Given that the Indian economy is moving towards a more liberal regime based on market considerations, the challenges facing the transport sector are, in many ways, different from those in the past. The need to ensure seamless movement and at the same time ensuring that basic accessibility concerns are met provide the basis to examine the complex issues involved.
This is especially so in the context of the growing importance of public-private partnerships in the core transport sector. An emerging view relating to this is that, the experience gained until now needs to be understood better. While hardcore infrastructure facilities, which involve substantial sunk costs, would have to be necessarily provided by states, services emanating on these could be taken care of by the private sector. However, it is important to prioritise projects by way of their economic returns to identify those that the State should take up, while those financially viable or near viable situations could be promoted with the help of the private sector without any delay.
In the case of competition issues in transport, the regulatory framework in terms of the various elements such as inter-state barriers and enforcement systems does seem to be inadequate since current provisions reduce the competitiveness of goods at the national as well as international levels. For goods transport operators, these barriers, especially at state borders, have led to poor utilisation of vehicle capacity. With the opening of the air transport sector, the possibility of consolidation of air operators is a threat from the point of view of monopolistic elements creeping in. With the Competition Act in place, it is felt that there are enough elements in the Act to take care of these potential dangers.
Issues relating to the urban transport scenario, especially, in the megapolises, are of concern to urban specialists, given the current scenario and the inadequate efforts to upgrade different systems. Simple solutions such as better utilisation of road capacity, effective implementation of regulatory procedures relating to registration of vehicles, licensing of drivers and parking rules are some of the initiatives being proposed. The expansion of facilities in terms of roads upgrade, newer rakes on the suburban railway system and construction of the Metro Rail in the Mumbai context and in other cities is expected to handle additional requirements, though not so significantly. However, it is strongly felt that some urgent demand management measures need to be in place in our cities as quickly as possible if the situation is not to spin out of control.
In the context of maritime transport, serious concerns are being raised about the inadequacy of reforms as well as tardy implementation of procedures at the ground level at ports and those related to shipping. Given this approach so far, it is feared that Indias trade position would not improve despite the fact that we are otherwise competitive. Equally important is the issue of improved synergy with the land modes which connect the ports to the interiors.
More effective governance of the different modes of transport is a basic challenge that needs to be resolved. More specifically, while it is being increasingly felt that efficiency norms require to be taken into account for the purpose of accountability, the need for an integrated view of transport facilities and services at all levels as an aspect of governance is necessarily to be taken seriously if sub-optimal use of facilities is to be avoided. The constitution of an urban mass transit authority would be a step in the right direction.
Many of thee issues were at the core of the discussions at a recent international conference on transportation system studies organised by the Walchand Hirachand Unit in Transport Economics at the University of Mumbai earlier this month. A view which has evolved is that, in each of the transport modes, there are specific challenges that need attention. On the Indian railways, a major one is the limitation on capacities, which are likely to be reached soon in the absence of fresh investments. Deregulation of the passenger road transport system would increase effective competition as a result of which services were bound to improve, as was the case in many countries, developed and developing. In the context of air transport, there is a need for transparency as well as a long-range policy framework to take into account the rapid changes taking place in the industry and the economy.
The writer is Walchand Hirachand professor of transport economics, department of economics, University of Mumbai. These are his personal views