the savings of foreign reserves for fuel, reduction of air pollution, and safe and equitable access to mobility. In effect, everybody who pay for it will get some benefit.

Elevated Highway (Peliyagoda-Athurugiriya)

The elevated expressway appears to be covering the same geographical areas as these LRT lines. The Government’s own Road Development Authority (RDA) has recently closed Expressions of Interest (EoI) to implement this project. According to the EoI documents, RDA wants the selected Contractor to conduct Feasibility Study, EIA, design, build, operate and transfer after 30 years.  (http://www.rda.gov.lk/source/bid_invitation.htm ).

In this model a private firm will build and operate it on terms of lowest risk and highest returns to its shareholders. The asset will belong to the private firm for 30 years to get their return on investment, hopefully subject to some regulation.

But the land will be given free by the Government – so basically the public are giving up their own assets and will pay to use the resulting asset. Probably the Government will give the concessionaire a 30 year tax holiday, so even that revenue will be lost to the country.

LRT v. Elevated Highway

Note that both of these projects are covering the same overall area, largely run parallel and cross over each other in some places. Both of them rely on the same market – people traveling through that area – for revenue.

elevated-highway-colombo

Figure 1: Elevated expressway route from the EoI documents for bidders: http://www.rda.gov.lk/supported/noticeboard/bid_invitation/elewated_highway/EOI%20R-A%2022-9-2016.pdf

lrt-colombo

Figure 2: LRT network from Megapolis Transport Master Plan http://www.megapolis.gov.lk/pdf/new_megapolis/Master%20Plan%20V2.2.pdf

If you are a regular commuter between Battaramulla and Fort, you are either on your bike, tuk, truck or car burning a hole in your pocket, or on a bus dreaming about the day you get on one of the aforesaid. So now imagine you have a nice shiny LRT and a nice shiny elevated highway. What would you choose?

If you are on a motorbike or tuk, you cannot get on the highway. If the toll is very high, even the rich will not use it. Especially if the LRT is successful and most of the road users shift, the existing road will be less congested. Consider also, the idea of this expressway is to link Colombo Katunayake Expressway (E03) to Outer Circular Expressway (E02).

But once Kadawatha-Kerawalapitiya piece of the E02 is completed, E03 will be linked to E02 at the current toll rates which are barely sufficient to cover the routine operation and maintenance costs. So what would one have to do to make people use this shiny new elevated highway to Athurugiriya and make sufficient revenue to be financially viable for a private sector BOT? I could think of a number of ways, but none of them in public interest.

To make the LRT operation self-sufficient and thereby reduce the burden of subsidy for the national budget, the Government has to encourage the public to get out of their private vehicles, and even some of the other public transport, and get on to the LRT.

The more passengers the LRT gets, the less it would rely on subsidy. The Delhi Metro – with fares lower than other transport modes in India – managed to reach operational profitability from the very beginning due to its high ridership, and is now able to pay back some of the capital cost. That’s where our Government should aim to go with our LRT.

What then, of the new elevated highway? In order to recover its expenditure and make a profit for the shareholders, they will need to find ways to get the passengers off the public-owned LRT and public-owned E02 on to the new highway. By hook, or by crook.

So our Government which is supposed to safeguard public interest, is handing over public assets (land) free to a private company to enable them to compete against other public assets (LRT and E02). If the revenue targets of the highway are not met, undoubtedly the gap will have to be funded by the Government, in some way. The EoI documents refer to an annuity to be paid to the concessionaire. Whichever way, that will also be our public funds.

Public statements of Ministry of Megapolis estimated the costs of the 25km LRT line to be USD 1.25 Billion. RDA’s EoI documents state the estimated cost of 10.4km of elevated expressway at USD 430 Million. That’s 50 million dollars a km for a LRT which could carry around 30,000 passengers per hour per direction, vs. 43 million dollars a km for an elevated expressway which needs to earn almost the same revenue with less than half the length, and less than 1/3rd the carrying capacity. Do the math.

So, we the public are paying to build our own assets, and paying to build the assets of the competition. Then we will also pay to sustain the losses of both.

Strategic Suicide

Constructing a highway at the same area and at the same time of a public-owned LRT and partly duplicating an existing expressway seems economic and financial suicide. Perhaps this is why the RDA chose not to mention the LRT in the EoI documents for the elevated highway. The tragedy is that in the end, we the public will pay the price. Like we do now for Hambantota ‘assets’.

If our bureaucrats do not have the capacity to think strategically in public interest, the cabinet is supposed to do that before approving a project. The way cabinet approvals are given to projects these days, one wonders if any scrutiny happens at all. Neither the bureaucrats nor the cabinet pay tax – so it is not their hard-earned money that they are throwing around. Perhaps that is why neither group care. And that is all the more reason why we, the public have to.