• Choosing between roads and railways



    (First of two parts)
    With traffic congestion now part and parcel of daily life, pundits and experts alike ponder what the situation would have been if the Philippines had persisted in building railways and tramways as programmed by the colonial government in the beginning of the 20th century. When the Americans arrived they already had a good inventory, taking stock of the existing population and towns, of a pretty comprehensive “camino real” network and even a few navigable waterways. Both forms of transportation were quite up to the minute in those days when Spain ruled over the Philippines.

    The British may have introduced the steam locomotive and railways to the world but Spain not remiss in bringing the same to the Philippines with the establishment of the Manila Rail Road Co. in Luzon. As foreseen, the railroad became the backbone of inter province freight and passenger transport. After World War II, however, there was a change of heart in the United States. Owing to previous decades being dominated by the railroad “robber barons”, Detroit, home of that mass-market self-propelled motor vehicle known as the automobile, lobbied for more roads. After the war, also, anything America did was aped and we thus found our government building more and more roads and neglecting the rails.

    Today, our urban areas are exploding into mega cities with population densities demanding high volume mass transit systems. While many of the developed world’s mature cities are well into their 3rd or 4th generation subways and commuter and light railways, we are still stuck with an ancient and unresponsive public transport system that relies on thousands of mom and pop owned public utility jeeps and buses. The addition of three mass transit rail lines in the past 30 years have not been enough to compensate for road building backlog, hence the reason for today’s overcrowded roads.

    DPWH vs. DOTr
    Our national highways, by an accident of bureaucratic evolution, are under the aegis of the Department of Public Works and Highways (DPWH) that gets a lion’s share of the budget.

    Railway systems, on the other hand are under Department of Transportation (DOTr). If one looks at the decline and limited coverage of rail the past 60 years, one will get the impression that the DoTr is the tortoise to the DPWH’s hare. To be fair, building a road or highway only needs the justification of providing a transport link between population centers while the population provides for the means (motor vehicles). Railways, whether for freight or passenger, have to be justified as to the feasibility of carrying a commercial minimum of passengers and freight. For a railway to work, providing the rails or tracks is useless unless someone provides for the locomotive and the coaches. Unlike roads, the concept of private motoring does not exist on rails.

    The Duterte government’s “Build Build Build” proposes to push high capital outlay railways to where these should be today if they hadn’t been neglected. For the near future, however, the DPWH’s insurmountable lead in terms of passenger and tonnage/kilometers over the DoTr will remain insurmountable and still very far from the European or Chinese ideal of near parity in carrying the overall national transport burden.

    The clamor now is to maximize what little road space we have and the agreed solution is to restrict the circulation of private vehicles and phasing out or transferring buses and jeeps to less congested routes in favor of a network of commuter railways and trams. But is our case a case of road vs. rail, either one or the other? Or is it just a matter of horses for courses, i.e. rail for mass transit and road for door-to-door?

    The individual vs. the community
    Let us first get absolutes out of the way. For sheer independence, freedom to travel, choice of company, and time and how, nothing beats private transport, which is dependent on roads. Roads literally take you door to door. But for sheer communal predictability, nothing beats rail because railways can only accommodate one train at a time in one direction. The sheer exclusivity of the track gives the rail operator the advantage and the power to dictate when, with who and how you travel. Rail works best when transferring large groups from one passenger collection point to another. Individual journeys to the “last mile home” are left to other forms of transport.

    All complementary so far but cost wise it is hard to beat rail. For a rail ticket, you don’t have to worry about car maintenance, garage, registration, fuel, insurance, driver (who may soon become redundant due to autonomous driving programs), navigation, road taxes and vehicle safety inspections on top of the purchase price. So what’s in favor of the private car? Privacy and independence. Yes, this freedom costs a lot.

    When your rail system reaches many destinations, works most of the day, is safe, secure, comfortable, fast, prompt and reliable – there is no incentive to drive anymore unless the freedom or the chore of doing so tempts you. The problem comes when the rail system is anything but all the above or worse, non-existent. Self-drive private transport becomes attractive and even necessary, like in our case as in many other emerging economies. In the absence of high capacity rail-based mass transit, private transport is more efficient time-wise.

    In terms of direct contribution to the national economy, hands down it is the private car that accounts for the lion’s share. Private car owners pay for registration and road tax. Duties and customs levies for parts and imported units. Taxes on fuel and insurance. Private car owners also pay for parking, bridge and highway tolls. Much of the taxes collected from private car owners pay for the roads on top of the investments that build-operate-transfer and public-private partnership participants and franchisees pay to build tollways. In the Philippines, the taxes from car making, car owning and car driving pay for the road building that benefits everyone. In fact, the taxes paid by the motorist and the motoring industry help pay for more than roads. These subsidize public transport, including railways. Hence the private car owner is a net contributor to the government’s treasury.

    Taken for a ride
    Look at the railway ticket holder in contrast. He or she just pays for the ticket. He or she never deals with the expenses and the operational expenses of a private car owner. Rail commuters are hardly taxed and in the Philippines, rail fares are far less than half of the operational expenses of the train line as fares are artificially held down by populist governments eager to cater to voters. Indeed, railways, almost without exception, lose money and would certainly close shop if not subsidized by the state. It actually means that the buck stops with you and the taxes you pay. Hence, cheap rail fares equals a huge subsidy paid by the government and funded by ever higher taxes on the wealth and income of corporations and individuals.

    Around the world, it is a truism that all rail networks lose money except those with a business model that relies on peripheral business to gain revenue. The only rail networks that don’t lose money and don’t siphon off taxes via government subsidy are mostly in China, Hong Kong and Japan. Why and now? Profitable rail companies like Japan’s JR East (East Japan Railway Co.) and Hong Kong’s MTR (Mass Transit Railway) get their main revenue from leasing their real estate assets, like their city center train stations, to high-paying lessees. But without the windfall from property sales/lease, railways will always lose money.

    To be continued

    Tito F. Hermoso is Autoindustriya’s INSIDE MAN
    Send comments to tfhermoso@yahoo.com


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