By P. Selvarani
Thousands of commuters in several states were left stranded recently when several stage bus operators halted services, citing financial losses. Pan-Malaysian Bus Operators Association president Datuk Dr Mohamad Ashfar Ali tells P. Selvarani why this happened
Datuk Dr Mohamad Ashfar Ali
How challenging is the situation for stage bus operators now?
Answer: We are in such a bad state. Right now, we are at the point of closing shop because we have been neglected for so long.
So many of our members have given up. Some have closed shop, others have cut down services or are trying to regroup. Many big companies, such as Foh Hup (which serviced the Kuala Lumpur-Kajang-Seremban route), United North Malaya Transport Company (northern Perak), Chin Wah Omnibus (Port Dickson), Eng Giap (Tampin-Bahau-Kuala Pilah), Lian Hoe (Muar-Batu Pahat) and Len Omnibus (KL-Rawang-Tanjung Malim) and Penang Yellow Bus (Penang island), have closed down.
Only the major players are still in the market now. The situation is the same in Sabah and Sarawak.
Question: What caused the situation?
Answer: Many factors. The main cause being the decision to move the Commercial Vehicle Licensing Board (CVLB), which was then under the Transport Ministry, to the Public Enterprise Ministry (now the Entrepreneur and Cooperative Development Ministry).
They subsequently revamped the CVLB with the passing of the Commercial Vehicle Licensing Board Act 1987.
One of the functions of the ministry was to establish entrepreneurs and one of the ways to do this was to give out (bus) licences. It was a political decision as the government wanted to encourage more Bumiputera participation in the transport industry.
This was done without regard to the consequences of issuing too many licences.
This was the beginning of the fall of stage bus operators.
Question: How did this affect the industry players at that time?
Answer: Before this (under CVLB), the procedure was to call the new applicant for an interview and invite existing operators to give their views. We could object (if we felt it would affect our business) but with the CVLB Act , the board could issue new permits at will, without heeding the views of existing bus operators. on the affected routes.
Previously, bus operators were given a lucrative route (from which they made their profits) and a social route, which was a non-lucrative route but which they plied as a service to the public.
They were also allowed to run school bus services and charter services, which helped them earn additional income. The charter service and the lucrative route helped cross-subsidise the cost of running the social routes and the school bus service.
It worked well until the CVLB Act came into force. New applicants only applied for the lucrative routes, which we were plying and it caused our income to diminish. Even the charter bus licence was removed. So with two sources of income diminished over time, we were unable to cross subsidise the social and school bus routes.
We were also badly hit by the introduction of Malaysian-made cars and motorcycles. Loans were easier to obtain. It became more affordable for Malaysians to own cars and motorcycles with the cheaper credit available, so fewer people travelled on buses.
At the same time, more and more bus licences were issued for the same routes. It was a situation of 10 different bus companies plying the same route, each carrying two passengers instead of one bus carrying 20 passengers. Our operational costs also escalated over time. To survive, some operators started getting extended credit or sold their assets.
Question: How much have your operating costs increased over the last 10 years?
Answer: Quite substantially since 2000. A non-air conditioned bus used to cost RM177,000. Now it costs RM270,000. An air conditioned bus, which used to cost RM230,000, now costs RM400,000.
Salaries have increased by between 40 and 50 per cent, the price of diesel (up to 200 per cent increase), batteries (150 per cent), tyres (200 per cent) and spare parts, which have to be imported (300 per cent). Everything has gone up. But fares have not kept up with these rising costs because they are controlled by the government.
We did not pay rental as bus terminals were built by bus operators or provided for free by the local council. Now we are forced to move into bus terminals built by private developers and pay about RM2,000 to RM10,000 rental per month.
Question: Weren’t these problems raised with the authorities for some time now?
Answer: Yes, we have actively been sending out memorandums to the authorities over the last six years. But sad to say, 99 per cent of the time they are ignored. No one takes heed of our suggestions for a more workable solution to our problems. The CVLB was not receptive to our ideas.
Fortunately, the Land Public Transport Commission (SPAD) has been more receptive. I am happy that they have come into the picture and are dealing with the problem more professionally.
Question: Is it fair on the commuters to halt services, especially to those in rural areas who depend on buses for transport?
Answer: I feel sad because the commuters are our customers and many of them are from the lower-income group. We want to help them but our hands are tied. We just can’t survive. For many years we have been asking the government to help us but nothing was done. How long can we carry on?
Last year, we went public and said we cannot operate on our own. We told the government to buy us up. Don’t make the commuters suffer. In January this year, SPAD called us for a meeting and we followed up with a memorandum on our proposals in February. But there was no response. In July, we wrote to the transport minister, but he told us he couldn’t do anything as SPAD was not under his ministry.
In October, we wrote to the government again prime minister, who is in charge of SPAD, and the Finance Ministry seeking for an appointment or acknowledgement.
We’re still waiting for a reply. It is a matter of urgency. Konsortium Transnasional Bhd (KTB) had said enough was enough. They wrote to all the state governments asking for help, saying they could not operate any more and gave 30 days’ notice, but everyone kept quiet.
Question: Why aren’t the other states willing to emulate Malacca by buying up stage bus companies?
Answer: We wish the other state governments would emulate what (Malacca Chief Minister) Datuk Seri Mohd Ali Rustam did. He met us and agreed that the state would buy up all bus operators in Malacca. On top of that, the workers were compensated and given the option to be re-employed on a case-to-case basis.
This ensured that the service to commuters was not disrupted. The workers got retrenchment benefits and the operators were able to sell their buses and pay off their debts.
Negri Sembilan, Penang and Kelantan offered to subsidise for a few months the KTB operations in their states but not to those belonging to other operators. Selangor, Pahang and Kedah declined to help the bus operators, stating that it was a problem for the Federal Government to resolve.
The problem is, a lot of state governments themselves — through their state development corporations — are getting involved in the bus industry.
Even the Ministry of Entrepreneur DevelopmentEntrepreneur and Cooperative Development Ministry, through Mara, is getting into the market and competing with Bumiputera operators. So, instead of helping these dying bus companies, they are squeezing them out of the market.
Question: There is now talk that the Federal Government might give financial aid to bus operators. How far will this help?
Answer: We have submitted our proposal to SPAD but we are still in the dark about their recommendation to the Federal Government. Officially, we have not heard anything.
Question: What is your solution to the problem?
Answer: We gave the government two options — one is to buy us up completely. Alternatively, pay us per kilometre. This formula has been practised in Iskandar (Regional Development Authority). It is also practised in Australia successfully.
Question: Do you think there is light at the end of the tunnel?
Answer: The way things are now, there is no light at the end of the tunnel. We are actually at the end of the tunnel. We are looking at the partial collapse or total collapse of the industry in a year or so. Everyone of us is losing hope. We are concerned about the commuters, especially those from the lower-income group, our workers and their families.
There needs to be a holistic approach to solve this problem.
Source:News Straits Times Online
