Thursday 22 September 2011

Overhauling Dhaka bus business

Yet another in my series on traffic management solutions. The solution presented here is very Dhaka-centric and designed with Bangladeshi characteristics and idiosyncrasies in mind. As always the idea can just as easily be replicated in all the other cities and towns across Bangladesh... and in this case, if this idea is ever implemented, should.

Traffic Management: Lesson 6: Dhaka has little to offer as options in public transport, people can walk, take the rickshaw or jump on an already overcrowded and dilapidated bus run by the government or the private sector.

The buses never run timely but are always run poorly. What Dhaka needs before the metro line or the elevated expressway come is a complete overhaul of the bus system. Mind you people who invest in this sector do so to make money – and the cut-throat nature of the industry extends to how the business is run.


This very nature causes the onus of profitability to fall squarely on the shoulder of the driver and his ability to maximise the number of round trips on his designated route (which can only be achieved by rash driving, running red lights and blocking the way for the competition, and by that definition – traffic in general, in order to make the next stop 'quicker').

Thus Lesson 6: Buy the bus proposes that the transport business be regularised (in all nuances of the word) through a hybrid-privatisation method formulated specifically with Bangladeshi characteristics in mind.

The idea is to create a body corporate that would function as the custodian as well as the regulator of the transport company. The body corporate would mainly comprise of salaried private sector professionals (on rotating chairmanship), with representation from both the government and the transport union. The business would be regulated by the body corporate who would have the sole authority to purchases and run buses in Dhaka city. Anyone interested to invest in the public transport business would buy shares in the purchase of a bus. All buses would be the property of the company, with shareholders holding collective ownership of the company. This way no one individual would actually ever own a single bus but would be part owner of every bus on the street.

Profits (and losses) would be shared through dividends paid out on each share. This would eliminate rash driving as the profits would be divided regardless of how many round trips a bus was able to make or whether any of the buses were down for repairs (thus ensuring buses were never dilapidated or unsafe on the streets).

Another by-product of this system would be that protesters would not damage buses because it could potentially hurt their (or their bosses') profits or payout on shares in the long term.

At the end of each fiscal year, the shareholders would be appraised on the number of buses acquired, the cost behind running each bus, as well as the cost associated with driver training, etiquette and licensing (as well as the cost for the loss of any bus due to political protest or mob attack, in case of an accident).

[Frankly I believe if the buses were being driven safer and receiving proper maintenance there would be fewer fatalities or accidents on the roads.]

Moreover with buses not blocking the road or being driven recklessly the streets of Dhaka could potentially be easier on gridlock, the shareholding formula would also translate to more buses on the streets as the investment threshold would be much lower for interested parties.

That the public transport industry is not profitable is not even a question, given the size of the population and the size of the need-gap public transport is an immensely profitable venture and would have literally millions of interested investors.

While more buses would mean more employment, the existence of a body corporate would also mean that the drivers of these buses would better trained which in turn would mean better, and safer, drivers on the streets.

It is important to point out that there would be a proviso in the formulation of this transport company that 12-15 per cent of net profits would have to be put to use to build (and repair) more roads in the city.

A win-win throughout, particularly because the government would be out of the transport business altogether and could direct its efforts on building those better roads... and removing the gridlock.
As a bonus opportunity, the rickshaw pullers and owners association could pool money and invest in this company as well. This would provide rickshaw pullers a handsome profit and an additional income at the end of each year. In turn the extra funds would provide a way out for the puller as well and put Dhaka closer to being a rickshaw-free city.

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