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[Thai Economics Library | Archives| Currency Crisis 2007| Entrepreneurs]
June 03, 2009

busrentals

To lease or not to lease?
The controversial Bangkok public bus scheme

By Jon Fernquest

buses to be leasedThe controversial Bangkok city bus leasing  scheme is the topic of this week's commentary by veteran Bangkok Post reporter Atiya Achakulwisut. 

A detailed
assessment of the scheme is provided.

This is one of the top stories in the news this week (Read articles #1, #2#3, and #4).

[Update: The controversial bus leasing project will be submitted to the cabinet for approval today (Wednesday) See Bangkok Post breaking news]

(Photo on right of controversial NGV public buses which the government plans to lease)

COMMENTARY

A busload of questions on rental scheme

By Atiya Achakulwisut
2/06/2009

Let's face it. Bangkok's public buses have never been a preferred mode of transportation for the city's dwellers. Some are crowded. Others run at unpredictable intervals - two of them may arrive at the same time at the same stop, or you wait an hour and none show up. Some offer a scary ride that can turn your trip into a suicide mission. Others make you feel like being part of a gangster movie - you don't know when the driver or fare collector would take out some hidden weapon (usually it's the long removable gear stick) and storm out of the vehicle to fight some roadside enemy.

The main reason why city buses continue to exist is that they are cheap. The fare ranges from 6 baht for a hot bus to about 24 baht for an air-con one. There is no other reason why Bangkok people tolerate it (except for some few routes where an availability of bus lanes makes it faster to travel by bus than private car). No score on service. No impression on safety. No compliment on being convenient. And it is definitely not a fast way to move compared to the Skytrain or the Metro.

As we are on a blunt note, let me say it is not surprising the Transport Ministry's plan to lease 4,000 buses to add to the city's fleet is not popular with anyone. In fact, it seems to have just one single lonely and die-hard supporter: Transport Minister Sohpon Zarum.

controversial - a subject that people disagree about and argue about
leasing -
renting
a veteran -  a person with a lot of experience, involved in an activity for a long time
an assessment -
looking at the details to make a judgement about something
NGV (natural gas for vehicles) - vehicles (cars, trucks, buses) that use either compressed natural gas or less commonly liquified natural gas, these vehicles are popular in Argentina, Brazil, Iran, Pakistan, Italy, Germany, Malaysia, and Thailand, especially popular in taxis to cut fuel costs (See Wikipedia)
a busload of questions - a lot of questions (so many it would take a big bus to carry all the questions)
let's face it
- meaning: we have to accept some unpleasant facts
public buses - government owned (or leased) buses that anyone travel in for a small amount of money  
preferred - people like it more than others
a mode of transportation - cars, motorcycles, buses, airplanes, boats, different ways of moving from one place to another
dwell - live in
dwellers - the people who live in or at a place
unpredictable - not possible to say exactly what will happen
unpredictable intervals -
cannot know how long we must wait between bus arrivals
run, buses run
- buses operate and send passengers along a route 
show up - arrive at the place
scary - frightening, makes you afraid and fearful 
gangster - a member of a group of criminals
tolerate - accept the unpleasant without complaining 
availability -  they exist and people can use them 
bus lanes - special lanes in the street that only buses can use (if cars use them they are fined money by police)
an impression - an opinion you have from casually observing something   
a compliment - telling someone that you think something about them is very good (example: what a dress that is!)
convenient - easy to use
Skytrain - Bangkok's elevated train that runs above the streets (See Wikipedia)
Metro - Bangkok's subway, underground railway (See Wikipedia)
blunt - speak what you think without softening it for your audience (who might not agree with you and be angry)
die-hard -  never fails or quits
die-hard supporter - a person show supports and helps some person or cause, without fail, without quitting

The project's critics have pointed out the outrageous price tag (67.9 billion baht) for a proposal that seems to hinge on an unrealistic projection of future income - 10,000 baht per bus per day when the Bangkok Mass Transit Authority (BMTA) which will be the project operator earns an average of 6,000 to 7,000 baht per bus per day at present.

Don't forget that within the 10-year timeframe of the lease, there may be at least one or two more mass transit train lines in operation (maybe an example of too rosy a projection of the future on my part). They will eat into the scheme's projected number of customers. In short, the projected commuters to use the public bus and, thus, income should be lower, not higher.

They also questioned the leasing and maintenance fees - set at 2,082 and 2,250 baht per bus per day respectively - as too high. A private operator said the maintenance fees should be about half the quoted price at 600 to 1,300 baht only. Some critics said that at this price, the BMTA might as well buy the buses and own them.

outrageous - not believable, ridiculous, laughable
price tag - how much something costs (a tag with the price on it attached to the item for sale)
X hinges on Y - X depends on Y, Y determines what happens to X 
unrealistic - not believable, cannot really happen 
unrealistic projection of future income
-  say that they will earn a lot of money in the future that is not really possible
10-year timeframe - will happen within or over a period of 10 years 
lease - rent
too rosy - too optimistic, believe the future will better than it will actually be
commuters -  people traveling from home to work in the afternoon and evening

Unlike these critics, I do not oppose the ministry's option to lease instead of buying these buses. I agree that outsourcing these operations could save the BMTA a lot of headaches regarding repairing and replacing broken buses, not to say plugging some holes that allow corruption to take place.

However, I am with the critics when it comes to the romantic projections. Most of all, I disagree with the size of the project. Minister Sohpon suggested that the bus-leasing investment is part of the plan to restructure the debt-ridden BMTA and turn it into a profitable organisation. No question there, but one must ask if the huge investment is the only way to revive the agency.

an option - one plan that can be chosen
BMTA (Bangkok Metropolitan Transit Authority) -  the government agency in charge of public buses in Bangkok
outsourcing -  hiring an outside company to do work (instead of doing the work inside with their own workers)
debt-ridden - must pay back too much money
revive - bring back to life

Has the minister checked whether the BMTA operates at maximum efficiency and that it can handle the additional budget and workload without undue losses? Above all, how profitable should an organisation apparently set up as a semi-welfare service for the urban poor be? It is, after all, a public organisation.

Minister Sohpon has not discussed any alternative for the BMTA's profitability except to push for the massive addition to the fleet, without even considering future changes in the commuter landscape and culture.

Little surprise, then, that his bus scheme is finding it hard to reach the feasibility highway.

efficiency - doing a lot of work with little resources
operates at maximum efficiency
- do the most work possible with given resources
handle the workload - be able to do all the work you were asked to do
undue losses -
more losses than is necessary, lose too much
welfare services -
services to help people with their living conditions and financial problems
semi-X -
partly X 
semi-welfare service for the urban poor - a service provided to help poor people in the cities with their living conditions and financial problems 

Which brings us to another basic contention in the scheme. Why would the proposed public buses need a GPS navigational system?

Those who have been on a public bus would know that it runs on a fixed route. If you have a smart enough driver, you don't need an electronic device to guide him or her. It would be redundant. The minister might argue that the GPS would allow the control base to manipulate the fleet better. Those who know Bangkok traffic, however, would realise instantly that this is daydreaming.

Another frill that should be trimmed from this overly ambitious project is the e-ticketing system to be installed in every bus. Who needs such an expensive complicated device on board a bus when a simple fare box should be enough?

Let's cut through the glut and frills and be honest. This project features a busload of questions. It should not be endorsed in the current shape.

a contention - an idea or opinion that someone expresses in a discussion or argument
Global Positioning System (GPS), GPS navigational system - a computer system that shows you where you are on a map by using satellite signals, can be used to help you find directions to a place while driving in your car (See Wikipedia)
redundant - something not needed (because you already have it or something like it)
manipulate - skillfully move or control something
daydreaming -  thinking about pleasant things you would like to happen, instead of doing your work
ambitious - have very high goals that are difficult to achieve 
overly ambitious - the goals are too high and difficult to achieve
e-ticketing system
- a computer system for giving tickets to customers 
frills - extra things, that are not really needed
endorsed - approved of, be given approval 

(Source: Bangkok Post, op-ed section, 2/06/2009, A busload of questions on rental scheme, Atiya Achakulwisut, link




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