Home Economics & PolicyAnalysis Can public transport go “public”?

Can public transport go “public”?

A poor structure, wasted public funds and free market excesses have depleted Lebanon’s transportation sector

by Sarah Hourany

The realm of ground transport is in upheaval. Increased need for affordable commutes to and from work is rooted to one side by higher fuel costs and on the other side by overall consumer price inflation and extreme cost-of-living hikes. People need to be economically active to earn a living, but if they cannot get to work or commuting to work costs too much, the economy becomes stifled in yet another way.

Enter the public transport system. A combination of climate issues, lifestyle changes wrought by Covid-19 lockdowns, and now this year’s alarming fuel price rises have been pushing many countries to rethink or boost established people mover systems.

In Germany this spring, the parliament approved a plan to temporarily cut transportation costs to ease the burden of the increasing global energy prices. Dubbed “9 for 90”, the 9-euro ticket can be used across Germany with all city and regional transport for a period of 90 days. The costly initiative – 2.5 billion euros was allocated by the Federal Ministry of Transport and Digital Infrastructure – sold some 21 million tickets between May and early July. 

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The 9-euro ticket and a parallel gasoline tax relief in the European economic powerhouse were designed as a stop-gap measure against swelling transportation costs and as an initiative to change mainstream commuter behaviors. But numerous other countries, notably smaller European Union members with visitor-friendly policies, have also been scaling up their public transport strategies. In Malta, public transportation will be free of charge from October, in a move to encourage better use and reduce congestion on the roads. Over in Luxembourg, public transport is provided at zero cost for citizens and tourists alike, setting a striking example of a country with free mobility.

The reality of an informal transport sector

On the contrary in Lebanon, public transportation is practically inexistent as a good provided by state, province, or municipality. The country’s current multifaceted crisis has triggered once again a debate over whether the economically crucial sector of ground transport should be reconstituted along old public bus and train operators, or newly designed in a public way. 

In the absence of an efficient public transportation system, Lebanon has long relied on private passenger service solutions. Private cars serve as the key vehicle for mobility, leaving the sector vulnerable to negative energy shocks. 

Periodic efforts of the bureaucratically endowed railway and public transport authority, known locally as the Office des Chemins de Fer et des Transports en Commun (OCFTC), manage to operate some public buses with the OCFTC logo in Beirut and its hinterland.

But in reality, low-income commuters, cost-conscious students and an ecologically-minded minority of Beirut urbanites have to resort to the entrepreneurial system of shared service taxis, or private bus and mini-bus operators, to avoid the luxury expense of an exclusive taxi. 

While for a long time the system comprised of ad-hoc service taxis (a “step to the curb if you want a ride” system) and unreliable private bus schedules, it generally met the transport needs of people without their own cars.

Yet inevitably, the free market spirit of the mass transportation sector translated into excesses of aggressive driving alongside incalculable safety risks which disadvantaged orderly, OCFTC operated buses. 

The latter at some politically opportune moments got support from public figures, which seemed to last as briefly as it was shallow, but then those buses quite literally started to fall apart while seeing less and less usage. 

Riding private new or used cars became the go-to option. They were deemed safer, more practical, more socially desirable, and thanks to bank loan offers, became more accessible too. In addition, subsidized fuel prices at the pump, and the slump in oil prices to around $50 per barrel between 2015 and 2020, boosted Lebanon’s private car craze.

However, the dilapidated state of public transport cannot be attributed solely to Lebanon’s love affair with personal wheels, or the government’s populist policies in which they transferred international oil price falls onto the consumers – a move criticized at the time by visiting International Monetary Fund delegations.

In reality, it stems from the fragmented and overlapping tasks designated to various governmental and institutional authorities, and the lack of coordination among these entities. This was highlighted by a Lebanese American University report in 2014, titled “Sustainable Transport; Grouped Publication”. Weak management, low levels of accountability and inter-ministerial friction were natural consequences of this absolute chaos, points confirmed in the National Environmental Action Plan issued by the Lebanese Ministry of Environment in 2005. Today, instead of striving to become sustainable, the sector seems to have reached a point of no return and struggles to stay functional. 

This mal-organized situation is causing significant economic losses, and the elevated cost of transportation is impacting citizens’ mobility, according to the transport economist and planner Dr. Mazen Omran. Skilled workforce is not well-linked to employment locations and students are not appropriately connected to schools and universities, Omran says. He also believes this is impacting productivity rates and human capital formation. Even worse, the whole economic activity is paralyzed; taking a toll on already sinking government revenues according to Ziad Nasr, the head of the Railway and Public Transportation Authority (RPTA).

The railway sector: time for a revival?

The railway network was originally established in the 1890s mainly to link Beirut and Tripoli to Syria, Iraq, Turkey and Europe, through the efforts of local and French businessmen.  On June 6, 1956, the Lebanese state regained ownership of the railroads under the name “Chemin de Fer de l’État Libanais” (Lebanese State Railways). Then on April 14, 1961, the Office des Chemins de Fer de l’État Libanais et du Transport en Commun de Beyrouth et de sa Banlieue (Lebanese State Railway and Public Transportation Authority for Beirut and Suburbs) was formed under Decree 6479. Its name was later changed to what we know today, Office des Chemins de Fer et des Transports en Commun.

However, like most of Lebanon’s post-civil war infrastructure, the railway service suffered great losses and its operations gradually declined until it ceased completely in the early 1990s. After that, many parts of the railway were encroached upon by buildings or highways.

The OCFTC, a public institution established in 1961 under the Ministry of Public Works and Transport, remained the sector’s management authority. A semi-independent legal identity with financial and administrative autonomy, the OCFTC is formed of two departments: the Railways Directorate and the Bus Transport Directorate.

As opposed to public perception, there are no employees in the Railways Directorate, Nasr tells Executive: “Policymakers tend to think that there is no need for employees unless the train stations are fully operational.” Nasr argues that the creation of a new public transport system requires both local human resources and international input. 

“The planning on all levels requires skilled staff,” Nasr says, before adding that there is a major need for international technical guidance to build capacity. On top of technical assistance from foreign institutions, involvement by the private sector is also a must, according to Nasr. Either in the form of public-private partnerships (PPP), build-operate-transfer (BOT) or foreign direct investment (FDI); to share risks and enhance productivity, provided there is political stability.

Earlier this year, caretaker Public Works and Transport Minister Ali Hamieh discussed with a French transport company, Alstom SA, the restoration of three railways under a BOT contract.  Potential rail projects for freight or public transport have been repeatedly brought up at different moments since they became inactive some 30 years ago.

Under the latest attempt to rebuild rail infrastructure and bring some relief to the roads, the first suggested rail line would link Beirut Rafic Hariri International Airport to Abboudiye on the northern border with Syria, while passing through the ports of Beirut and Tripoli. The second would connect the airport to the Masnaa border crossing, and the third would function from Riyak in the Bekaa valley to the Syrian city of Homs.

“The revival of the railway sector is a must, but it requires a feasibility study that takes into account the new economic and urban realities and needs,” Nasr says. “The priority will be given to the coastline connecting Beirut and Tripoli ports.” In February this year, Hamieh announced that Spain will be financing a comprehensive master plan for the 407-kilometer-long railway, in a bid to revive it.

Bus network: a feasible option?

Earlier this year, on May 23, France offered 50 buses to Lebanon to support the rehabilitation of the road sector, as per an agreement between the French and Lebanese Public Works and Transport Ministers signed on March 10 at the Grand Serail in Beirut. This grant comes on top of a prior initiative by the French shipping company CMA CGM which repaired 45 public buses damaged by the Beirut blast, as per a statement by the company. 

Asked about the status of the French buses, Nasr explained that various operational obstacles are still in the way. Fuel oil suppliers and spare parts distributors request cash payments in fresh dollars, while public institutions are legally obliged to meet their financial obligations in Lebanese Pounds. “Exceptional times need exceptional measures,” he says.

But supplier demands aside, the work morale and room for performance of the 150 employees in the directorate remains questionable, given that they are earning a monthly salary worth $45 on average. Currently, 6,400 buses and mini vans with legal plates are operational, while illegal plates amount to double this number, Nasr says. They operate without specific schedules and do not use dedicated lanes. In addition, these buses compete over the same lines in the cities, while they are almost inexistent in remote areas, rendering their services inefficient. As well as this, the vehicles do not undergo regular maintenance, posing a serious safety threat. 

The Lebanese transportation sector: a need for the country’s economic rebound

If Lebanon’s economy is to rebound, the transportation sector should be at the core. Omran says the sector is not close to topping the list of urgent PPP projects or privatization discussions, and emphasizes that a transport policy should be agreed upon irrespective of politics. “Jumping between transport projects that are politically driven without an overarching transport policy will not get the country anywhere,” he says. “The transportation sector can play a monumental role, specifically in the current unprecedented economic crisis; if public transport is promoted and implemented, as it provides a real alternative and cheaper option to private cars.”

By Omran’s estimate, several hundreds of millions of dollars are required to create public transport choices to meet the needs of people and enterprises, because the current road and rail infrastructure are not suitable for any transport scheme. “Private finance via the World Bank, European Investment Bank and European Bank for Reconstruction and Development should have a role to play, but without a clear strategy it would be challenging to attract any PPP.”

 Various research studies published in international academic journals confirm that countries with good infrastructure attract more FDI. As a matter of fact, transport infrastructure that includes components such as roads, runways, ports, airports, and railways, among others, contribute to decreasing the cost of doing business, and subsequently enhancing FDI. 

However, the nature of public transport is undergoing fundamental changes; reflected by the current planning of infrastructure and mass transit projects. The arrival of digitized private transport along with the avalanche of ride hail apps is a cautionary tale on the importance of designing public transport in long-term social and sustainable manner, particularly in light of a recent investigation into Uber, which revealed lobbying and falsifications as it expanded out of the United States.

Drone deliveries and driverless trucking systems, in addition to new remote working traditions, have to be integrated into the negotiations of decision makers. In Germany, for instance, public transport is highly organized, but also involves endless regulations and interlaced public, private, and privatized operators. As such, allowing for ride-share taxis a few years ago required an overhaul of the law, while initiating a summer solution like the nine-euro ticket needed the buy-ins of states and massive bureaucratic adjustments. 

By contrast, the arrival of ride-hail apps to Lebanon did not visibly disrupt the existing sector. Lebanon’s massively informal public transport sector and absence of state capacity to manage it, in addition to the technical alertness and entrepreneurial drive of its innovators, such as entrepreneurship hub tech workshops, could mark a perfect starting point to engineer new modes of public transport. The development of such modes, as PPPs or otherwise, are urgently needed to avoid a worsening of this integral sector. What is more, if successive governments had taken precautionary actions, less investment would be needed today. Although, according to Nasr, it is better late than never.

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Sarah Hourany

An economist, journalist and social entrepreneurship expert.

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