A Concession Model to Promote Rural Bus Services In Sri Lanka

Abstract

Sri Lanka has a public transport system that dates back to the 1860s. Buses entered the service in 1907 and have become the most widely used mode of transport. The penetration level of buses is 1 bus per 1000 population. The per capita bus travel is approximately 12 km per day. These services cover urban, inter-urban as well as rural services. Rural services however have always been loss making. This is due to the fact that such areas have lower household incomes and are therefore unable to generate high volumes of travel and are also unable to pay higher fares for resulting lower vehicle occupancies. Since over 70% of Sri Lanka’s population resides in rural areas, successive governments have provided subsidise for such bus services. However many such rural routes have remained loss-making in spite of receiving grants for decades. This has resulted in the Government being unable to expand the rural bus services as it has not been possible to develop the revenues on such routes to ensure profitability and to move on to other routes. As a result, the reliability of such services has diminished and rural communities do not have appeared to have developed on account of the provision of subsidised bus services. This paper is an evaluation of a new model for subsidising rural bus routes under the ‘Gami Saeriya’ program which was initiated in 2004. These concession contracts rely on the intervention of a Community Based Monitoring Committee where the subsidy payments are paid by the regulator only on the certification of the compliance by the bus operator to selected operational targets. There are presently around 500 such services operated by both the public and private sector. Of a total of 18 such awards made in 2004/5, 13 services have now completed their contract period successfully. The paper analyses the results of an evaluation of these services in terms of the increase in ridership, the reliability of services, the resulting benefits to the community and the level of financial viability they have reached to continue without subsidy. The paper is based on the analysis of feedback through participatory group surveys of passengers, members of Community Based Monitoring Committees and officials of the Transport Commission. The paper concludes by identifying key criterion which determines the success of these agreements and makes recommendations how such agreements could be developed further to meet specific rural community development objectives.