by Adeel Abid
“You get a car. You get a car. Everybody here gets A CAR.”
The day Oprah handed cars to every single member of the 276 studio audience is perhaps one of the most iconic moments of television history. Millions across the globe watched on with envy at an extravagant giveaway the likes of which the world had never witnessed before?
But what was it about that moment that stood out? The sheer enormity of the riches being handed out of course. And it was extravagant even for the richest country in the world. Even when a mere 276 cars were handed out.
Consider this though. What if the Government of Pakistan were to replicate this giveaway in the country and give a free car to every single adult in the country? You are right of course. It would be impossible to arrange that amount of financial resources for any government. So how about a single city? Still impossible you say? How about a small section of a city? Say less than 100,000. Possible? How about if the Government also decides to pay for fuel for this small segment of the population? What would you say of such a scheme? Economic sense or folly of the highest order?
Here’s the punchline though. Such a project (or rather projects) already exist in Pakistan and that is the Metro Bus, the Orange Line and other mass transit projects developed under the last PML-N government. As an illustrative example, let’s examine the costs behind the Rawalpindi – Islamabad Metro Bus in detail to see how it compares with our hypothetical giveaway.
The Islamabad Metro Bus was constructed at a cost of approximately Rs 46 billion according to the figures released by the Government and was expected to provide transport to 150,000 commuters per day. However, even two years after the launch of the project, the average daily number of commuters stood at 80,000 only in 2016. These figures however consider one side travel only. If we were to assume that every person who used the Metro Bus to travel from home to his / her workplace or other destination also used it to travel back, that would mean an average of only 40,000 individuals traveled per day against a maximum capacity of 75,000 (150,000 divided by 2) individuals per day. These two figures are important because if we divide the total cost of the project by the number of individuals travelling per day, we arrive at the total cost of the investment per individual (assuming each passenger travels both sides) in the project.
- Project Development Cost per individual (if buses are used at full capacity): Rs 613,000 per passenger
- Project Development Cost per individual (using actual usage figures): Rs 1,150,000 per passenger
Coming back to our hypothetical car example, even if the Metro Bus Islamabad was operating at full capacity from day one, the development cost per individual comes to Rs 613,000 per passenger. The cost of a Mehran VX in 2014 was Rs 620,000. In other words it would have been just as cost effective to give a free car to each passenger.
What’s even more alarming is that if you take into account the actual usage figures, the cost per individual increases to Rs 1,150,000; Enough for each individual using the Metro Bus to comfortably afford a Suzuki Swift DLX which was available at a comparatively economical price of Rs 1,044,000 in 2o14.
Even more alarming is that these development costs are just the tip of the iceberg. The government also provided a subsidy of Rs 5 million per day on average over the first two years of its operation as the ticket price of Rs 20 was insufficient to meet running costs. Again, if we divide the cost of the subsidy with the number of individuals travelling, we arrive at the following figures:
- Subsidy for running costs (assuming buses are used at full capacity): Rs 67 per individual
- Subsidy for running costs (using actual figures): Rs 125 per individual
In other words, the Government could have provided a Suzuki Swift DLX to each of the individuals who use the Metro Bus regularly as well as providing Rs 125 for fuel and maintenance to each of them daily and still ended up saving money.
Other public transport projects built over the past five years do not fare much better either and in some cases even worse. The Lahore Metro Bus was built as a slightly lower cost of Rs 30 billion. The Orange Line on the other hand is projected to cost Rs 165 billion on completion with a capacity of 250,000 passengers and operational costs estimated to be Rs 175 per passenger according to Dr Farrukh Saleem as stated in his article in The News. All of these figures do not include the cost of land acquisition for the projects and other ancillary costs which total tens of billions of rupees. If these are taken into account, the actual development costs of all these projects may actually be almost double the figures reported by the government.
When the per passenger development and running cost of a mass transit service exceeds that of even luxury cars, it is safe to say that the projects have been a complete disaster. The true dilemma for the present and any future governments is that it ends up wasting the high investment on the project if these projects are shut down but risks them being a huge drain on the economic resources if the projects are kept operational. The PML-N made these projects the focal point of their last election campaign and it can be argued that the projects perhaps best represent their style of governance. Lots of fanfare but little or no substance.
Great article!
Shocking figures of course. Squandering exchequer is not new to us. We’re a banana republic where each successive looter fills its family’s coffers first and then delivers rubbish to us. Ignorant govts cannot be expected to have a national vision. It could be the unique circumstances surrounding the birth of the nation. In short, we are upstarts looking for personal gain. Every which way. Civilian or army. Disgusting.
Talking everything in monetary terms, but neglecting:
-Reduction in fuel burning through mass transit
-Immense reduction of hours and hours in traffic Jams
-Travel time impact, from 1-3 hours to 20-40 minutes
-Comfortable, affordable and dignified travel compared to the worst New Khan (people from Lahore knows)
-Whole city is interconnected now, through Speedo and Metro; in the next phase through Orange Line (Travel to any part of Lahore, in Just Rs. 20 + 5)
-Qualitative side is missing; how it hugely impacted poor and middle class girls and women from different walks of life – Completely safe and reasonable transport for females (Rs. 175 on two side, female use to pay 150 for one-side)
-Just imagine instead of 80,000, induction of only 40,000 of Suzuki and Mehran on the road. It will bring the whole city to a halt in peak hours.
Dozen more examples could be quoted here.
The argument and examples you quoted are valid but we can still not neglect the fact that we are a developing nation with a struggling economy and have a heavy burden of foreign debt. So we should admit that we cannot afford such luxuries right now because we are in dire need of basic necessities of life and as far as public transport is concerned even if a small portion of these billion of rupees spent on these projects were used for public transport it would be much better. Because the maintenance of these projects is another problem and now we are stuck in between that a lot of money is spent on these projects and we just cannot abandon them. Let’s be practical regarding our “so called development” because we need to see this.
Ok not great but atleast good work you have done to accumulate such figures, but there mostly stuff missing in this research, you were talking about the small segments of the city to give them a free car, it means you are ignoring the other peoples living in the city taking advantages from the metro and orange line, if the small segments such that 40000 cars appeared on roads amagine how appalling would be the road situations and would be jammed.
Furthermore, how much emissions would be released to environment if 40 to 80000 cars induced to roads instead of few buses..how much fuel demands will be increased in that city due to small segment of population and prices may hike ,if the roads become jam then government will reinvest further for building and development of new roads to overcome such trafic jam lacuna. Answer?
Thank you for your comment. Actually I’m not proposing that the govt hand out cars instead. I’m merely using such a ridiculous example as a comparison to show how costly the Metro Bus is and the dent it is causing to the taxpayers while providing public transport only to a small segment of the population. There are many alternative solutions out there which could provide transport to a much larger population at far lower costs. In particular, public private partnerships could play a huge role here.
Adeel Sb! First, you didn’t propose any solution in your blog. Second, you are just trying to prove that metro was just a show-off by a political government, putting burden on taxpayer. But criticizing civilian politicians, who invested on poor and middle-class, is indirectly benefitting everyone, including elite and the rich. Actually, you have totally ignored to include external costs such as downstream congestion, parking demand, traffic risk, barrier effects, and pollution emissions and all those costs that has been avoided by building mass transits. Third, you have tried to portray that it has been a failure in Pakistan, but you didn’t mentioned even once that in many countries, both developing and developed, governments are paying the same per person costs, by investing huge money on public transport in the form of mass transit systems. You are looking at the Rs. 175, but not ready to consider time cost on the roads (by others, thinking that the those are not part of the system), hours and hours and hours of traffic jams in Lahore, pollution, depression and anxiety among females and young; and do not forget elderly and disabled (who can’t drive). There was not a single mode except rickshaws for female students and ladies, that cost them Rs. 300-500 if someone come from Shahdara or Kahna to Lahore daily, now maximum Rs. 20+5. Fourth, just ask residents of Lahore; do they want PPP and New Khan again? or a respectable public transport, fully air conditioned, completely automated by PITB and subsidized by their government? And lastly, just dare to imagine a Lahore with SMOG and then without metros, orange lines, trams and Speedos. The dynamic city of Lahore would itself turn in to an internal combustion engine – a havoc for Lahorites. Let’s move forward, not backwards !!!
Rao Sb you seem to be arguing for a position that there can only be metro bus or no public transport at all. There are actually many public transport solutions available particularly if you look at Public Private Partnerships (PPPs). Just look at the motorway and you can see examples of how private sector have come up with feasible public transport solutions at little cost. Even within cities, private companies are coming up with innovative solutions. If a fraction of the cost of the metro bus were devoted to supporting these projects, we would have been able to provide public transport to a larger segment of the population. And speaking of Lahore. Of course they did be happy since they are sucking up 60% of the development budget of the entire province. How about we come up with more practical solutions that can be provided to other cities to and not just one or two cities?
Care to produce a similar report on BRT or would some magic analysis pop up to defend that project?
This project seems great to enhance the audiance.