Govt to offer financial support for Yangon PPP bus lines

Yangon Region government aims to overhaul the city’s chaotic bus lines by allowing companies to form public private partnerships. These new joint ventures will also be allowed to open petrol stations to help them stay profitable, Chief Minister U Phyo Min Thein (NLD) said.

The government set up the city’s first public-private joint venture last year to operate a service called BRT Lite. These air-conditioned buses only run along two routes, however, and reforms have barely scratched the surface of Yangon’s chaotic bus system, where more than 350 privately owned lines compete for passengers.

Drivers are paid according to how many people they pick up, whichencourages reckless driving as each bus races to overtake the competition, often in dilapidated and dirty vehicles. U Phyo Min Thein said the city’s public transport has deteriorated and needs to be upgraded with new buses and better-organised routes.

To achieve this, the government will encourage private companies to come together and form PPPs, he said. Addressing concerns by many bus line owners that such ventures would result in losses, he said that the government would help by awarding petrol distribution licences to PPPs.

“If the current bus lines become PPPs they will surely lose some profit,” he said. “At that time, we need to allocate profits across bus lines systematically. We also plan to support the bus companies by allowing them to open petrol stations and to distribute fuel as a subsidiary business, which can cover their losses.”

The current government has not yet awarded any new permits for private companies to open petrol stations, he said. In the past, fuel distribution licences were reserved for companies with the best connections.

The Yangon Region government is also preparing to improve the city’s streets, and hopes to make money for this through selling adverts at bus stops.

“If Yangon City Development Committee gives up its rights to the advertising sector we can upgrade the bus stops without using the state budget. We can run this operation through advertisements. To sustainably develop the PPP system the government must act as provider and investor where necessary so the companies can stand firmly,” he said.

Five companies have applied to invest through the PPP model, but still need permission from the Directorate of Investment and Company Administration, said U Maung Aung, secretary of the government’s Public Transportation Authority Group.

“We will give licences to public private joint ventures as much as we can, but some companies need to wait for permission from DICA. We hope that seven or eight PPP companies will want to start within this year, and we will also include bus lines operated by Ma Hta Tha,” he said, using the Myanmar acronym for the Yangon Region Supervisory Committee for Motor Vehicles.

Eventually the government plans to phase out privately run bus routes from the city centre, replacing them with PPP lines which will be coordinated by their joint “public” partner, the Public Transportation Authority Group.

Most private operators say they are keen to get involved in the scheme, which would offer them financial certainty. Once they have signed up, they will be encouraged to sell their old vehicles for use in other states and regions, and will be connected with local commercial banks to buy new buses under a hire-purchase scheme.

“If owners of existing bus lines want to be involved in PPPs they must change their buses,” said U Maung Aung. “In the past the government did not allow buses with Kha licence plates to be sold to other regions or states, but now this is allowed.”

Companies can put the money raised from selling their old buses toward buying new buses, and banks can provide the rest, he said.

“We have already discussed this with the banks. If bus owners can put up a K3 million or K4 million down payment, the banks can loan them the rest through instalments.”

All buses run under the PPP system must use a standardised ticketing system so the government can easily calculate how much it needs to invest in case one line is losing money, he added.

“Ten percent of Myanmar’s population is living in Yangon, which is our country’s main business town and an important place,” he said.

“Most foreign investment is concentrated in Yangon. If transportation charges are high, it will block the flow of capital. Most people are wasting time in traffic on Yangon’s roads, to the detriment of the entire country. Transportation in Yangon is a crucial problem to solve.”

Private bus owners who are unwilling or unable to join the PPP scheme will eventually find their routes limited to the city’s outskirts and away from main roads.

 

Source: Myanmar Times

 

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