Comparative Study on Institutional System of Urban Bus Transportation: Bangkok, Hanoi, Singapore, Tokyo, and Yangon

Proceeding of the Eastern Asia Society for Transportation Studies, Vol.8, 2011 Comparative Study on Institutional System of Urban Bus Transportation: Bangkok, Hanoi, Singapore, Tokyo, and Yangon Nozomi SAITO Hironori KATO Urban Development and Logistics Dept., Associate Professor Infrastructure Development Division, Department of Civil Engineering Overseas Consulting Administration Graduate School of Engineering Nippon Koei, Co. Ltd. University of Tokyo 4 Kojimachi 5-chome, Chiyoda-ku, Tokyo 7-3-1, Hongo, Bunkyo-ku, Tokyo 102-8539 Japan 113-8656 Japan Fax: +81-3-5276-3306 Fax: +81-3-5841-7496 E-mail: [email protected] E-mail: [email protected] Abstract: This paper reviews the current statutory and operational system of urban bus service and reports the impacts of the regulation system on the local bus market in five mega cities in Asia: Bangkok, Hanoi, Singapore, Tokyo, and Yangon. The bus-related laws/acts are collected through interviews with government officials in the cities. The results show that the definition of vehicle types, the fare regulations, responsibilities of public and private sectors, and the permission system of urban bus operation vary among the cities. Then, the paper proposes the Index of Market Intervention for Urban Bus with which the degree of market intervention by the government is evaluated in a given bus market. Finally, the paper presents the recommendations: the differentiation of regulation for small-sized vehicles from that for large-sized vehicles, the transparent decision-making process of fare setting in unstable markets, and the private management under the well-organized control of government. Key Words: urban bus service, comparative analysis, institutional system, regulation framework 1. INTRODUCTION Buses are one of the most principal transportation modes in many developing urban areas. This is also the case in major cities of the Southeast Asia Region (SEAR). Local people use the bus for home-to-work, home-to-school, business, and private travel. However, the rapid motorization has caused the inefficient use of road space, traffic congestion, and serious air pollution in the major cities in the SEAR while it damages the ridership of public transportation including buses (Ieda, 2010). Thus an active policy favoring public transportation is required to generate quality transportation alternatives that can compete with private cars (Munoz and Grange, 2010). It is widely agreed that the bus market should be regulated to correct the distortions of the market in the transportation sector (Button, 1993). In reality, the bus regulatory system seems to vary among the cities/countries. This is probably because the bus regulatory system is highly dependent on the characteristics of local transportation market. A special issue in Research in Transportation Economics reports the recent experiences of bus market regulation and management in various countries, including Augustin and Walter (2010), Gibson (2010), Jansson and Pyddoke (2010), Muñoz and de Grange (2010), Rolim et al. (2010), and Sakai and Shoji (2010). However, the urban bus systems in the SEAR have not been well reported, in particular they have never been compared from a single perspective. Although the experience of bus reform in one city may be useful for the bus system in another city, such information has not been shared among the Proceeding of the Eastern Asia Society for Transportation Studies, Vol.8, 2011 bus regulators in the SEAR. Then this paper aims to compare the urban bus transportation systems among four major mega cities in the SEAR and Tokyo, Japan and to withdraw the lessons from them. The cities in the SEAR are Bangkok in Thailand, Hanoi in Vietnam, Singapore, and Yangon in Myanmar. The data including the statutory system and the current operations of bus transportation in those cities are collected through the half-structured interviews and paper-based questionnaire surveys to bus authorities. The paper is organized as follows: the next section reviews the statutory system and its operation of urban bus service in the five cities. They include the overview of the bus market, the operational authority, and the statutory framework on operation and fare setting. Then, they are compared from the viewpoints of the license system, the permission system, competition type, fare regulation, and the degree of governmental intervention into the bus market. Finally, the achievements are summarized with lessons learned from the analysis and further research issues and recommendations are presented. The interviews and literature reviews of laws/acts were carried out in September to December 2008. Thus, it should be noted that general information and data pertaining to the five cities before 2008 were used in this study. 2. STATUTORY SYSTEM AND ITS OPERATION OF URBAN BUS SERVICE IN FIVE CITIES 2.1. Bangkok 2.1.1. Overview of urban bus transportation system in Bangkok In Bangkok the urban bus provides the main route service along major streets whereas the para-transit including Songthaew, Silor Lek, and motorcycle taxis provides a feeder service in the narrow dead-end side branching off major streets. Bus accounts for 37 percent in passengers among the three existing transportation modes including railway (subway), buses, and other automobiles in the Bangkok Metropolitan Region (OTP-IMAC, 2004). The operation and management of urban buses in Bangkok are delegated to the Bangkok Mass Transit Authority (BMTA). Approximately 51 percent of its stocks are owned by the state government. Currently it operates mini buses, vans, off-main-road buses as well as regular buses. In recent years, the BMTA has faced serious financial problems. This is mainly because the fare is regulated to be too low to cover the operational cost and this leads to unprofitable operations on most of routes. This resulted in the annual loss of 508 million baht in March 2007 (Bangkok Mass Transit Authority, 2007). The BMTA has been issuing own bonds to compensate these losses. 2.1.2. Statutory framework of urban bus regulation in Bangkok Thai central government is responsible for urban public transportation in Bangkok, which includes the Office of Transport & Traffic Policy and Planning, the Department of Land Transport, and the BMTA. In Thailand, there are two acts regulating the urban bus services: 1979 Land Transport Act and 1979 Motor Car Act. Although there is no definition of or limitation on the capacity of buses, Section 4 in the 1979 Land Transport Act defines public service motor cars including taxis as those with the capacity of seven seats or less, which are distinguished from buses. Public transportations are categorized into the three types by its route and by vehicle size: Fixed route transport service, Non-fixed-route transport service, and Transport service with a small-vehicle. Proceeding of the Eastern Asia Society for Transportation Studies, Vol.8, 2011 The BMTA is in charge of both planning and operating urban bus services for local people who reside and work in Bangkok and nearby provinces. It has the monopolistic power on the urban bus service. To start the urban bus service, local bus operators are required to pay a registration fee, 500 baht for a large bus and 300 baht for a small bus every seven years. Routes are also determined by the BMTA. Approximately 24 percent of total routes are operated by private companies as a joint service with the BMTA (BMTA, 2007). The fare setting process is vaguely defined in the acts/laws. The Central Land Transport Control Board (CLTCB) has authority to fix the fare rates of transportation and other service charges. Note that the fare regulation is not presented in any act/law. However, those charges are often determined by referring to the discussions in the Cabinet. The two types of fare systems have been introduced: a flat rate system for non-air-conditioned buses and a distant- based rate system for air-conditioned buses. Regular basic buses in Bangkok set under the flat rate system with seven baht as the lowest price of bus services, which is primarily determined by the central government. The fare table of the urban bus service except the regular buses is basically calculated under the cost-plus pricing, which determines the fare on the basis of the estimated total cost. Section 23 of the 1979 Local Transport Act presents the following four types of licenses by route and by vehicle size: a fixed-route, a non-fixed-route, a small- vehicle, and a private transportation. Section 27 of the 1979 Local Transport Act prescribes the principles and processes of licensing. The license of the fixed-route transportation is valid for seven years while the licenses of non-fixed routes and small-vehicle transportation are valid for five years. These licenses are given by the provincial board under the Ministerial regulation. 2.2. Hanoi 2.2.1. Overview of urban bus transportation system in Hanoi The bus is the only available urban public transportation in Hanoi. However, recent traffic surveys show that motorcycles account for 85 percent of vehicles in the city and cars account for 5 percent and buses for 9 percent in 2007 (JICA, 2007). The urban bus service in Hanoi is provided by the Hanoi Bus Company under the Transport and Public Works Service (TUPWS). The Transport Management and Operation Center (TRAMOC) is a main administrative body in the urban bus market of Hanoi. It was established by the Decision No. 3527/QĐ-UBND of the Hanoi People’s Committee (HPC) in 1998. Its main function is to support the Director of TUPWS to manage and operate public transportation in the city. In 2001, the Hanoi local government merged all local buses into a single company called TRANSERCO. TRANSERCO was a state owned enterprise under the control of TUPWS and a single bus operator in Hanoi before 2004.

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