Controlled Public Transport Fares in the Developing World: Help or Hindrance to the Urban Poor?

Institute of Transportation Engineers. ITE Journal,  Jun 2005  by Thompson, John E,  Nagayama, Katsuhide

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Potentially the best way to directly target the urban poor in Cairo is to incorporate transport into the various welfare programs (none of which directly address transport) now offered by the Ministry of Social Affairs. Three hurdles must be overcome: the required organizational adjustments; the political agreement to re-allocate financial support for transport of the poor; and a willingness on the part of the ministry to accept this responsibility.

BUILDING AN INTEGRATED NETWORK

Coordination among the different public transport modes is minimal at present in Cairo. To achieve a fully integrated and efficient public transport network, GREATS planning for future public transport systems has been carried out according to a clear functional hierarchy and including physical integration, operational integration and tariff integration.

This carries implications for the urban poor. First, the issue of intermodality is important, particularly for poorer Cairenes living in more outlying areas where interchange between services is more likely to be required. At present, this entails payment of multiple fares, considerably increasing transport expenditure.

Second, the private sector, whose operation is profit oriented, is likely to set competitive fare levels that strike a balance between needs (and capabilities for payment) of the public and intensity of service.

Third, services need not be limited to specific vehicle types or fixed routes. As an example, a variety of transport modes in Bangkok, Thailand (motorcycle taxis, three-wheeled tuk-tuks, converted small trucks, microbuses), tend to ply more readily (and affordably) poorer areas and along much smaller roads (paths) than formal services.

The Road to Privatization

Closely allied with the previous point is a gradual transition toward commercialization of public transport services. This process of reform is not limited to two extremes; that is, the current public monopoly and an (ultimately) totally free market. Instead, a variety of intermediate regimes are possible that draw upon the strengths and capabilities of respective sectors to provide a responsive and adequate level of public transport service (contracting, franchising, concessions and licensing, among others).

In addition to the inherent efficiencies of operation, there is evidence, for example, that the introduction of competitive tendering can reduce public transport costs by up to 40 percent per vehicle kilometer, which could be translated into lower fares from which poorer people could benefit.12 Recent examples in this regard are found in Argentina, Uzbekistan, Kazakhstan and India.

The ultimate goal is to provide the best service at the least cost to government developed around a model where the government's eventual role is that of strategic planner, coordinator and regulator, and where the private sector is increasingly responsible for the actual operation of services under minimal regulation and in a competitive environment.

Within the Cairo context, the first hesitant steps have begun since completion of the master plan, with the franchising of some minibus routes to the private sector.