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Public Transport System (Philippines) Post covid19

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Public Transport System (Philippines) Post covid19

  1. 1. Public Transportation System, Post Covid-19 Anticipating (or Re-Imagining) the Future of Public Transport Beyond 2021 5th Ergonomics Convention UP Industrial Engineering Club 29-January 2021 Rene S. Santiago President/Bellwether Advisory Inc
  2. 2. Outline of Presentation 1. Definition on what is PT? 2. Rear view mirror: The Way We Were 3. The Big Change of 2020  What has it wrought?  What government is doing? 4. Public Transport Beyond 2021  Donut Approach, in lieu of crystal ball gazing 5. Questions 1
  3. 3. 1 Introduction In Developed Countries: Public Transportation is equated with buses and rail transit (LRT, HRT, Monorail, HSR). In the PHILIPPINES: Public Transportation refers to all transport modes for-hire, available to the general public, who pays for the service. Includes MCs, tricycles, taxis, jeepneys, vans-for-hire, buses, LRT, PNR, MRT, shipping lines, airlines 1
  4. 4. Public Transport b4 WW2 “You have to look at the past to understand the present” – Carl Sagan “If you want to know the future, look at the past” - Albert Einstein 2
  5. 5. From the Wreckage . . . emerged Left-over US Army Jeeps were converted into Auto Calesas; that grew into the Jeepneys of today Similar mode of public transport (referred to as paratransit, by Western eyes) emerged in other developing countries, with their own local names
  6. 6. A mode virtually unchanged in 70+ years Jeepney 1950s Jeepney 1970s Jeepney 2020 Unwittingly, Government was (is) the main culprit for the TIME WARP 2
  7. 7. Buses . . . on the other hand 1950-60s (Tartanilla) 1970 -90s (Love Bus) From Ergonomic standpoint: Buses became more accommodating to taller Filipinos. Egress/Ingress More Efficient. More comfortable ride. Major change triggered by a government adoption of Bus Standards in late 1970s 2 Buses 2000s - present
  8. 8. State of PT by 2019  All transport providers (airlines, shipping, buses, jeepneys, vans, taxis, tricycles) are owned, operated, and maintained by private entities  Government subsidy is zero, or very little (fuel discounts, opaque taxation)  Public sector is still heavily involved in railways  Entry (supply) is controlled by government, state-prescribed tariff  Routes driven by private operators, or applicants  Intrinsically de-regulated regime pretending to be heavily-regulated or rational (able to match supply vs demand)  Low fare is the primary goal of regulator  Service providers on land are fragmented, dominated by small Mom & Pop operators. Few big operators, only in buses  Contracted labor thru a mis-named ‘boundary’ system  Two exogenous factors driving viability: fuel cost and road traffic  Tricycles is the dominant mode in majority of 1,600+ towns in the country  It blossoms after 1990s, when franchising got devolved under the Local Government Code 2
  9. 9.  PT in Time of Covid Demand & Supply Suppressed  Many employees constrained to WFH  ALL schools ordered close  PT suspended operations, re-starts rationed
  10. 10. Constraint in Transport Supply Double whammy @50% capacity limit + # @50% = 25% supply 3
  11. 11. Suppression of Mobility  BC:  PT share ~13M trips/day  ECQ:  PT share = 0  GCQ:  PT share = ? (Hint: <6M) In NCR, PT comprise Rail, Bus, Jeepney, & Tricycle. In other urban centers, jeepneys and tricycles 3
  12. 12.  Public Transport A.C. It would either be better, or worse, than before the pandemic. But it won’t go back ex ante. Changes take decades to play out in transportation. There are uncertainties, whose denouement may alter the trajectories (or size of the donut) “The KNOWNS” (Things of Which We are Certain) “The UNKNOWNS” “Uncertainties”
  13. 13. Covid’s lingering effect: Risk Aversion vs PT No similar survey in PHI, but likely to yield similar tendencies . . . Decline in demand . . . Extent of decline unknown Government Warnings: Traveling on Public Transport is very risky 4
  14. 14. Trip Size & Mix will change How many school- related trip/day will remain? After Covid (AC): Blended Learning & Working will stay for some TRIP PURPOSE (BC) What would be the reduction in Work+Biz Trips? Will central HQ split into several decentralized work hubs? 4
  15. 15. Clear signs in a murky future  Adoption of Digital technologies has accelerated  Will E-payments become SOP on jeepneys?  Capacity of public sector to induce and manage reforms/change is weak  Right direction, but early fumbles are not encouraging  Transforming the jeepney is biggest challenge  Covid-19 has not killed traffic congestion in MMA & other urban centers  2-decades backlogs in infrastructure developments  Sweet Spot in Traffic, next 3 years (completion of several projects+ depressed demand)  The world is going green (EVs)  The Philippines is a bystander, not a hitchhiker 4
  16. 16. 4th in the World in Worst Traffic (2020) Source: World Economic Forum
  17. 17. Tricycles on same, same, path Tricycles is the current face of public transport in many LGUs (1,488 municipalities and 142 cities) in the Philippines. <10,000 in 1990 to > 4.5 million in 2019 4
  18. 18. No fork on the road for Railways, also Undercut ridership of buses on Route #4 MRT-7 From SJdM to Trinoma (22-km, 14 stations)  Undercut the improvised EDSA Busway Completion of MRT-3 Rehab (Back to 2010 train capacity)  Improve viability of PITX in Paranaque LRT-1 Extension To Bacoor/Cavite(12- km, 8 stations)  More Trains on PNR South Commuter Rail (Alabang & Sta Rosa)  Undercut ridership on Buses on Route#14 4
  19. 19. Gov’t-ordered changes, ala King Canute Industry consolidation was being pushed before 2020  PUVM directive (DoTr-DILG Circular 19-June-2017)  LTFRB Memo Circular 2020-019 14-May 2020  Conventional organizational solution (i.e., merger) Route re-structuring for urban buses and jeepneys was on the table before Covid (per 19-June 2018 order)  Rolled out for all MMMA buses, beginning April 2020  Implemented, salami-style, for jeepneys in MMA  On EDSA, exclusive busway on median was implemented  Defied best-practices on establishing a BRT system  Service contracting: a radical change in 2020  Life-support system to the chosen ones  Government assumed the operator role, absorbed market risks 4
  20. 20. Is PUVM (the gov’t program) getting traction?  ? ? ? ? Sector was Crippled during the Pandemic Can it bounce back stronger? (PUVM = Public Utility Vehicle Modernization Program) 4
  21. 21. Change has come to Buses, again  Situation before:  ~10,000 buses on 90 routes  ~600+ in NCR, of which ~175 on EDSA  The desired New Order:  31 routes  ≤31 operators  5,000 buses 4 EDSA Carousel
  22. 22. Drastic Change on EDSA Buses  Two inner lanes of EDSA were made exclusively for buses  Concrete barriers were erected  At-grade crossings closed (e.g., U-Turn slots north EDSA (from North Ave to Monumento)  Number of buses reduced (from ~4,000 to 500+)
  23. 23. Danger signs ahead on Bus Reform 4  One Company for one route is fine, but  Isn’t 31 one too many?  Closer examination of routes point to 10 franchise areas  Bus Consolidation happened in late 1970s, junked after 10 years. Will the new program repeat the past?  Who gets the franchise?  Merge first, but is there a deadline?  Multiple operators have been greenlighted during the pandemic  Provincial bus company (e.g., Philtranco) allowed in urban operations  Integrated operations (e.g., unified dispatching, revenue pooling) is the objective  New technology (analogous to Uber, Grab) makes integration possible, without Corporate merger, but is avoided
  24. 24. Glacial Change for Jeepneys In MMA: 600+ routes 50,000 operators? Phils: ~200,000 units  Shift to mini-bus ordained in June 2017  LGUs required to prepare their new route plans  DoTr to take care of NCR, but plans got delayed  Deadline for conversion is 2021, re- set to 2022? 4 Step Wise Protocol Mandated by LTFRB
  25. 25. Red Flag #1 : Doubtful Financial Viability  A new PUV cost Php2.0M or higher (vs Php0.3M for existing)  Daily amortization for a loan (@6% interest, 7 years to pay) = Php1,169. Operators’ hard choice: 1) forego their daily income (Boundary Fee ~Php1,000); and 2) get into debt with its attendant risk.  Government claims that new PUV would gross Php6,605 (vs Php2,525 for old), or 2.6 times, can only happen if 2 old PUVs are replaced by 1 new PUV on the same route.  Thus, 50% of existing operators must yield the market for the others to become viable  The 50% limit on capacity (ascribed to Covid restrictions) equates to 50% (at least) reduction in gross revenues  Drivers barely eke out a living @100% load, impossible @50%  LTFRB refuse to adjust fares, before and during Covid, for the old or new PUVs 4
  26. 26. Red Flag#2 : Old-fashioned Merger is Messy  Government prescription: operators on a route must form into a cooperative. Franchisee must have a minimum 15 units  Coop do not self-form, but no organizer/convenor with venture capital on the ground  More routes have more than 15 units/operators (e.g., PUVs on Consolacion-Mandaue-Cebu City routes >800)  High risk for banks to lend to newly-formed Coop with no asset, no track record  The early birds of PUVM are corporates, masquerading as Coops  Entry is overlaid to existing routes, not to new/consolidated routes 4
  27. 27. Red Flag #3 : What happened to Connectivity?  Missing element in the bus & route re-design plans  Attention to transfer points, for commuting comfort and convenience  Details on turnaround (where a route ends and go back) path for every route  Integration in terms of seamless transfers  A fare policy that removes cost-penalty of every transfer in a journey  Rail, bus and jeepney services should be complementary; synergistic and not zero-sum  EDSA Busway is exhibit A for myopia  Transfers from other buses more difficult and riskier  Competes directly with MRT-3, with co-use of stations 4
  28. 28. The Joker in the Horizon  Service Contracting Scheme: Temporary or Permanent?  Conversion from jeepneys to mini- buses: speed up, slow down, or trip over?  Fate of displaced PUJ/PUB drivers: Shortage or Surplus?  Covid-19 : Will it end in 2021 or extend? 4
  29. 29. Source: https://asiatimes.com/2020/10/pandemic-pushes-se-asia-back-into-poverty//
  30. 30. Singapore’s Education Minister: Pandemic could last 4 to 5 years Source: Channel News Asia (25-Jan 2021)
  31. 31. In Sum: Two contrasting futures of PT A public transport system will emerge stronger, fitter, better out of the pandemic A transport sector bowed by Covid, but unbroken, crawling back to health despite a bad driver 2SF1SB [2Steps Forward, 1-Step Back] 1SF2SB [1-Step Forward, 2-Steps Back) 4
  32. 32. Thank You for making me a part of your workshops renesan@outlook.ph 5 “Our anxiety does not come from thinking about the future, but from wanting to control it.” - Kahlil Gibran