In the series webinars Busworld Academy organizes about the impact of Covid-19, in the third webinar held on 30 April, five executive speakers shared their experiences and insights, and try to answer the burning “After Covid-19” questions. Hygienic measures, social distancing and capacity are the topics CEO's of public transport companies and politicians around the world are very much concerned about. This third webinar was visited by 930 bus and coach professionals. (PART 2)
From the same location as he took part in the first Busworld Academy webinar, his bedroom, Prasana Patwardhan, President BOCI in India, adressed the attendees about the situation in India. There is still a complete lock down which means almost no bus operations. Only 3% of the vehicles is running. India has around 1.7 million buses from which 1,5 million are privately operated. Most of the private operators are small businesses, around 20,000. “Public operators are in losses, and the private operators are barely surviving because there is no funding. Ticket rates are very, very low and set by the government. Because of political interference they have not been changed for years now. On the other hand taxation is high on especially intercity routes and up to 79.5% of your revenues. This is interstate traffic and every state has it own rules and regulations. In a normal situation these operators are surviving because of “overloading”. On a city bus there are for instance 32 seats and room for 18 people standing, but we carry up to a hundred people. So now with capacity down because of Covid-19 surviving is almost impossible.”
He says because of this complete lock down the number of people contaminated with Covid-19 is not as high as elsewhere in the world. “But a future problem of the lockdown is that many drivers and other employees have gone back to their home villages were their families very often have a farm far away from the cities. In June the monsoon starts and then it will be a serious challenge to get al those people back to work again.”
Finances and social distancing
Patwardhan says until now the Indian government has not come up with any aid schemes, but he is hopeful that this will be announced soon. “A problem is that the central government has money were the state governments and local bodies do not. Also banks are not willing to lend money and they are very selective in choosing clients.” For the future the same as elsewhere in the world applies to India that social distancing is a major problem for the capacity. He sees it coming down to at least half and thus also the revenues. “Private operators will not be able to operate city bus services, for intercity services there will be possibilities to some extend. When this service fails people will make more and more use of their own cars with congestion as a result. When bus companies do not have any income they also can not buy new buses. The solution is immediate funding lasting for at least one to two years. For India the solution lies at the central government with help for instance from the Worldbank. For intercity services lowering taxation is also a solution to help companies to survive. For transport of employees and schoolchildren the million dollar question is now if they are willing to pay more because of a lower capacity while the costs are rising.” He made an appeal to world organizations. “We have the Covid-19 pandemic under control because of the severe lock down but if we at the same time have to take care of our environment, helping public transport is important. If this collapses it will give a chaotic situation for the entire world.”
Patwardhan's appeal was not a coincidence because Rakhi Basu from the Worldbank joined the webinar to elaborate about these possibilities. The Worldbank is a funding agency founded in 1944 with as purpose to rebuild European countries after World War II. Now it has as its mission “A commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development”. According to Basu in order to fight Covid-19 the Worldbank group has approved 14 billion US-dollar funding from which 6 billion dollar will be spend on setting up health care facilities and related services. “We expect to see more requests from other sectors with transport as one of the key areas. Bus operation is the primary mode of transport in our client-countries. We see a rapid move to contactless ticketing instead of using paper tickets paid with cash money. In Jakarta for instance they are moving to use a QR-code and PT Trans in Jakarta will implement a non-cash system at all their bus stops to prevent transmission of Covid-19. And exceptional, in Kenya the matatu operators are going to accept payment through the money transfer service “Mpesa”. This destroys a long standing myth that informal transport and cash go hand in hand.”
She foresees a change in bus building in terms of separating the driver and ticketsellers form passengers but also in infrastructure. “Like at crowded bus stops such as in India, one has to think about urban planning including dedicated spaces for queuing. Digitization and connectivity will be key in moving to seamless mobility. For us and policy makers we see a lot of costs coming post-covid and we need to think about how to maintain public transport profitable.”
Public and private
Basu says the Worldbank is extending its low costs financing loans to countries. These loans are long term, 20 to 25 years with low interest rates and can be given to any sector. “We work demand-driven. Countries come to us for a loan for a specific sector. We work together with the national Ministries of Finance in order to scope out the project for which the loan is requested. Once this is done and approved, the loan goes to the Ministry of Finance, which lend it to the applicant sector.” She emphasizes that there is also the possibility for loans for policy changing in for instance public transport. Most of the lending by the Worldbank is focussed on the public sector but there is the possibility for the private sector to acquire a loan. “There are credit lines and guarantees to support private sector lending. The route is then that the Worldbank money still goes to the Ministry of Finance and is distributed to selected participating financial institutions who will co-finance it including equity participation and lend it to the private sector. Another instrument is “Partial risk sharing facility”, which we have used a lot in the energy sector. This can be suitable for the transport sector. The government creates additional liquidity for the private sector as a minimum revenue guarantee back stopped by a letter of credit from the Worldbank. Also credit lines can be set up for banks.”
The Worldbank has five divisions among them “The International Finance Corporation”, which is especially suited for private companies and works directly with the client through local offices. But also for small private businesses she advices to contact the national Ministry of Transport or Finance, make a programme of proposal based upon which the government can approach the Worldbank. Asked by Jan Deman of Busworld Academy she emphasizes there can and will be an important role for instance trade organizations.
This article is a transcript of the second part of the webinar.