Transport is the backbone of any economy. It is critical to identify challenges and issues in the sector much in advance (sometimes decades ahead) and plan for them. Broadly, transport has challenges relating to (a) hard infrastructure?roads, airports, ports, waterways and railway infra- structure?and (b) service quality and efficiency?shipping, airlines, bus, railway movement.
The huge investments in these segments have to be well managed in terms of maintenance of assets and quality and efficient of service. Since transport policies of a country can impact its long-term environmental sustainability, it is crucial that policies are made keeping in mind the interests of conflicting stakeholders and long-term environmental implications.
Indian transport industry faces all these challenges in a context that demands that transport sectors support the ambitious 8%-plus economic growth over the next decades.
Critical challenges: The most critical challenges in a growing economy are policy challenges, sectoral regulation, efficiency in investments and strict implementation of law.
We have a multitude of transport sector policies, formulated by various central and state agencies. But some of them differ in practice (for example, the airport ground handling policy is always in abeyance). In some other cases, the absence of a policy for too long leads to wrong practices (there is no policy, for example, for vehicle parking in any city). Very importantly, there is practically no policy that goes above a specific transport sub-sector and takes a holistic approach (for example, I have not seen any policy that says inland waterways should be encouraged over railways or that railways should be encouraged over roadways for environmental reasons.). It is important to have a whole-of-government approach (like they always do in Australia) on the sector.
We as a nation have accepted that the pure public sector dominance in the transport sector over the last six decades has failed, and have started believing that private sector solution through PPPs is worth going for. What we have not yet realised, despite supportive global evidence, that private sector performance is best only when it is thoroughly and independently regulated, keeping the ultimate user or citizen in mind. An unregulated private sector in the mostly monopolistic transport sector is more dangerous than an inefficient public sector.
Each sub-sector of transport is different and cannot be regulated through a set of common standards. We need separate regu- lators for each sector, as trying to come up with a single solution to multiple problems would not work. Multiple regulators will, of course, make it more difficult to look at inter-sectoral issues but that may be easier done than having a single regulator.
The next important challenge is efficiency of service. An efficient transport system leads to an efficient economy and improved competitiveness of its products and services in the world market. I see a reluctance amongst policy makers, administrators, transport industry players and manufacturing companies to accept that we have a hugely inefficient transport sector. The transport-mix is not right in many instances. The transport sector employs far too many people ?much more than efficient numbers. Transport vehicles are not at all energy efficient. Private transportation of people is alarmingly increasing. And there are hardly any policies and incentives that encourage transport efficiencies. Rather, in the name of equity and inclusive growth, subsidies are sometimes given to inefficient transport. We should replicate what we have done on energy efficiency?where we are seeing good, though early, results of having a dedicated Bureau of Energy Efficiency?in the transport sector.
Another important challenge is our extremely poor record in implementation. Here, the elementary step to follow is implementation of sectoral laws. We have several laws?some old but still relevant?that should work, provided their strict implementation is enforced. But that?s a long shot.
The writer is India leader for transportation and infrastructure practice, PwC