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Fiji Bus Industry Review

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Fiji Bus Industry Review Fiji Land Transport Authority Fiji Bus Industry Review Final Report Prepared by Dr Sion Haworth and Paul Starkey Transport Consultants October 2009 The views in this report are those of the authors and do not necessarily reflect the views of the Fiji Land Transport Authority for whom the report was prepared Orion Consulting Associates Team Paul Starkey (Transport Consultant and Team Leader) Orion Consulting Associates BV, Mail: Oxgate, 64 Northcourt Avenue, Reading RG2 7HQ, UK Tel: + 44 118-987 2152 Fax: + 44 (0)118-931 4525 Email: [email protected] and [email protected] Dr Sion Haworth (Transport Consultant) Orion Consulting Associates BV International telephone contact: +265 993420714 Email: [email protected] Orion Consulting Associates BV, De Hulst 5, 9301 PB Roden, The Netherlands, Registered Private Limited Company, Amsterdam: 1436650; Chamber of Commerce: 04084569, VAT no: NL818239293B01 T : +31 (0)50 50 11 444 M: +31 (0)6 190 29 775 F: +31 (0)50 50 19 333 [email protected], http://www.orion-associates.com Table of Contents Preface and acknowledgements ...............................................................................................................4 Executive Summary ..................................................................................................................................5 Acronyms, abbreviations and exchange rates .............................................................................................8 1. Introduction ........................................................................................................................................9 2. Overview of the bus industry in Fiji .................................................................................................9 2.1. Historically an excellent bus service..........................................................................................9 2.2. Public perceptions of the bus industry .....................................................................................10 2.3. Complementary and competing forms of transport..................................................................10 2.4. A crisis in the bus industry.......................................................................................................11 2.5. Cultural issues..........................................................................................................................12 3. The Legal and Regulatory Framework ..........................................................................................12 3.1. The LTA Act............................................................................................................................12 3.1.1. Short History ......................................................................................................................12 3.1.2. LTA Act .............................................................................................................................12 3.1.3. Main technical areas covered by the Act............................................................................13 3.1.4. Strengths and weaknesses of the Act and its enforcement .................................................14 3.2. Safety and accidents.................................................................................................................14 3.2.1. Safety regulations...............................................................................................................14 3.2.2. Public submissions on bus safety .......................................................................................15 3.2.3. Enforcement of safety regulations......................................................................................16 3.2.4. Accidents............................................................................................................................17 3.2.5. Insurance ............................................................................................................................18 3.3. Review of current route licences..............................................................................................18 3.4. Bus fares...................................................................................................................................18 3.4.1. Bus fare legislation.............................................................................................................18 3.4.2. Fuel and oil prices ..............................................................................................................19 3.4.3. Bus fare levels ....................................................................................................................20 3.4.4. Subsidiary legislation for bus fare determination...............................................................20 3.5. Quality of bus services.............................................................................................................20 3.5.1. Age of buses.......................................................................................................................21 3.5.2. Emissions, smoke and noise pollution................................................................................22 3.6. Bus operating costs ..................................................................................................................23 3.6.1. Fuel and other costs............................................................................................................23 3.6.2. LTA’s role in verifying running costs................................................................................24 3.7. Assessment of the road network...............................................................................................24 3.7.1. Quality of the road network................................................................................................24 3.7.2. Affects of the road network on urban, inter-urban and rural services ................................25 3.7.3. Inadequate road maintenance .............................................................................................25 3.8. Affect of other transport operators on the bus industry............................................................26 3.8.1. Competition, complementary and regulation .....................................................................26 3.8.2. Minibuses ...........................................................................................................................26 3.8.3. Carriers...............................................................................................................................27 3.8.4. Taxis and people carriers....................................................................................................28 4. Financial issues, concessions and fares...........................................................................................28 4.1. Concessions provided to the bus industry................................................................................28 4.2. Concessionary fares .................................................................................................................29 4.2.1. School children...................................................................................................................29 4.2.2. Senior citizens and disabled ...............................................................................................30 Fiji Bus Industry Review: Final Report Page 1 4.2.3. Subsidies.............................................................................................................................30 4.2.4. Subsidy and concession issues ...........................................................................................30 4.3. Concessions, subsidies and financial losses.............................................................................30 4.3.1. Losses on school routes......................................................................................................30 4.3.2. Losses on rural routes.........................................................................................................30 4.3.3. Comparison of concessions, subsidies and losses in 2008 .................................................31 4.4. Financial health of the industry................................................................................................32 4.4.1. Bus operating costs.............................................................................................................32 4.4.2. Effectiveness of subsidies ..................................................................................................32 4.4.3. Possible abuse of subsidies.................................................................................................33 4.5. Options for fare structure and subsidies...................................................................................33 4.5.1. Assumptions.......................................................................................................................33 4.5.2. Economic model options....................................................................................................34 4.5.3. Tendering options...............................................................................................................36 4.6. Options for improving industry profitability............................................................................36
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