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MALAYSIA: State to Run City Buses as Privatisation Fails

Anil Netto

PENANG, Malaysia, Mar 11 2007 (IPS) - A state-owned bus company is set to take over public transport in this traffic-clogged northern state after a concerted civil society campaign highlighted the failure of the existing privatised, deregulated bus service.

But public transport campaigners are not about to celebrate. They are wary of a federal-level firm, albeit government-owned, coming in to manage what is essentially a state-level metropolitan bus service. Earlier with the lack of enforcement by a federal-level regulatory board has not inspired confidence that an ‘imported’ solution is best.

In a way, the failure of the privatised, deregulated model in Penang mirrors what happened in the national capital of Kuala Lumpur, where the public transport system, privatised in piecemeal fashion to well connected firms, flopped spectacularly. These private firms, which ran the bus services and light rail transit systems in the Kuala Lumpur area, chalked up huge losses largely as a result of a lack of integration among the different services and poor coordination and enforcement.

Concerned about mounting losses, the government stepped in to bail out these firms. Eventually, a government-owned firm, RapidKL, took over bus and light rail transit services in the capital. The same firm is now set to enter Penang, under the name ‘RapidPenang’, to revamp public transport here and give the existing private bus operators a run for their money.

The move was announced last month by Prime Minister Abdullah Badawi, who said it was a “Chinese New Year gift” for the people of Penang. He was responding to a plea by Penang Chief Minister Koh Tsu Koon, who had asked for RapidKL to manage the Penang bus system and integrate it with a proposed monorail system, to be built in the next few years.

Koh pointed that the state government did not have the expertise to manage a public transport system. Last April, the state government had attempted to revamp the privatised bus system in Penang but its endeavour failed to take off as “last chance” warnings to private bus operators went not heeded and revamp proposals ignored.

Activists from the Citizens for Public Transport (Cepat), a coalition of Penang based civil society groups, pinned the blame on the buccaneering private operators and weak regulatory enforcement. They accused the federal-level Commercial Vehicle Licensing Board (CVLB) of allowing the private bus operators here to flout regulations and permit conditions with impunity.

‘‘It’s a failure of government,” says public transport campaigner Ahmad Chik, alluding to the mismanagement and the lack of enforcement of private bus operators.

‘‘If the Penang government does not have the expertise, then RapidKL can come and provide consulting services,” he added. On the other hand, ‘‘if RapidKL runs the service, then it becomes just a KL operation over which they (the Penang state government) have no control.”

Until the 1970s, Penang had a fairly reliable, if dated, bus service, run by the then Penang City Council. This affordable service supplemented the private bus operators’ routes and covered most of the main routes in Penang.

But the overall bus service deteriorated when the city council’s service was scrapped more than a decade ago, and services completely privatised and deregulated – or at least not effectively regulated. To compound matters, old minibuses from Kuala Lumpur and other states found their way to Penang. These discarded buses proved to be an embarrassment and eyesore for residents of this popular tourist destination.

It did not help that the federal government was also actively promoting sales of the “national car”, Proton back then. Not surprisingly, sales of private cars and motorcycles soared even as the neglected and poorly supervised bus services steadily deteriorated, resulting in increasingly clogged roads. Bus schedules were ignored as bus drivers ruled the day, waiting at bus terminals and departing only when the buses were packed.

RapidKL/RapidPenang will now attempt to reverse the decline in Penang. Incorporated in 2004, it is run by Rangkaian Pengangkutan Integrasi Deras Sdn Bhd., a firm wholly owned by the finance ministry. Some 150 new RapidPenang buses are expected to hit the streets of Penang in August.

Some campaigners feel that the Penang government was a little too hasty in asking for a federal solution. After all, the Penang state government had only recently set up its own firm, Penang State Bus Service (BNPP), which a senior state government official said would now become obsolete. BNPP had been in the midst of applying for permits from the CVLB while the Penang state government, for its part, had already obtained a 50 million ringgit (14.2 million US dollars) soft loan to buy new buses.

‘‘Everywhere in the world, public transport is a local responsibility,” observes Ahmad. ‘‘In other words, the city normally runs the transport service because the local authorities know best what is needed locally.”

For those monitoring public transport here, the hard work begins now. “I would suggest that Cepat and the state government start engaging RapidKL and ask the tough questions: their strategy, operating plans, target performance indicators (service coverage, frequency, quality, reliability, safety, fare structure, plans for connectivity with other existing and future modes of transport (ferry, monorail), co-existence or competition with taxis,” said a transport planning analyst. “Serve them notice that they will be watched closely and will have to deliver irrespective of the CVLB.”

RapidPenang meanwhile has promised that the new bus fares would be lower than the rates charged by the five existing operators in Penang.

But some activists are concerned that the existing private operators could undermine RapidPenang’s operations. For one thing, devoid of any social responsibility, the private operators could end up serving only the profitable routes as and when they like, leaving it to RapidPenang to take care of the unprofitable routes.

Activists are now demanding a state-level transport advisory committee or even a state transport commission with enforcement powers – rather than the heavily criticised CVLB – to keep Penang’s bus operators on their toes. Such a body could include representatives from the government, the public and bus operators themselves.

‘‘We really don’t know enough about the guidelines, especially the roles and responsibilities (of the various parties),” laments Choong Sim Poey, a Cepat coordinator, who wondered how accountable RapidPenang would be to the state government and to the public.

‘‘What role do the state government and the public have in influencing decisions? They must have a say. If they don’t, I am very pessimistic. Can the state government very quickly come out with a plan where we know the role of the government, the NGOs, in this whole system?”