Are the PH govt’s populist transport policies short-sighted?

While PH's key transport policies are music to the ears of most Malaysians, a successful implementation of these policies does not appear to be logical nor feasible.

COMMENT

By Roger Teoh

It has been 16 months since I last wrote an opinion piece to assess the potential drawbacks and consequences of different transport policies proposed in Malaysia. In this short article, I will be providing an input regarding the feasibility and soundness of the transport policies as proposed, or to be implemented by the new Pakatan Harapan (PH) government.

Before I begin, I would like to extend my congratulations to all Malaysians for achieving the impossible by voting BN out of power in the 14th General Election. During the election campaign period, I have refrained from voicing out my concerns regarding the transport policies proposed in the PH manifesto despite identifying several contradictory policies. This was to prevent the corrupt-ridden BN government from taking advantage of this issue. Now that the honeymoon period for the new PH government is over, it is a social responsibility to restart the debate on several key transport policies proposed by the PH government. The general public deserves to be informed and to have a more general understanding of the potential consequences of these transport policies.

To recap, the key transport policies proposed in the PH manifesto are to promote the ownership and use of cars and to improve public transport in tandem. Several vehicle-oriented policies such as the reintroduction of fuel subsidies, abolishment of toll concessions and the reduction of excise duties for the purchase of a first car under 1600cc were proposed. Simultaneously, the PH government also promises to introduce an RM100 monthly pass for the unlimited use of public transport and add 10,000 additional public buses in service. While these policies are music to the ears to most Malaysians, a successful implementation of these policies does not appear to be logical nor feasible.

Short-term gain, long-term pain?

Without a doubt, the reintroduction of fuel subsidies, abolishment of tolls, and cheaper access to vehicle purchases are expected to lower the cost of transport, and hence the cost of living for Malaysians. However, the reduction in the cost of operating a personal vehicle leads to unintended consequences where commuters are attracted away from public transport and back to the roads. The projected increase in road traffic demand will further exacerbate the already congested road network in the urban areas of Malaysia.

Now, the reader might disagree with the stated outcome above by arguing that the concurrent improvements in public transport promised by the PH government could provide Malaysians with an alternative option to use public transport and offset the increasing road traffic demand. Given that the car use and public transport modal share are inversely correlated, it will be unrealistic to achieve success in both personal vehicles and public transport at the same time, as illustrated in the following example.

Despite the promise of the PH government to add 10,000 buses into service, buses do not have a dedicated right-of-way and will continue to be caught up in traffic congestion caused by the increasing cars on the road. Therefore, travel time by bus or public transport could increase even though additional buses are added to service. To make matters worse, as Malaysians are attracted back to using personal vehicles, there will be fewer commuters using public transport, leading to a reduction in operating revenue for bus providers. Due to the reduced demand, bus operators will likely decide to cut back on service frequencies, which further reduces the attractiveness of public transport as travel time increases, continuing the negative vicious cycle.

Additionally, the recent announcement by the PH government to dissolve the Malaysian Land Public Transport Commission (SPAD) is regressive and disturbing. This is akin to the UK Government disbanding Transport for London (TfL), or the Singapore Government abolishing the Land Transport Authority (LTA), which will be unthinkable.

In the new transport paradigm, many urban cities in the developed world have discovered that traffic congestion cannot be resolved by solely approaching and isolating it as a transportation problem. Rather, the ideal approach to resolve transportation woes is an interdisciplinary approach where transport and land use planning are addressed simultaneously.

The main purpose of the creation of SPAD was to achieve transport-land use synergies, in which, giving credit when it is due, preliminary results up to this day were encouraging as the car modal share in Kuala Lumpur has successfully decreased to below 80%, prior to its 85% peak in 2005. Although the PH Government has intentions to absorb SPAD and its remaining staff into the Transport Ministry, it will likely cause future initiatives to perform sub-optimally given the reduced scope of work.

Termination of several mega transport infrastructures

According to the ‘Downs-Thompson’ Paradox, the best way to increase average road speeds (and reduce traffic congestion) is to reduce travel times by rail. The rationale behind it is that the improvement of alternative modes such as rail will increase transit patronage and induce economies of scale, which subsequently reduces personal vehicles on the road and increases the overall equilibrium speed on the road. However, the proposed MRT 3 “Circle Line”, which was proposed to link multiple public transport modes has also been scrapped by the PH Government. The High-Speed Rail (HSR) linking Kuala Lumpur and Singapore too suffered a similar fate.

While the new finance minister rightly pointed out that the RM1 trillion debt level left by the previous BN government has to be addressed, it does not make logical sense for the government to complain about the high debt levels and implement populist policies such as subsidising petrol, scrapping GST and toll concessions at the same time. Although it is true that the scrapping of these megaprojects will temporary improve the Malaysian Government’s balance sheet by reducing the debt burden, the removal of GST is expected to increase the budget deficit and subsequently increase the debt levels by around RM135 billion in 5 years (assuming RM21 billion of annual lost revenue from GST, 4.265% annual interest rates and 6% economic growth).

To make matters worse, the rail-based HSR or MRT 3 “Circle Line” is expected to generate wider economic benefits and a Return of Investment (ROI) over the long term, while the populist approach of zero-rating GST (funded by debt) is akin to spending future money and does not create any value over time. If the objective of the PH government is to reduce the debt levels in the short term, this should be reflected in a more consistent policy approach where HSR and MRT 3 is scrapped, together with delaying the removal of GST until alternative revenue sources are found.

Alternative approach: Short-term pain, long-term gain

It will not be fair for me to criticise the PH government on these proposed policies without coming up with alternative policies for a comparison. The proposed alternative policies are listed below:

Keep toll concessions and abolish fuel subsidies but use the revenue to subsidise and improve public transport services or construct new public transport infrastructures.

Introduce a congestion charging scheme around Kuala Lumpur City Centre, then use the revenue to subsidise and improve public transport services or construct new public transport infrastructures.

Retain and empower SPAD as an independent entity or a new independent governmental department, instead of answering to the Prime Minister’s Department.

Delay the zero-rating of GST in the short term, together with the scrapping of KUL-SIN HSR and MRT 3 to be consistent, and use the revenues collected to pay down the national debt. Remember that compounding interests are a killer for future generations.

Although these policies go against the populist approach championed by the new PH government, I believe that Malaysians will be more receptive of these proposed policies as long as there is more transparency on how the funds are used with minimal wastage. However, politicians around the world are often focused on short-term policies and results that can be achieved within their term in office at the expense of long-term sustainable solutions. Note that better public transportation also lowers the cost of living as there will be no more need for individual households to own multiple cars, which subsequently reduces the need for car mortgages and maintenance costs.

An inconvenient truth

Without the foundation of relevant agencies and sound transport policies, it is highly unlikely that Malaysians will ever experience the convenience of high-quality public transport systems as experienced by developed cities such as London and Singapore. Without a paradigm shift in transport policies, Malaysians will also continue to suffer from worsening traffic congestion, deteriorating air quality, health and quality of life from the increased use of motorised vehicles.

Are not the values of honesty & clean governance that Malaysians should be upholding, not blind support to a single party? And now, will the ex-opposition supporters exert the same pressure to the new federal government as they did to BN earlier to keep Pakatan Harapan in check & accountable?

Roger Teoh is a PhD postgraduate studying at the Centre for Transport Studies, Imperial College London. -FMT