NADICORP Holdings Bhd executive chairman Tan Sri Dr Mohd Nadzmi Mohd Salleh has called on the Government to reconsider allowing bus operators to gradually increase bus fares in order to cope with rising costs.
Along with the taxi fare hike in March last year, the Government had approved a fare increase of 22.6% for express buses but this was withdrawn before it could be implemented.
Citing some of our neighbouring countries which have allowed small increases over shorter periods of time, Nadzmi hopes the Government would increase fares gradually to support the industry.
The last express bus fare increase was in 2008. If express bus fares continue to be frozen, it will only be a matter of time before operators cut corners to stay afloat. Services will then be affected, compromising passenger safety. Operators will not be able to replace their aging fleet with new buses as financial institutions will not finance loss-making businesses.
But announcing just one fare increase is already a tall order for the Land Public Transport Commission (SPAD) as the public is likely to react with furore.
A more practical and long-term solution is to deregulate express bus fares altogether.
Some operators may immediately increase fares hoping for a rise in revenue, while others may get the same result from higher passenger load by maintaining or lowering fares.
Introducing real competition among the 260 operators can only make our express bus industry better. Passengers will also benefit when they have a choice of ultra-luxury coaches or no-frills buses.
SPAD needs only to ensure there are no monopolies or cartels for price fixing on any route. A central information board can display all fares for comparison at the bus station and online.
Express bus services should strictly be left to market forces with no control or subsidy on fares, fuel and operations.
On the other hand, stage buses must be regulated to ensure they run according to schedule as many of their routes are unprofitable but provide a much-needed public service.
To ensure that fares are affordable and services sustainable, subsidies given to stage bus companies ought to be continued, and increased if necessary.
As for express buses, their fares should be determined by demand and supply, similar to what is practised for excursion and factory buses over the past decades.
The deregulation of school bus fares from January 2015 was a masterstroke by SPAD. This can be reapplied for express buses in 2016.
