?Striving for Stability in Fiji?s Bus Industry?

SPEECH TO THE?FIJI BUS OPERATORS ASSOCIATION?2014 ANNUAL CONVENTION?

Novotel House, Lami,?10 May 2014?

ADDRESS by Mr Viren Kewal,?President, FBOA?

The Chief Guest, Honourable Aiyaz Sayed-Khaiyum,?Our major sponsor TOTAL (Fiji) Limited managing director Sylvain Quemener.

Just before I begin I would like, on the behalf of the FBOA, to extend our heartfelt condolences to the families of the woman and her mother who were involved in a fatal accident at the Suva Bus Station on Tuesday.

This is also an opportune time to look again at the state of the Suva Bus Station and reconsider the traffic flow in which buses are expected to reverse out of their bays to leave the station ? perhaps one of the only kind in the world. We hope this matter can be addressed with urgency.

INTRODUCTION

I am honoured to be delivering my first annual address since becoming President of the Fiji Bus Operators Association last year. The past year has been one of both great development and great challenges for Fiji?s bus industry. While we can say that on the whole the industry has come through the road humps relatively less harmed, it is vitally important that a sense of security is brought back to the industry and those that rely on us can continue to provide what has been described as a globally unique service to Fiji.

Everybody involved in or in contact with the industry agrees that the transport sector is vital for Fiji economic and social interests. The Reserve Bank estimates that the transport sector contributes between 6 and 12 per cent of GDP and land transport accounts for 15.5 per cent of all activity in the transport and storage sector.

Our theme at this year?s convention reflects what we see as the precarious state of the bus industry, which even as we progress is also hampered by uncertainty over policies, decision-making and direction.

In the milestone 2009 Orion Report that looked into the bus industry, it was acknowledged that our industry was quite unique by global standards. In Fiji the public transport system is run wholly by private individuals who are bound by government regulations and expected to meet the high demand for a modernised, efficient, affordable and safe transportation service.

The bus transport industry operates like a partnership of four keys stakeholders:

  • The government, which is the policy maker;
  • The Land Transport Authority, which is the regulatory body;
  • The permit holder, who facilities the transport services;
  • And the travelling public, who are the consumers.?

Each of the four stakeholders have an important role to perform without which the public transport industry in Fiji would not function as it does today with minimal costs to the government. It is vital therefore that all stakeholders maintain close consultation and cooperation with each other to ensure that this unique not only survives but thrives in Fiji.

Today, I will touch on a few of the issues I believe are contributing to some of the uncertainty that face the entire industry.?

THE 2009 ORION REPORT

Many of the issues I will touch on today have already been examined and addressed in the Orion Report of 2009. ?The consultants in their wide and long experience of the bus industries of many countries both developing and developed, found that Fiji?s bus industry ?provides one of the best examples of effective bus services anywhere.?

The consultants noted that they were not aware of any country of comparable GDP that has such affordable, frequent and reliable bus services in both rural and urban areas. The Orion Report gave testimony to the excellent bus service in Fiji.

Their report said that 95 per cent of Fiji?s people have easy access to reliable and cheap bus service, which is remarkable for a country with a significant rural population. It further stated that based on prices overall, its safety record, dependability and predictable service, comprehensive routing in urban and rural areas with low cost to the public the industry was something that the government and the people of Fiji should appreciate and value.

The Orion Report outlined some several recommendations after a broad study on the state of the industry in the:

  • Legal and regulatory framework areas;
  • Financial issues, concessions and fares;
  • Inefficiencies in the industry; and,
  • Future directions for the bus industry.?

The Orion Report is a good starting point for revamping the industry and creating a mutually beneficial relationship for all stakeholders and we urge the government to seriously consider completing its implementation.

RELATIONSHIP WITH LAND TRANSPORT AUTHORITY

Perhaps the most contact bus operators have with any regulatory authority is with the Land Transport Authority. It is no secret that we have outstanding issues we would like the Authority to act on, however, we nevertheless have maintained a mutual working relationship through all the challenges.

We understand the LTA?s responsibility as the regulator to do what is best in the interest of industry but that responsibility should be tempered with a spirit of dialogue and information-sharing. It is in the best interest of all stakeholders that we work together rather than in isolation. Ultimately it is the public that are deprived of better services when each of us work on our own issues separately.

We are serious about our partnership as stakeholders, which is the spirit in which the following points should be taken.

Quality Assurance Maintenance System (QAMS)

The FBOA has always maintained its broad support for the LTA-inspired Quality Assurance Maintenance System or QAMS. The industry welcomes QAMS but as always believes it should be rolled out in phases to help the industry adjust without the shocks that could unsettle vulnerable bus companies.

For example, the LTA has proposed that the revocation age of buses should be 25 years and they suggest they will not issue fitness certificates to buses older than that. The Authority has proposed that a number of buses across Fiji must be phased out. This is grossly unreasonable and will affect many buses that may be older than 25 years yet perfectly fit for service because of careful maintenance over the years. The LTA should exercise its discretion in this regard rather than insist on a cut-off age.

A most interesting point is that the Prime Minister himself has entrusted the collection of signatures from around Fiji for his proposed party to a 40-year-old bus, which ? and here I fully declare my interest ? he has hired from my company. The Leyland bus that is providing services for the Prime Minister?s political efforts may be four decades old, but it has been maintained to such a standard as to continue to be fit for its purpose.

Section 66 of the LTA Act

Another area that is of concern to members of the Fiji Bus Operators Association is what we view as the abuse of Section 66 of the LTA Act. The LTA has continued to persistently misinterpret this section. Under Section 66 permits can only be given for a period of three months and where there has been a sudden need in a particular area because of some emergency.

If there is such a need then the bus operators in that particular area must first be called for a meeting by the Authority to decide who should operate bus services in the area on a temporary basis until applications by bus operators in the area is received and heard by the Board.

In previous years, it has been the Authority?s Board who have been solely tasked with considering applications under Section 66. However, in recent years applications under this section have been taken on by the LTA?s management and this has contributed to uncertainly over how Section 66 applications should be dealt with.

We request that the LTA management refrain from issuing any further Section 66 permits and that this power reverts to the board to exercise solely.

Rural hub and spoke model

The Orion Report of 2009 had among its many useful discussions, an examination of the rural transport needs of our community. Because of the distance, poor roads and uneconomical loads, our rural communities sometimes do not get the service they deserve.

The current system is to run bus services from individual villages and communities directly between the rural location and the main town. And this usually involves one or two services in the morning, followed by another one or two in the evening.

This type of service does little to stimulate rural growth and rural interaction because of the infrequent and inconvenient services. This is where Orion?s hub and spoke system will help overcome the transport problems of rural communities.

The hub and spoke system would involve the development of carefully located rural bus hubs ? at Vunidawa for example ? with frequent standard bus services on the main roads between the rural hub and town. There would also be regular feeder services on the smaller roads between the villages and the rural hubs, timetabled to link in with the main road services.

These feeder services might use smaller vehicles, perhaps well-designed ?carrier? services, and here again the economic benefits could be spread by utilising the current vans and carriers that operate, sometimes illegally, on standard bus routes.

Recently the Land Transport Authority called for an expression of interest for rural services into Suva. It is questionable that many of those living in these areas would frequently want to travel into Suva. Rural people usually just want to get to the nearest town, do what they need to do and return unless there is a specific need to go to the city.

The LTA has already issued numerous Rural Service Licences for services from rural areas to the point of a bus service. But what is happening now is that many of these RSL permit holders have abandoned the rural people they were to have served and are crowding out the Suva-Nausori corridor.

What the LTA is proposing will create more congestion and yet more problems for all of us. Ultimately, what will happen is bus operators will slowly begin to ignore the rural routes because of what they consider unfair competition and in the end it will be the rural dwellers who would suffer.

The transport industry has the potential to spread economic benefits around and the Orion Report explained how this could happen while keeping the bus industry viable, and meeting the needs of the public. We urge the LTA to take the Orion approach that is quite well explained in their report rather than acting in an ad hoc manner that risks bleeding the industry to death.

E-TICKETING

The introduction of e-ticketing has been a milestone development in the bus industry in recent years. All operators who are using the e-ticketing system have witnessed first-hand the benefits of such a system. It helps address many of the issues of transparency and accountability that government has demanded the industry clear up.

We would like to extend to our chief guest, Mr Attorney-General, Aiyaz Sayed-Khaiyum, our thanks for finally gazetting the Omnibus Minimum Standards Regulation that spells out the legal framework governing the e-ticketing system.

We believe the e-ticketing system should be given all the help it can to catch on among the public in Fiji and succeed. One way this can happen is to immediately move the Ministry of Education?s bus fare assistance scheme to the e-ticketing system.

This move will reduce the administrative burden on the ministry?s staff, and reduce fraud among all parties involved ? ministry officials, bus company employees and students and school officials themselves ? as recent cases that have come to light illustrate.

And in order for the e-ticketing scheme to gain wide acceptance across the country, getting our children familiar with it will mean they will continue to use it in their daily lives even after they have left school.

INVESTMENT IN THE BUS INDUSTRY

In the past five years, we have seen the great lengths the industry has gone to in modernising and revamping its fleets. Both locally built buses and imported ones are an increasingly new feature on our roads and the importation of new buses in particular has increased dramatically over the past five years.

Since, the government?s reduction of import duties for new buses in 2010, the industry has taken it upon itself to upgrade fleets in a big way. In 2010, five new buses were imported valued at $1.67 million. In 2011, 49 buses were imported with a total value of $5.43 million. In 2012, it had increased to 60 new buses with a value of $6.6m. Last year this number would no doubt have increased even further, because by the day of our convention last May, 23 new buses had already been imported, almost double the number of that in 2011.

Our roads are now increasingly being graced by beautiful, robust buses the public enjoy using. Many of our long-haul services now offer fully air-conditioned services, audio-visual entertainment and free WIFI on board.

And for development to keep pace with consumer and regulatory demands, the sense of stability and security in the industry must be restored.

CONCLUSION

In conclusion I reiterate the importance and value of the 2009 Orion Report. It was one that was funded by taxpayers and yielded several recommendations, which the bus industry has embraced. The consultants for that report acknowledged that at the time there were many reasons to be worried about the industry, which it described as ?really facing a crisis?.

I quote: ?In the absence of good policy decisions and a clear and timely strategy, the bus industry could enter a downward spiral which would not be in the best interests of the Government and people in Fiji.? Unquote.

However, it was not all doom and gloom, the Orion Report concluded. It also acknowledged that the industry had survived and developed over the years thanks to the good offices and actions of the bus companies, the government, the regulators and the passengers.

The report called for ?an understanding that all parties will have to contribute towards the survival, sustainability and modernisation of the bus industry.?

The consultants made some very straightforward conclusions:

  • In exchange for subsidies the operators have to reduce fraud;
  • In exchange for profits, the operators have to renew their fleets;
  • In exchange for a bus industry providing affordable public transport services, the government has to maintain the roads;
  • In exchange for an efficient, timetabled and easily regulated bus industry, LTA must protect buses from the illegal operations of minibuses and carriers;
  • In exchange for assistance for loss making routes, operators must declare transparent ticket returns and move to competitive tendering;
  • In exchange for a good, modern bus service, passengers must accept a small fare increase and actively encourage fraud prevention and the implementation of modern ticketing (including ?saver? options).?

Almost five years since that report came out, as you can see, many of those conclusions have been implemented by the industry and government has carried out some of the end of its bargain. However, there remain some niggling issues that continue to tip the scales against operators and that urgently require addressing if we are to remain the unique industry that we are.

Ladies and gentleman, with these words I commend to you this convention.

God bless the bus industry and God bless Fiji.

/ENDS/