The Atlanta Journal-Constitution
Noel L. Griese
Wednesday, June 16, 2010
Just before the Deepwater Horizon accident, Florida spent $200,000 on a study of offshore drilling safety that concludes: “Oil spills from offshore exploration, development, production and the transportation associated with these activities are unlikely to present a major risk to Florida.”
So much for studies.
As the editor of Energy Pipeline News, I have followed the tragedy in the Gulf of Mexico with an insider’s knowledge of offshore drilling and an idea of what we can expect in the months and years ahead. Unfortunately, my background leads me to conclude that the cleanup will take years to accomplish, and compensating the victims and punishing those responsible will also take time.
Although the Deepwater Horizon may have been the first rig most Americans ever heard of, the Gulf is populated by a tangled network of 3,500 oil-drilling platforms and more than 43,000 miles of pipelines between Texas and Alabama.
The U.S. Gulf had accidents before the Deepwater Horizon burned and sank. Because of hurricanes Katrina and Rita, more than 8 million gallons of oil were spilled from coastal oil facilities and some 3.3 million gallons were spilled from a tank barge when it struck a sunken oil platform. More than 600,000 gallons were spilled from U.S. offshore oil platforms and pipelines.
Testimony before congressional committees reveals that shortcuts to safety were taken on the Deepwater Horizon to save money. The rig, which was costing BP $1 million a day, was 21 days behind schedule. So corners were cut. There’s plenty of blame to go around — for responsible party BP, rig owner Transocean, cementing contractor Halliburton, federal regulators and responders.
Based on an admittedly low-ball U.S. government estimate released in late May, the BP well blowout spilled about 500,000-800,000 barrels of oil into the Gulf through May. That compares with about 3.5 million barrels spilled off shore of Mexico over nine months in 1979 by the Pemex-operated Ixtoc I well that blew out on June 3, 1979, in the second-largest accidental spill in world history. But new estimates from a government technical committee on the amount of oil released through June 3 put the BP blowout already very close to surpassing the Ixtoc I record.
Despite vast U.S. waters, only 62 federal inspectors oversee offshore drilling in the Gulf and U.S. waters along the East and West coasts. Perhaps because its regulatory arm is understaffed, the Minerals Management Service quickly granted permission for BP to take the risks that resulted in the accident.
MMS also collects about $13 billion in annual royalties from the oil industry. This dual role of collecting revenues and enforcing safety put the agency in a conflict of interest with itself. Secretary of the Interior Ken Salazar is in the process of splitting the various MMS functions into three separate offices in an effort to minimize future conflicts of interest.
Despite our experience with the Exxon Valdez disaster in 1989, the response to the Deepwater Horizon spill was initially disorganized and inept. Even today, almost two months after the blowout, only a relatively few skimmers are in the Gulf cleaning up oil floating on the surface. Deployment of ocean booms to protect shorelines has been basically ineffective.
The Unified Command responding to the Gulf spill has not explained very well why supertankers are not being deployed to vacuum up oil, as was the case in the Persian Gulf some years ago. Vacuuming in the Persian Gulf was easier because the oil floated to the surface and was not broken up with dispersants.
After you suck this sort of oil into a supertanker, you wait for the oil and water to separate. Then, if there are no regulations against it, you siphon off the water and pump it back into the ocean.
Despite BP’s denials to the contrary, much if not most of the oil spilled in the Gulf is in huge plumes of droplets of oil in colloidal suspension. There are many of these plumes, which are up to 3,000 feet deep and miles long.
Normally, the heavy ends of the oil (used to make asphalt) settle on the ocean bottom. The thick, gooey oil, ranging in consistency from tar to mousse, floats on the surface.
Even if most of the Gulf could be vacuumed up into supertankers to get the droplets of oil, what would end up in the supertankers would be a tiny amount of dispersant and oil, mixed with a huge amount of water. Regulations prohibit dumping the siphoned water back into the ocean, so the responsible party (BP) would have to figure out what to do with much of the Gulf of Mexico sitting as oily water waste in supertankers. It’s doubtful that there’s enough tank capacity onshore to handle all this oily water until it is disposed of properly.
The spill may be reduced in size by various temporary measures, but stopping the oil will likely not happen until August, when two new relief drillings to intercept the blown-out well are completed. When that happens, the well will be cemented and capped.
But expect cleanup of the environment to go on for decades.
Under the Clean Water Act, the EPA and Department of Justice can fine BP up to $4,300 per barrel spilled if willful negligence is proved. Proving negligence should not be difficult.
BP is already on probation in the U.S. after pleading guilty to a misdemeanor criminal charge resulting from oil spills on Alaska’s North Slope.
The experience of the federal government in suing Exxon over the Exxon Valdez accident offers some clues about where future government lawsuits against BP are likely to head.
Less than a year after the Exxon Valdez oil spill of about 262,000 barrels (though the spill may have been larger), a federal grand jury indicted Exxon and its shipping subsidiary on five criminal violations. Exxon, facing $600 million in fines, pleaded not guilty.
In a plea bargain with the Justice Department, Exxon agreed to pay $100 million in fines and restitution. But the federal judge in the case rejected the deal. The parties settled for $125 million.
Later, in 1994, a grand jury in a civil action levied punitive damages of $5 billion against Exxon, but that was reduced by the U.S. Supreme Court to $507.5 million under a maritime law ruling. Maritime law may also apply in the BP case.
In all, Exxon, at risk for $6 billion, ended up paying just over $1 billion in these criminal and civil settlements. Settlements in most such cases are negotiated, delayed and appealed over a long time. By the time many suits are settled, the claimants are dead.
Companies like BP normally turn to contractors to handle the claims process for those seeking immediate damages, such as fishermen who have lost their livelihoods. The contractor employees, who may be overseen by a BP representative, are familiar with techniques for minimizing claims paid. Claimants are often desperate, and settle for cents on the dollar to get paid.
It remains to be seen how BP will exert its political muscle to minimize its losses.
BP has hired 27 more lobbyists, mostly former elected and appointed federal officials, to work its case on Capitol Hill.
The oil and gas industry spent more on federal lobbying last year than all but two other industries, with $174.8 million in lobbying expenditures, according to the Center for Responsive Politics.
Political action committees set up by the oil and gas producers contributed an additional $9 million in the last election cycle to congressional candidates, with Koch Industries (owner of Atlanta-based Georgia Pacific), ExxonMobil, Valero Energy and Chevron leading the way. BP ranked 19th, with $75,500 in contributions, mostly to Republicans.
BP has also rolled out a $50 million PR campaign featuring a TV spot starring CEO Tony Hayward, whose impolitic comments while the news cameras were rolling, such as “I’d like to get my life back,” have proven to be less than popular.
In paid TV ads, what the CEO says can be controlled.
Noel L. Griese is the editor of Energy Pipeline News, published daily by Anvil Publishers of Atlanta and the author of 17 books on the energy industry and other subjects.
Friday, June 18, 2010
Friday, May 28, 2010
Lab proposes an increase of 10 sen every six months until 2014
The Star Online, Friday 28,2010
KUALA LUMPUR: Fuel prices could increase as soon as next month if a proposal by the Subsidy Rationalisation Lab is to be implemented.
The lab, organised by Performance Management and Delivery Unit, recommended that fuel price be increased by 10 sen to 15 sen by the middle of the year to help realise the Government’s plan to cut its subsidy bill.
Following the initial increase, the lab proposed an increase of 10 sen every six months until 2014, by which time the level is expected to have reached market price.
To help mitigate the effects of the price hike, owners of cars with an engine capacity below 1,000cc will get a cash rebate of RM126 per year.
Owners of motorcycles below 250cc will get a rebate of RM54 a year.
Using this formula, the Government will save RM44.9bil in five years.
According to a simulation conducted by the lab, the impact of the price hike would be minimal.
It found that the diesel price hike of 15% or 21 sen would result in express bus fares increasing by one sen to 1.5 sen a kilometre.
The same quantum of increase would raise stage bus fares by 1.4 sen to 50 sen a kilometre, and school bus fares by one sen to 58 sen a kilometre.
For cooking gas or liquefied petroleum gas, the lab proposed a 10% increase by the middle of the year, followed by a 20% increase every year.
The lab projected that an increase of 15% in the price of gas would raise prices of food such as roti canai, nasi lemak, teh tarik and mee goreng by only one to four sen.
On healthcare, the lab proposed that the charge for outpatient treatment at public clinics and hospitals be increased from RM1 to RM3.
For in-patient treatment, the cost will be doubled to RM160 for Class One wards, RM40 (Class Two) and RM6 (Class Three).
Those whose household income is under RM2,160 or categorised under the Fees Act will still enjoy fee exemption.
It also proposed that from 2013, patients pay a percentage of their in-patient cost instead of the current flat rate, and from 2015, patients are to pay a percentage of their outpatient treatment and medication.
KUALA LUMPUR: Fuel prices could increase as soon as next month if a proposal by the Subsidy Rationalisation Lab is to be implemented.
The lab, organised by Performance Management and Delivery Unit, recommended that fuel price be increased by 10 sen to 15 sen by the middle of the year to help realise the Government’s plan to cut its subsidy bill.
Following the initial increase, the lab proposed an increase of 10 sen every six months until 2014, by which time the level is expected to have reached market price.
To help mitigate the effects of the price hike, owners of cars with an engine capacity below 1,000cc will get a cash rebate of RM126 per year.
Owners of motorcycles below 250cc will get a rebate of RM54 a year.
Using this formula, the Government will save RM44.9bil in five years.
According to a simulation conducted by the lab, the impact of the price hike would be minimal.
It found that the diesel price hike of 15% or 21 sen would result in express bus fares increasing by one sen to 1.5 sen a kilometre.
The same quantum of increase would raise stage bus fares by 1.4 sen to 50 sen a kilometre, and school bus fares by one sen to 58 sen a kilometre.
For cooking gas or liquefied petroleum gas, the lab proposed a 10% increase by the middle of the year, followed by a 20% increase every year.
The lab projected that an increase of 15% in the price of gas would raise prices of food such as roti canai, nasi lemak, teh tarik and mee goreng by only one to four sen.
On healthcare, the lab proposed that the charge for outpatient treatment at public clinics and hospitals be increased from RM1 to RM3.
For in-patient treatment, the cost will be doubled to RM160 for Class One wards, RM40 (Class Two) and RM6 (Class Three).
Those whose household income is under RM2,160 or categorised under the Fees Act will still enjoy fee exemption.
It also proposed that from 2013, patients pay a percentage of their in-patient cost instead of the current flat rate, and from 2015, patients are to pay a percentage of their outpatient treatment and medication.
Malaysia petrol prices could rise initial 15sen/ltr
Wed May 26, 2010 9:04pm EDT
KUALA LUMPUR, May 27 (Reuters) - Malaysia's government could hike petrol prices by an initial 15 sen (Malaysian cents) per litre from their current price at some stage this year under plans presented by a body advising the government on how to cut subsidies.
The benchmark RON 95 grade currently costs 1.80 ringgit ($0.543) per litre.
The proposals were made in a public presentation on Thursday to win over voters to accepting higher prices as Malaysia seeks to reduce its budget deficit which stood at a 20-year high of 7 percent of gross domestic product in 2009.
Under the proposals presented by the advisory body, the price of petrol would be hiked some time this year followed by two price hikes totalling 20 sen per litre in 2011 and two more of 20 sen per litre in 2012.
In 2013-2015, the price hikes would slow and by the end of 2015, the price of RON95 would stand at 2.60 ringgit per litre, according to the plans that have yet to be approved by the government.
The forecasts were based on a crude oil price forecast of $73.06 per barrel for 2011 and $79.41-$94.52 for 2013-2015.
KUALA LUMPUR, May 27 (Reuters) - Malaysia's government could hike petrol prices by an initial 15 sen (Malaysian cents) per litre from their current price at some stage this year under plans presented by a body advising the government on how to cut subsidies.
The benchmark RON 95 grade currently costs 1.80 ringgit ($0.543) per litre.
The proposals were made in a public presentation on Thursday to win over voters to accepting higher prices as Malaysia seeks to reduce its budget deficit which stood at a 20-year high of 7 percent of gross domestic product in 2009.
Under the proposals presented by the advisory body, the price of petrol would be hiked some time this year followed by two price hikes totalling 20 sen per litre in 2011 and two more of 20 sen per litre in 2012.
In 2013-2015, the price hikes would slow and by the end of 2015, the price of RON95 would stand at 2.60 ringgit per litre, according to the plans that have yet to be approved by the government.
The forecasts were based on a crude oil price forecast of $73.06 per barrel for 2011 and $79.41-$94.52 for 2013-2015.
Monday, April 26, 2010
Congestion pricing could be extended to Penang
Sunday April 25, 2010 - The Star Online
THE LPT Bill, if enacted, will not be restricted to Kuala Lumpur. It also provides the authority to implement ACP in any city in the country so there is a probability it could even be introduced in Penang.
However, Penang-based Citizens for Public Transport (Cepat) is against the idea.
Says Cepat co-ordinator and member of the Penang State Transport Council Dr Choong Sim Poey: “It may mean setting up a complicated system of gates to monitor movement of cars in and out of these zones.”
He says it could be expensive to implement and would not be successful if it was.
“We can’t even prevent illegal parking in front of police stations, for example in Penang Road or Burmah Road, so how can we monitor illegal entry?” he questions.
He believes congested areas can be cleared – simply by moving illegally-parked vehicles off the road. He also suggests reducing on-street parking, and raising the parking fees and a strong public transport improvement campaign as alternative measures.
“No extra equipment or infrastructure is needed, just political will. Cepat proposed this years ago, and we are waiting to see what progress the state Government can achieve,” says Dr Choong.
Similarly, social activist and blogger Anil Netto is against ACP.
“Much can be done to improve the public transport system, and we need to work on that first. Having congestion pricing without substantial improvements in public transport would be terrible,” he says.
A novel solution to improve public transport in Penang is to re-introduce the use of trams, and Netto has got a group of bloggers together to endorse the idea.
Trams are not new to the city; there was a tram system running in Penang until 1936.
He believes trams have many benefits and in the context of Penang will blend in with its heritage environment.
“It can be an added attraction for Penang, and it would be the first in the South-East Asian region. It’s also a great way to see the city and could encourage more visitors – locals, out-of-town Malaysians and foreign tourists – to the city. It will stimulate local economic activity,” he says.
Trams aside, Netto opines that Penang’s public transport system – on the whole – should be improved.
“It is not an either-or situation. Buses, trams, ferries – along with cycling and walking – should be part of an integrated transport system that complements one another, making Penang more accessible to all,” says Netto.
THE LPT Bill, if enacted, will not be restricted to Kuala Lumpur. It also provides the authority to implement ACP in any city in the country so there is a probability it could even be introduced in Penang.
However, Penang-based Citizens for Public Transport (Cepat) is against the idea.
Says Cepat co-ordinator and member of the Penang State Transport Council Dr Choong Sim Poey: “It may mean setting up a complicated system of gates to monitor movement of cars in and out of these zones.”
He says it could be expensive to implement and would not be successful if it was.
“We can’t even prevent illegal parking in front of police stations, for example in Penang Road or Burmah Road, so how can we monitor illegal entry?” he questions.
He believes congested areas can be cleared – simply by moving illegally-parked vehicles off the road. He also suggests reducing on-street parking, and raising the parking fees and a strong public transport improvement campaign as alternative measures.
“No extra equipment or infrastructure is needed, just political will. Cepat proposed this years ago, and we are waiting to see what progress the state Government can achieve,” says Dr Choong.
Similarly, social activist and blogger Anil Netto is against ACP.
“Much can be done to improve the public transport system, and we need to work on that first. Having congestion pricing without substantial improvements in public transport would be terrible,” he says.
A novel solution to improve public transport in Penang is to re-introduce the use of trams, and Netto has got a group of bloggers together to endorse the idea.
Trams are not new to the city; there was a tram system running in Penang until 1936.
He believes trams have many benefits and in the context of Penang will blend in with its heritage environment.
“It can be an added attraction for Penang, and it would be the first in the South-East Asian region. It’s also a great way to see the city and could encourage more visitors – locals, out-of-town Malaysians and foreign tourists – to the city. It will stimulate local economic activity,” he says.
Trams aside, Netto opines that Penang’s public transport system – on the whole – should be improved.
“It is not an either-or situation. Buses, trams, ferries – along with cycling and walking – should be part of an integrated transport system that complements one another, making Penang more accessible to all,” says Netto.
Commuters unwilling to pay unless system improves
Sunday April 25, 2010
The Star Online
FOR those working in the KL city centre, Area Congestion Pricing (ACP) is not something they are looking forward to, but some accept that it can be an effective measure. While people understand the need for a congestion toll, most are unwilling to accept it at the moment.
“I agree that traffic problems need to be addressed but I do not think ACP will be a solution until public transportation improves,” says financial advisor C.W. Ting* who is willing to pay an ACP charge, provided it costs the same as his fare.
K Nasir* reservedly agrees to the idea, but believes a combination of measures is needed to control traffic.
“I will be more motivated to car pool, but there will be days when I will still drive,” he says.
However, Hwei Min* who commutes from Subang Jaya to KLCC is against the idea of ACP as she has no choice but to drive to work every day.
“There is no Light Rail Transit (LRT) in Subang Jaya and I would have to drive to Kelana Jaya, which takes me more than half an hour. Then I would have to wait for three or four trains before boarding.
“I would probably have wasted at least one and a half hours using the LRT as opposed to driving, which takes me about 45 minutes,” says Min, adding that public transport in KL is a nightmare.
Danny Lok, 36, a frequent commuter on the LRT, has had many bad experiences due to breakdowns.
“The worst part is there is no continuity plan. They should advise or provide alternative transport to their desired station. They don’t communicate information to commuters either.”
* Full/actual names withheld on request
The Star Online
FOR those working in the KL city centre, Area Congestion Pricing (ACP) is not something they are looking forward to, but some accept that it can be an effective measure. While people understand the need for a congestion toll, most are unwilling to accept it at the moment.
“I agree that traffic problems need to be addressed but I do not think ACP will be a solution until public transportation improves,” says financial advisor C.W. Ting* who is willing to pay an ACP charge, provided it costs the same as his fare.
K Nasir* reservedly agrees to the idea, but believes a combination of measures is needed to control traffic.
“I will be more motivated to car pool, but there will be days when I will still drive,” he says.
However, Hwei Min* who commutes from Subang Jaya to KLCC is against the idea of ACP as she has no choice but to drive to work every day.
“There is no Light Rail Transit (LRT) in Subang Jaya and I would have to drive to Kelana Jaya, which takes me more than half an hour. Then I would have to wait for three or four trains before boarding.
“I would probably have wasted at least one and a half hours using the LRT as opposed to driving, which takes me about 45 minutes,” says Min, adding that public transport in KL is a nightmare.
Danny Lok, 36, a frequent commuter on the LRT, has had many bad experiences due to breakdowns.
“The worst part is there is no continuity plan. They should advise or provide alternative transport to their desired station. They don’t communicate information to commuters either.”
* Full/actual names withheld on request
Bumpy road before a smooth drive
By JOSEPH LOH - The Star Online - 25 April 2010
A recently-tabled bill makes it possible for a congestion charge to be implemented for cars entering Kuala Lumpur’s city centre. But critics say a reliable and efficient public transport system needs to be in place first.
WITH the tabling of the Land Public Transport (LPT) Bill in Parliament recently, Malaysia has taken the first step towards the introduction of an area congestion pricing (ACP) scheme in traffic-snarled cities around the country.
This congestion toll system, similar to the Electronic Road Pricing (ERP) in Singapore, and the Congestion Charge (CC) in London, England, makes users pay to use roads in the city centre to reduce traffic jams and to promote more efficient use of roads.
This Bill goes hand in hand with another, the Suruhanjaya Pengangkutan Awam Darat Bill (Land Public Transport Commission, SPAD) which empowers the formation of an authority in charge of all matters related to public transport, be it road or rail.
Moaz Yusuf Ahmad, advisor to The Association For The Improvement Of Mass Transit (Transit) explains the purpose of ACP.
“Roads are valuable because there is a limited amount of space in the city. Drivers willing to pay more will have the option of using the roads, but it is not meant to prevent people from driving into the city centre. Rather, it is to discourage them from driving alone, encouraging people to car pool, or to use alternative transport,” he says.
Moaz adds that charging a premium for using roads in the city makes sense.
“If a house in the city costs more than that in the suburbs, the cost of the roads should be higher as well,” he says.
Goh Bok Yen, a transport planning consultant, says that at a basic level, it encourages people to switch to an alternative other than driving.
“The existing road space can be used more effectively and will make better use of the urban road system,” he says.
London and Singapore are considered to be good models of a congestion charge system, and its basic goal has been achieved. In February 2004, one year after London introduced the CC, Transport for London estimated traffic levels during charging hours showed a reduction of 18%, with a reduction of 30% in cars.
This also led to a significant gain in bus reliability, and London buses experienced up to a 60% reduction in disruption caused by traffic jams.
The point to note is that a congestion toll – if properly implemented – can be effective.
Moaz says that cars coming into the city centre are typically of single or low occupancy, and the average number of people in a car is a paltry 1.08.
“If we have an ACP, it would immediately reduce the (number of) cars coming into the city centre. If we increase the people from one to two per car, we can reduce the number of cars by half, and that would make a big difference,” he explains.
The price of deterrence
A pertinent question is the amount that will be charged. In Singapore, the ERP rates vary from 50 cents to S$4.00 (RM1.17 to RM9.30) per road travelled, while London’s CC is £8 (RM39.28) per day.
Goh believes that the quantum charged should be reflected by the price of the substitute available.
“It is like the elasticity of demand. If you have a very good substitute, people will switch to it even though the ACP price is not high. The resistance of people is reflected by availability of public transport,” says Goh.
There is also the question of where the collected funds end up.
London collected £325.7mil (RM1.6bil) in congestion charges in its 2008-2009 financial year, and after deducting all operating costs, had a net profit of £148.5mil (RM729.1mil). This sum was spent entirely on improving transport in line with the Mayor of London’s transport strategy.
Which is why Goh is strongly against privatisation of any local ACP collection system.
“It needs to be pumped back into the roads and the public transport system. If you privatise it, then profits will be channelled away. In Malaysia, we have a painful experience of road tolls. Every time a highway is completed, people should be happy, but these days everybody complains about it. We do not want that repeated for the ACP,” says Goh.
Moaz believes the sharing of information is crucial.
“It is frustrating not to have information, especially in the IT age, We have to inform people how the system works, what it is for, and tell them where the money is going. If we do not do that, people are going to object and think it is just another money pit,” he says.
However, what both London and Singapore share is a vital feature that makes a congestion toll system possible – a comprehensive, efficient and reliable public transport system. This is practically a prerequisite before a congestion toll can be implemented.
Goh says the basic requirement that has to be fulfilled is for motorists to have a viable, alternative mode of transport.
“Is public transport in KL today a reasonable substitute for a private car? It is not, and we are very far from it. It needs to have the elements of comfort, reliability, frequency and safety.
“You want something that can substitute for the whole journey in a reasonable manner. If we implement ACP before reaching that level, we leave the commuter no alternative but to drive and pay,” he says.
Goh adds that before the CC was implemented in London, the public transport system was at a very high standard and carried up to 70% of the commuters to work every day.
“Here, only about 18% of commuters use public transport. But looking at it in a positive light, we have a huge market for public transport,” he says.
Moaz, however, says the public should be aware that public transport will never be as comfortable and convenient as a private car.
“It will never reach that standard but it will give different advantages a private car will not give,” he says.
Comfort is a consideration, but Moaz says this is not the most important factor.
“People know they may have to stand, and sitting space will be cramped, but they are willing to sacrifice that personal comfort,” he says.
The most important factors, in descending order, are reliability, frequency, comfort, speed, information and the fare, he stresses.
The underlying fact is that there are simply not enough buses, trains, routes, accessibility from the house to the station and from the station to the destination to make public transport attractive.
“If we want congestion pricing, we must take a great leap forward in improving the public transport system. At the moment, it is premature to talk about it. What it really needs is a complete revamp of the system.
“Right now, we have not reached an acceptable level of public transport. The recent improvements (in the form of RapidKL and others) are just playing catch-up. What we have done is getting to a level we should have been five years ago,” says Moaz.
Goh agrees, saying that the public transport system should have been improved long before the rapid growth of private vehicle ownership.
“We have not done much for public transport until the last five years, but we have been talking about it for more than 25 years,” he says.
Goh believes that an ACP on its own is not sufficient to solve traffic problems – what is needed is a multi-faceted approach.
“For example, at one time Singapore was targeting low occupancy vehicles, and later high-occupancy vehicles too, and now everyone pays – even motorcycles or public transport vehicles.
“It also wanted to constrain vehicle ownership to restrict the number of cars on the road. They went another step further by having off-peak hours and weekend cars, and those are the ones with red plates,” he says.
Moaz also believes that ACP by itself will not accomplish the goal of reducing the number of cars on the road.
Incentives needed
“That is only one solution, and we would have liked to see other initiatives included in the Bill. For example, there should have been a package of incentives to encourage people to take public transport,” he says.
Apart from improving pubic transport, Goh says, there is a need for alternative routes around the city centre.
“Right now you may have to go through the city centre if you want to get to a particular destination from another. We should have a choice of roads but the linkages are missing,” he says.
He also thinks the proposed roads indicated by the Draft KL City Plan 2020 for ACP is too restrictive.
“The ACP outlined in the plan is constrained mainly to the central business district. It should be an area similar to the area surrounded by the middle ring road (Jalan Tun Razak). Also, with a defined boundary it will be easier to administer,” says Goh.
Moaz goes further and looks at the Commission itself.
“One of our biggest concerns is that the SPAD will be a re-organisation rather than a total reform of public transport. They are combining the Commercial Vehicle Licensing Board and the Department of Railways, which handle all commercial transport on roads and rail respectively, into one organisation.
“Structurally it is better, but is it going to make real changes in the public transport system? If there is no reform, it will just be structural and nothing will change on the road,” he says.
Moaz says what is needed is something like the London model, which is called Transport for London (TFL).
“Say we call it Rapid for KL, and it will not be operating a service but instead focuses on managing the system. Companies like Len Seng or Metrobus would work for them, and the RapidKL bus and LRT services could be spun off as individual companies and work for the company. So Rapid for KL would be the single brand and face of public transport for Kuala Lumpur,” he suggests.
Optimistic for the future
Moaz says the new Bills do represent a step forward in reducing Kuala Lumpur’s traffic woes. “Creating the SPAD is a step forward, and it could take us to a major leap in public transport if they are willing to push for it.
“But if the SPAD does not push and take the lead on this, it will be 20 years of the same. Without a total reform of the public transport system, it is premature to talk about ACP,” he says.
“Under the current system, we are limited by a bureaucratic set of rules. Unless we can get past that we will not be able to achieve the quality of service and information required,” adds Moaz.
Goh says all factors such as public transport, alternative roads and other matters need to be achieved before ACP is implemented.
“It would be optimistic to say we can develop it within five years. But in 10 years’ time, it is possible. This would be two five-year plans, and if we don’t achieve it, then we are not serious about it,” says Goh.
A recently-tabled bill makes it possible for a congestion charge to be implemented for cars entering Kuala Lumpur’s city centre. But critics say a reliable and efficient public transport system needs to be in place first.
WITH the tabling of the Land Public Transport (LPT) Bill in Parliament recently, Malaysia has taken the first step towards the introduction of an area congestion pricing (ACP) scheme in traffic-snarled cities around the country.
This congestion toll system, similar to the Electronic Road Pricing (ERP) in Singapore, and the Congestion Charge (CC) in London, England, makes users pay to use roads in the city centre to reduce traffic jams and to promote more efficient use of roads.
This Bill goes hand in hand with another, the Suruhanjaya Pengangkutan Awam Darat Bill (Land Public Transport Commission, SPAD) which empowers the formation of an authority in charge of all matters related to public transport, be it road or rail.
Moaz Yusuf Ahmad, advisor to The Association For The Improvement Of Mass Transit (Transit) explains the purpose of ACP.
“Roads are valuable because there is a limited amount of space in the city. Drivers willing to pay more will have the option of using the roads, but it is not meant to prevent people from driving into the city centre. Rather, it is to discourage them from driving alone, encouraging people to car pool, or to use alternative transport,” he says.
Moaz adds that charging a premium for using roads in the city makes sense.
“If a house in the city costs more than that in the suburbs, the cost of the roads should be higher as well,” he says.
Goh Bok Yen, a transport planning consultant, says that at a basic level, it encourages people to switch to an alternative other than driving.
“The existing road space can be used more effectively and will make better use of the urban road system,” he says.
London and Singapore are considered to be good models of a congestion charge system, and its basic goal has been achieved. In February 2004, one year after London introduced the CC, Transport for London estimated traffic levels during charging hours showed a reduction of 18%, with a reduction of 30% in cars.
This also led to a significant gain in bus reliability, and London buses experienced up to a 60% reduction in disruption caused by traffic jams.
The point to note is that a congestion toll – if properly implemented – can be effective.
Moaz says that cars coming into the city centre are typically of single or low occupancy, and the average number of people in a car is a paltry 1.08.
“If we have an ACP, it would immediately reduce the (number of) cars coming into the city centre. If we increase the people from one to two per car, we can reduce the number of cars by half, and that would make a big difference,” he explains.
The price of deterrence
A pertinent question is the amount that will be charged. In Singapore, the ERP rates vary from 50 cents to S$4.00 (RM1.17 to RM9.30) per road travelled, while London’s CC is £8 (RM39.28) per day.
Goh believes that the quantum charged should be reflected by the price of the substitute available.
“It is like the elasticity of demand. If you have a very good substitute, people will switch to it even though the ACP price is not high. The resistance of people is reflected by availability of public transport,” says Goh.
There is also the question of where the collected funds end up.
London collected £325.7mil (RM1.6bil) in congestion charges in its 2008-2009 financial year, and after deducting all operating costs, had a net profit of £148.5mil (RM729.1mil). This sum was spent entirely on improving transport in line with the Mayor of London’s transport strategy.
Which is why Goh is strongly against privatisation of any local ACP collection system.
“It needs to be pumped back into the roads and the public transport system. If you privatise it, then profits will be channelled away. In Malaysia, we have a painful experience of road tolls. Every time a highway is completed, people should be happy, but these days everybody complains about it. We do not want that repeated for the ACP,” says Goh.
Moaz believes the sharing of information is crucial.
“It is frustrating not to have information, especially in the IT age, We have to inform people how the system works, what it is for, and tell them where the money is going. If we do not do that, people are going to object and think it is just another money pit,” he says.
However, what both London and Singapore share is a vital feature that makes a congestion toll system possible – a comprehensive, efficient and reliable public transport system. This is practically a prerequisite before a congestion toll can be implemented.
Goh says the basic requirement that has to be fulfilled is for motorists to have a viable, alternative mode of transport.
“Is public transport in KL today a reasonable substitute for a private car? It is not, and we are very far from it. It needs to have the elements of comfort, reliability, frequency and safety.
“You want something that can substitute for the whole journey in a reasonable manner. If we implement ACP before reaching that level, we leave the commuter no alternative but to drive and pay,” he says.
Goh adds that before the CC was implemented in London, the public transport system was at a very high standard and carried up to 70% of the commuters to work every day.
“Here, only about 18% of commuters use public transport. But looking at it in a positive light, we have a huge market for public transport,” he says.
Moaz, however, says the public should be aware that public transport will never be as comfortable and convenient as a private car.
“It will never reach that standard but it will give different advantages a private car will not give,” he says.
Comfort is a consideration, but Moaz says this is not the most important factor.
“People know they may have to stand, and sitting space will be cramped, but they are willing to sacrifice that personal comfort,” he says.
The most important factors, in descending order, are reliability, frequency, comfort, speed, information and the fare, he stresses.
The underlying fact is that there are simply not enough buses, trains, routes, accessibility from the house to the station and from the station to the destination to make public transport attractive.
“If we want congestion pricing, we must take a great leap forward in improving the public transport system. At the moment, it is premature to talk about it. What it really needs is a complete revamp of the system.
“Right now, we have not reached an acceptable level of public transport. The recent improvements (in the form of RapidKL and others) are just playing catch-up. What we have done is getting to a level we should have been five years ago,” says Moaz.
Goh agrees, saying that the public transport system should have been improved long before the rapid growth of private vehicle ownership.
“We have not done much for public transport until the last five years, but we have been talking about it for more than 25 years,” he says.
Goh believes that an ACP on its own is not sufficient to solve traffic problems – what is needed is a multi-faceted approach.
“For example, at one time Singapore was targeting low occupancy vehicles, and later high-occupancy vehicles too, and now everyone pays – even motorcycles or public transport vehicles.
“It also wanted to constrain vehicle ownership to restrict the number of cars on the road. They went another step further by having off-peak hours and weekend cars, and those are the ones with red plates,” he says.
Moaz also believes that ACP by itself will not accomplish the goal of reducing the number of cars on the road.
Incentives needed
“That is only one solution, and we would have liked to see other initiatives included in the Bill. For example, there should have been a package of incentives to encourage people to take public transport,” he says.
Apart from improving pubic transport, Goh says, there is a need for alternative routes around the city centre.
“Right now you may have to go through the city centre if you want to get to a particular destination from another. We should have a choice of roads but the linkages are missing,” he says.
He also thinks the proposed roads indicated by the Draft KL City Plan 2020 for ACP is too restrictive.
“The ACP outlined in the plan is constrained mainly to the central business district. It should be an area similar to the area surrounded by the middle ring road (Jalan Tun Razak). Also, with a defined boundary it will be easier to administer,” says Goh.
Moaz goes further and looks at the Commission itself.
“One of our biggest concerns is that the SPAD will be a re-organisation rather than a total reform of public transport. They are combining the Commercial Vehicle Licensing Board and the Department of Railways, which handle all commercial transport on roads and rail respectively, into one organisation.
“Structurally it is better, but is it going to make real changes in the public transport system? If there is no reform, it will just be structural and nothing will change on the road,” he says.
Moaz says what is needed is something like the London model, which is called Transport for London (TFL).
“Say we call it Rapid for KL, and it will not be operating a service but instead focuses on managing the system. Companies like Len Seng or Metrobus would work for them, and the RapidKL bus and LRT services could be spun off as individual companies and work for the company. So Rapid for KL would be the single brand and face of public transport for Kuala Lumpur,” he suggests.
Optimistic for the future
Moaz says the new Bills do represent a step forward in reducing Kuala Lumpur’s traffic woes. “Creating the SPAD is a step forward, and it could take us to a major leap in public transport if they are willing to push for it.
“But if the SPAD does not push and take the lead on this, it will be 20 years of the same. Without a total reform of the public transport system, it is premature to talk about ACP,” he says.
“Under the current system, we are limited by a bureaucratic set of rules. Unless we can get past that we will not be able to achieve the quality of service and information required,” adds Moaz.
Goh says all factors such as public transport, alternative roads and other matters need to be achieved before ACP is implemented.
“It would be optimistic to say we can develop it within five years. But in 10 years’ time, it is possible. This would be two five-year plans, and if we don’t achieve it, then we are not serious about it,” says Goh.
Paying a price for less congestion in the city
By LIM CHIA YING - The Star Online - 26 April 2010
WHEN the Land Public Transport Bill 2010 was tabled for its first reading at Parliament two weeks ago, it generated a lot of interest from various quarters.
The act, among others, introduces an area congestion pricing scheme for certain areas during peak hours.
It also spells out a fine of up to RM2,000 or six months imprisonment or both for those who fail to pay the charge.
However, certain parties have come out against the bill, asking if it will be enough to encourage motorists to switch to public transportation.
Association for the Improvement of Mass Transit Klang Valley (Transit) adviser Moaz Yusuf Ahmad said it was an important issue but, currently, many had no choice but to use their own vehicles.
He said the congestion fee was part of the Government Transfor-mation Programme beyond 2012/2013 but the concept had not been marketed properly, resulting in negative comments and concerns over its possible implementation.
“Currently, there is no incentive for those who use private vehicles to switch to public transport.
Gridlock: Most of the concerned parties agree that the public transport system must be improved before congestion charges are introduced.
“Naturally, questions will arise on how the government will implement and manage the system and where the fees collected will go.
“Motorists must be made to realise that public transport will mean less worries about double-parking, the jaga kereta menace and stress.
“Those who want the convenience of using their own vehicles during peak hours will have to pay for it, which is a fair deal. However, the root of the problem is still our public transportation system,” Moaz said.
He pointed out that the Kota Damansara-Cheras line, which was announced in 2006, had still not taken off four years later.
“The government cannot rely on building LRT lines alone as it takes time to set up the infrastructure,” Moaz said.
Instead, he champions the need for bus-rapid-transit (BRT) systems, which he says are an efficient and cost-effective means of moving a largest number of people on the road.
“Bus lanes have to be introduced and enforced and the entire bus system must be reorganised. Transit feels there should be a physical separation of the lanes,” he said.
A motorist, who only wished to be known as William, said he worked in Bukit Bintang and, despite having a monorail station nearby, chooses to drive to work.
According to him, there are not enough parking spaces at the monorail stations and he does not like the crowd in the trains.
“If the congestion fees are introduced, I might not drive but it depends on the quantum. If I can afford it, I will still drive,” William said.
Bukit Bintang MP Fong Kui Lun also thinks that congestion charges are not appropriate now as the public transport system is still fragmented.
“There are many destinations that the LRT and buses do not service. Congestion charges should only be introduced when between 50% and 70% of city folk use public transport,” he said, adding that in Japan, about 75% of its population used public transport.
Moaz felt that the congestion charges should only be imposed as a last resort. Instead, he suggested other options like increasing parking charges in various parts of the city or having tax charges for certain car registration plates.
“With congestion fees, the amount should be small enough to slowly encourage people to use public transport or carpool.
“Now, most cars entering KL only have one occupant. If we can increase the average to two per vehicle, we can halve the number of cars on the road,” he said.
However, not everyone is enthusiastic about carpooling, with Cheras MP Tan Kok Wai saying that it had been tried unsuccessfully in the past.
“I recently read an article that provided statistics on the use of public transport in the Klang Valley. In 1985, 34% of the population used public transport. Today, that number has dropped to about 10%.
“This just shows a failure of the system. About three-and-a-half years ago, Kuala Lumpur City Hall (DBKL) had organised a forum on a similar area congestion pricing scheme but rejected the idea after negative feedback,” he said.
“In many car-producing countries, cars are affordable yet many opt to use public transport because it is efficient.
“The Bill should be withdrawn and reintroduced when the time is right. More should be done for public transport first,” he added.
Taxi passengers may also have to pay more if the Bill is imposed on cab services.
Federal Territory and Selangor Taxi Operators Association president Datuk Aslah Abdullah said this was the case in Singapore.
“However, we do not know if taxis, which are considered public transportation, are covered by the Bill.
“I’m worried that if the Bill comes into place and bus and LRT services improve, no one will want to take taxis, as customers will the decide on the cheapest form of transport,” Aslah said.
Klang Valley Taxi Owners Association president Abdul Jalil Maarof also said any congestion fees should be reduced for public vehicles like taxis and buses.
In a speech prepared by Deputy Prime Minister Tan Sri Muhyiddin Yassin for the Asian Metrocity Summit 2010 early this month, he said the present Klang Valley public transport share was only 10% although the government planned to increase it to 13% by yearend.
In his text, Muhyiddin said the Government Transformation Roadmap reflected a policy shift towards demand-side management.
“Once the public transport share reaches its target of 25% by 2013 in the Klang Valley, we’ll implement demand management initiatives like congestion pricing and parking surcharges,” he said.
When contacted, Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin said as far as he was concerned, the ruling would not be enforced at the moment.
“We cannot afford to burden the people now, especially when our public transportation is still not up to par.
“If public transport has achieved its targets, then this law can be reconsidered,” he said.
WHEN the Land Public Transport Bill 2010 was tabled for its first reading at Parliament two weeks ago, it generated a lot of interest from various quarters.
The act, among others, introduces an area congestion pricing scheme for certain areas during peak hours.
It also spells out a fine of up to RM2,000 or six months imprisonment or both for those who fail to pay the charge.
However, certain parties have come out against the bill, asking if it will be enough to encourage motorists to switch to public transportation.
Association for the Improvement of Mass Transit Klang Valley (Transit) adviser Moaz Yusuf Ahmad said it was an important issue but, currently, many had no choice but to use their own vehicles.
He said the congestion fee was part of the Government Transfor-mation Programme beyond 2012/2013 but the concept had not been marketed properly, resulting in negative comments and concerns over its possible implementation.
“Currently, there is no incentive for those who use private vehicles to switch to public transport.
Gridlock: Most of the concerned parties agree that the public transport system must be improved before congestion charges are introduced.
“Naturally, questions will arise on how the government will implement and manage the system and where the fees collected will go.
“Motorists must be made to realise that public transport will mean less worries about double-parking, the jaga kereta menace and stress.
“Those who want the convenience of using their own vehicles during peak hours will have to pay for it, which is a fair deal. However, the root of the problem is still our public transportation system,” Moaz said.
He pointed out that the Kota Damansara-Cheras line, which was announced in 2006, had still not taken off four years later.
“The government cannot rely on building LRT lines alone as it takes time to set up the infrastructure,” Moaz said.
Instead, he champions the need for bus-rapid-transit (BRT) systems, which he says are an efficient and cost-effective means of moving a largest number of people on the road.
“Bus lanes have to be introduced and enforced and the entire bus system must be reorganised. Transit feels there should be a physical separation of the lanes,” he said.
A motorist, who only wished to be known as William, said he worked in Bukit Bintang and, despite having a monorail station nearby, chooses to drive to work.
According to him, there are not enough parking spaces at the monorail stations and he does not like the crowd in the trains.
“If the congestion fees are introduced, I might not drive but it depends on the quantum. If I can afford it, I will still drive,” William said.
Bukit Bintang MP Fong Kui Lun also thinks that congestion charges are not appropriate now as the public transport system is still fragmented.
“There are many destinations that the LRT and buses do not service. Congestion charges should only be introduced when between 50% and 70% of city folk use public transport,” he said, adding that in Japan, about 75% of its population used public transport.
Moaz felt that the congestion charges should only be imposed as a last resort. Instead, he suggested other options like increasing parking charges in various parts of the city or having tax charges for certain car registration plates.
“With congestion fees, the amount should be small enough to slowly encourage people to use public transport or carpool.
“Now, most cars entering KL only have one occupant. If we can increase the average to two per vehicle, we can halve the number of cars on the road,” he said.
However, not everyone is enthusiastic about carpooling, with Cheras MP Tan Kok Wai saying that it had been tried unsuccessfully in the past.
“I recently read an article that provided statistics on the use of public transport in the Klang Valley. In 1985, 34% of the population used public transport. Today, that number has dropped to about 10%.
“This just shows a failure of the system. About three-and-a-half years ago, Kuala Lumpur City Hall (DBKL) had organised a forum on a similar area congestion pricing scheme but rejected the idea after negative feedback,” he said.
“In many car-producing countries, cars are affordable yet many opt to use public transport because it is efficient.
“The Bill should be withdrawn and reintroduced when the time is right. More should be done for public transport first,” he added.
Taxi passengers may also have to pay more if the Bill is imposed on cab services.
Federal Territory and Selangor Taxi Operators Association president Datuk Aslah Abdullah said this was the case in Singapore.
“However, we do not know if taxis, which are considered public transportation, are covered by the Bill.
“I’m worried that if the Bill comes into place and bus and LRT services improve, no one will want to take taxis, as customers will the decide on the cheapest form of transport,” Aslah said.
Klang Valley Taxi Owners Association president Abdul Jalil Maarof also said any congestion fees should be reduced for public vehicles like taxis and buses.
In a speech prepared by Deputy Prime Minister Tan Sri Muhyiddin Yassin for the Asian Metrocity Summit 2010 early this month, he said the present Klang Valley public transport share was only 10% although the government planned to increase it to 13% by yearend.
In his text, Muhyiddin said the Government Transformation Roadmap reflected a policy shift towards demand-side management.
“Once the public transport share reaches its target of 25% by 2013 in the Klang Valley, we’ll implement demand management initiatives like congestion pricing and parking surcharges,” he said.
When contacted, Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal Abidin said as far as he was concerned, the ruling would not be enforced at the moment.
“We cannot afford to burden the people now, especially when our public transportation is still not up to par.
“If public transport has achieved its targets, then this law can be reconsidered,” he said.
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