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ON THE RIGHT: Franchise system a worthy solution

Dr Stephen Harewood

ON THE RIGHT: Franchise system a worthy solution

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One of the biggest problems when it comes to people using public transport is the quality of service. There are many people who will not leave their cars at home and catch any of our buses because the quality of service does not match the standard of living of the general population.
The quality of service is low.
You also have the high operational costs.
The entire transport system has built-in inefficiencies, which help to increase the costs for both the private operators and the Transport Board.
A ZR van can’t be more than a certain size, what economic sense is there in that?
A minibus can’t be more than a certain size. Those sort of restrictions don’t make economic sense.  The high taxes on the private transport: is it to punish them?
I don’t know what it is, but it increases the cost of operation. Then we have the disorderly behaviour, the blocking of the roads and those sort of things.
So my solution is complete privatisation with a franchising system with operators having exclusive right to operate given services, which is what we had long ago before the service was completely nationalised in the 1970s – but then they introduced this more or less free for all system since then.
The franchising system will remove competition from the roads because that’s what we have now, competition on the roads, which leads to the lawless behaviour and the accidents.
Competition will come at the point of the bidding [on] the franchise. After you are given the right to operate a service you [would] have exclusive right to provide that service, which goes back to what we had before, and franchises should be awarded for a specific period so as to ensure that standards are maintained.
Also, we need a Transport Authority with responsibility solely for regulation, nothing else.
They would set the standards, they would ensure compliance with the standards, they would set fares and they would approve services.
All services will not be financially viable. Say you need buses to operate between 8 p.m. and midnight but the demand is low, those services would have to be subsidised so as to ensure that the operators can get a reasonable return, a fair return, on their investment.
But subsidies should be based only on cost benefit analysis so that if an operator operates a service, the service would only be provided if the benefits exceed the cost, and if that is the case then the Government will provide the additional money to ensure that the service is provided.
And that for sure will reduce the Government’s subsidy to transportation considerably because right now Government is subsidising inefficiencies in the transportation system.
And we also need to help to encourage people to use the transportation system, better integration between different modes of transport, between pedestrians and buses, between buses and private cars.
So you can drive your car to a park and ride centre, leave your car there and get into the bus and go to your destination.
• Dr Stephen Harewood is a senior lecturer, Economics, at UWI’s Cave Hill Campus. His current research interests include revenue management, facility location planning, and transportation management.