“The potential of this sector is still to be explored,” said a leading transporter. “The fact that a meagre number of 18,000 public transport vehicles — buses, coaches, mini buses — catering to the transportation needs of 15 million people in Karachi points to a gap between demand and supply,” he added.
Irshad Bukhari, President of the Transport Ittehad, told Dawn that private bus owners were reluctant to make new investment in this sector because the rising diesel prices had led to a massive reduction in their profit margin, rendering the business less attractive.
He said that in October 1999, when President Musharraf took over, the diesel price was Rs10.66 per litre. In next six years it has increased by a staggering 225 per cent. The diesel is now selling at around Rs34.59 per litre.
The fares were also increased that hover around Rs6 to Rs10 for mini-buses, Rs11 to Rs12 for coaches and Rs6 to Rs8.50 for busses. The average diesel consumption for a day’s running stood at 70 litres for coaches and mini-buses and 100-110 litres for buses.
“It has become very difficult for bus owners to survive on meagre profits, as the maintenance cost has also increased manifolds following a massive rise in prices of petroleum products,” said Mr Bukhari, who is also general-secretary of the Karachi Bus Owners Association.
He pointed out that earlier a coach or mini-bus saved Rs1,000 per day and a bus in the range of Rs500 to Rs700 after deducting other expenses (driver and conductor’s wages and bribe to traffic police), which now fell to Rs500 for coaches and Rs300 for buses, excluding the maintenance cost.
“How can you expect fresh investment from the bus owners when they are not able to make a decent profit, he posed a question and added that over the last 52 years the diesel prices touched Rs10.66 in 1999, and over the last six years it surged to Rs34.59 per litre. He saw deregulation of petroleum prices to be the main reason that led to petroleum products price escalation.
About 1,000 vehicles — buses, coaches, mini-buses and taxis — were burnt down during 1986 to 1999 in violent strikes, which transporters said also kept potential investors away from investing in the public transport sector.
Insurance companies were also reluctant to give them cover because majority of vehicles were second-hand or very old. As it was mandatory under the law for getting a route permit, a way out had been made available in the form of third party insurance system.
Many private transporters contacted were found to have a uniform opinion on the Oil Companies Advisory Committee (OCAC). They wanted the government to dissolve the OCAC and revert to the old system. They said that they were in favour of a cut in diesel prices and not for an increase in fares.
Roughly 18,000 vehicles — buses, mini-buses and coaches — and a good number of them of 30 years old, with smoke-emitting shaky-bodies, are plying on the roads. More than 70 per cent of Karachiites depend on the public transport. The idea of humiliation they have to suffer while travelling can be had from the fact that to reach their destination many times they have to put their lives at risk by climbing on the roofs, hanging on the doors and clinging on rear of the vehicle.
During the first nine months of this calendar year about 441 people lost their lives in road accidents, as compared to 415 killed during the same period last year.
DIG Traffic Flak Khurshid informs Dawn that facilitating investment does not come under the ambit of traffic police.
Dr Muhammad Tahir Somroo, EDO Transport, City Government, when approached agreed that profit margins for the private sector had shrunk over the years, but he asserted that it did not mean that there was no new investment in this sector.
He feels that transporters’ demand to bring the diesel prices down is unrealistic, as the international petroleum prices are rising steeply.
He admitted that the investment was not matching the potential. Keeping this in view, he said, the city government in 2002 launched the Urban Transport Scheme, a public-private partnership venture, which attracted about Rs120 million from the private sector.
He said that under the UTS about 300-400 new air-conditioned buses were to start operations in phases, some of these buses were imported from Sweden, and the remaining were of local makes — Hino, Nissan, etc.
Unfortunately, he said, the Swedish buses are not plying on the roads in Karachi for technical reasons. He said that their air-conditioning and suspension systems were not working properly. Some such buses were altered to suit local environment to keep them on roads.
He further said that the city government was also planning to set up seven intra-city bus terminals in the city. These would be offered to the private investors on sharing basis with the government to improve the infrastructure and traffic system.
“A proactive transport policy is need of the hour to attract fresh investment, both local and foreign. For that the basic infrastructure needs to be improved as well as there should be laws protecting the investment and ensuring maximum return,” the EDO added.