Among the few things that this pandemic has been good for, the highlighting of the value of public transport in our country should count as an important one. At the start of the pandemic, the utter horrors in the scramble of migrant workers to their hometowns and villages, as the railways and intercity bus services were shut down, showed that cities and villages are held together primarily by public transportation services. Now, seven months later, as city economies remain in drift mode even after relaxation of restrictions on businesses, it is apparent that no form of private transportation has the scale or reach to help bring cities back on their feet again.
Clearly, the value that public transportation adds to the economy is much more than the cost it takes to build and run it. I am no statistician, but let us consider that the lack of public transportation has contributed to 5% of the estimated GDP loss for this year [and I am certain that better qualified minds would peg that number significantly higher]. What this means is that for a single year, over 1 lakh crore rupees stands to be lost with our current public transport working at sub-optimal capacity. This amount itself is enough to fund over half of all of the metro rail networks ever built in this country!
If this is the value that public transport adds to our economy, why then do we expect public transportation systems to “make money” by themselves? To be planned considering their “financial return”? This notion that public transportation projects should show “financial feasibility” in the context of their own operations is massively flawed and this pandemic has exposed this very approach. To be clear, this does not mean that we may not evaluate what are the best options available to provide public transportation services within each context. Not every context requires capital-intensive developments like the Metro; often a good bus network will do. However, the argument that any form of public transport needs to show financial viability contained within its own lifecycle is something that we must move away from.
Public transportation may be classified as what economists call a Merit Good. A merit good is something that creates “positive externalities” – a spillover effect that arises when someone uses that good. Education and healthcare are two examples of merit goods. The benefits of having an educated and healthy populace are much more than the cost of running schools or hospitals, and the pandemic has again proven this fact. The case of public transport is not very different. A study [The Economic Impact of Public Transportation Investment – link : https://www.eesi.org/briefings/view/051514transit] in the US showed that every $1 invested in public transportation returns $5 to the community. The community, or the cities in our case are the “externalities” – the environment outside the immediate domain of a public transportation network or a project that derives benefit from an investment in it. It is therefore unfair and irrational to attempt to drive public transportation projects and institutions to “show financial viability”. Because by their very nature, they cannot. And they need not.
Another fallacy is the idea that if a public transportation system does not show profitability, it should at the very least not “bleed public money”. This is an argument often bandied around to point towards inefficiencies and graft that plague institutions such as public bus transport organisations across the country. Again, this is not to say that we need not be concerned about probity in the management of public finances. But that is a case that cuts across institutional setups regardless of their sector within this country. And administrative inefficiencies and corruption are not the sole reasons why public bus companies run into losses. For a private entity to provide the scale of reach and access that a good city bus network needs to provide is inevitably unviable, financially. But the benefits that it distributes across the economy are spread thin and often invisible for some form of “value capture” to be able to pin down.
A third aspect that is particularly laid bare during this pandemic is around a more nebulous concept – agglomeration. Very simply, agglomeration means more people, businesses and connections in the same place. So when we say that public transport brings people together, it does so in more ways than one. A good public transportation network enables proximity – where people are well-connected with each other despite being physically distanced. A portion of this proximity, we have seen, can be replicated online. But for the bulk of work and social interactions, it cannot. The benefits of agglomeration have been studied and quantified by several researchers. A study by Daniel Chatman of the University of California at Berkeley [https://www.bloomberg.com/news/articles/2013-08-14/public-transit-is-worth-way-more-to-a-city-than-you-might-think] showed a direct correlation between expansion of public transportation networks and economic growth of a region via agglomeration. The study showed that adding 4 seats of public transport per 1000 residents led to a related increase of employment by 19%. A 10 percent expansion in public transportation service within a metropolitan area pushed up the gross metropolitan product by between 1 and 2 percent. Other research as well such as the GLA Economics paper – Why Distance Doesn’t Die [https://www.london.gov.uk/sites/default/files/gla_migrate_files_destination/wp17_agglomeration.pdf] consistently shows a positive correlation between agglomeration and productivity. Without public transport, no agglomeration is possible – and with that, none of the associated efficiencies.
What all this suggests, is that when it comes to investing in public transport, governments need to loosen their purse strings some bit, and take a long view of the associated costs. Means of investment optimisation, cost recovery, taxation and innovative funding mechanisms may all be explored, to come up with solutions best suited to each context. However, all this may only happen against the backdrop of the understanding that as a Merit Good – a desirable good for our cities, the onus is not on a public transportation project to show returns by itself – wider benefits must be quantified and accounted for. Some of these benefits may not even be quantifiable. When tourists walk out of the airport at Mumbai and struggle to locate a taxi [only to end with being held up in traffic], compare the experience with Delhi where they can take a metro seamlessly into the heart of the city, there are adverse impacts that affect the image and stature of a city. There is a large, albeit invisible cost to that.
Three years ago, when the Indian government modified the Metro policy, making public-private partnerships mandatory for metro rail projects, the Father of the Indian metro, E. Sreedharan, predicted that our metro rail expansion would slow down to a halt. At that time, he drew a comparison between China opening 300 km of metro lines every year with India at a paltry 20-25 km. This gap would reflect exponentially in economic terms as the years go by and Indian cities would continue to miss out on the multiple benefits that quality public transportation brings. Sreedharan’s unheeded warnings would then be understood – perhaps a bit too late.
-Jude D’Souza
The author runs an architecture firm, JDAP Design – Architecture – Planning [www.jdap.in] and teaches at the Kamla Raheja Vidyanidhi Institute for Architecture and Environmental Studies, Mumbai [www.krvia.ac.in]
