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No Free Lunch

Traffic dilemmas

The issue of traffic congestion in Metro Manila’s streets has again assumed prominence in recent weeks, with seemingly contradictory moves from government and similarly contradictory sentiments coming from various sectors. Consider the following:

1. Industrialists, traders and various other actors in the trade supply chain see Mayor Joseph Estrada’s earlier move to ban cargo trucks from Manila’s streets during working hours as being anti-economy and anti-employment. Already, analysts expect a significant economic slowdown this year due to the choke on commerce that has resulted.

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2. The same stakeholders saw the crackdown on “colorum” (non-franchised) trucks by the Land Transportation Franchising and Regulatory Board (LTFRB) exacerbate the already bad situation, by further limiting the availability of cargo trucks. Truck rentals have reportedly been jacked up drastically—by more than P20,000 per trip in some cases.

3. When the LTFRB decided to grant a moratorium and extend the period for the “colorum” trucks to set their status aright, the Metropolitan Manila Development Authority publicly attacked the agency for being instrumental in congesting city traffic.

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4. The Department of Public Works and Highways has begun undertaking long-delayed but congestion-creating rehabilitation work on the 23-kilometer Epifanio de los Santos Avenue (Edsa), the country’s busiest thoroughfare. This is considered essential in light of the country’s hosting of the Asia-Pacific Economic Cooperation (Apec) meetings next year. The rehabilitation of the 39-year-old Magallanes interchange also started this week, further complicating Edsa traffic flows.

5. Lack of trucks to ferry containers has created serious port congestion that has led to the Port of Manila’s container yard being filled well beyond capacity, in turn causing significant delays in unloading arriving ships. Recently, up to seven ships were reportedly berthed and waiting idly to be unloaded. Some shipping lines have reportedly decided to stop calling at the Port of Manila henceforth due to the high cost of such delays.

6. Batangas and Subic ports have been upgraded to handle international cargo traffic, with nearly P17 billion in loans from the Japanese government early in the Arroyo administration, with the express goal of decongesting Metro Manila. This was in fact prominent in that administration’s 10-point agenda then. However, in what I have termed a colossal contradiction, that government allowed substantial capacity expansion at the Manila International Container Port. This led to the serious underutilization of the Batangas and Subic ports, which had seen only about 5-percent-capacity utilization since the completion of their respective upgrades some seven years ago.

There are certain interesting policy implications that have emerged from the above.

To take the cudgels of the trading community, the very idea of having to franchise cargo trucks comes under question. When you think about it, why do we even have to have “colorum” and “noncolorum” trucks? Isn’t franchising cargo trucks a superfluous regulation that only throws unnecessary hurdles in the way of business? Should cargo trucks be treated as a public utility when hiring them entails a bilateral contract between the cargo owner/shipper and the truck owner? It’s the natural lookout of the customer whether he/she gets the proper service for the price paid, and competitive market forces should ensure achievement of desired outcomes. It’s quite different, of course, in the case of passenger vehicles like buses, jeepneys, taxis, ships and aircraft (i.e., public conveyances). Could it be that our definition of “public utility” has become antiquated—based, in fact, on the archaic Public Service Act enacted by the Commonwealth government in 1936? Under that definition, ice plants and refrigeration facilities are actually considered public utilities. But technological change and contemporary economic realities could very well substantially narrow the list of what should be properly defined as public utilities, from how it was before. The implications of this are profound. One, it can release from regulation certain industries that by now don’t really warrant it. Two, such industries can effectively be opened to foreign ownership, which the Constitution still bars for public utilities.

Another interesting argument is that Mayor Estrada has actually done us all a service by calling attention to, and forcing action on, a key long-term solution to Metro Manila’s perennial traffic problem. I refer to the need to shift cargo traffic away from the Manila port, and toward the Subic and Batangas ports. The latter actually received ISO 9001:2008 certification for quality management systems last year. One Japanese shipping line has already opened a new direct service to the Port of Batangas. If more follow suit, impelled by the serious port congestion in Manila, we may yet finally break out of the chicken-and-egg problem of low utilization (in Batangas and Subic) due to higher shipping costs arising from lower shipping volumes handled there.

Finally, there is no substitute to actual reduction in automobile usage in the city to ease traffic flows. We need to take more creative and drastic market-based measures to discourage inefficient car use in city streets, such as London’s and Singapore’s steep congestion charges, Tokyo’s strict parking restrictions, mandatory car-free days, and so on. But first we need to do a good job at providing an efficient and comfortable mass transit system to effectively lure motorists out of their cars.

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E-mail: cielito.habito@gmail.com

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TAGS: asia pacific economic cooperation, Land Transportation Franchising and Regulatory Board, mayor joseph Estrada, Metro, news, traffic
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