Increasing of BUS FEE and Financial Situation of BMTA

8/8/2019 Increasing of BUS FEE and Financial Situation of BMTA

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Environment - Social - Economic Issues

on

Increasing BMTA Bus Fares

Mr. Panom Parinya Energy. T.&M. 48910402

Mr. Witawin Kaewbuddee Envi. T.&M. 48910602

JEE 623 Energy and Environmental Economics and Policy

Joint Graduate School of Energy and Environment

King Mongkut's University of Technology Thonburi

12 September 2005


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1

Contents

Environment - Social - Economic Issues on Increasing BMTA Bus Fares .................. 2

1. Introduction........................................................................................................... 22. Objective ...............................................................................................................2

3. Scope of Study....................................................................................................... 34. Executive Summary............................................................................................... 3

BMTA History........................................................................................................3

Organization ...........................................................................................................3

BMTA Plans ...........................................................................................................4

Business Summary..................................................................................................5

Bus fare structure....................................................................................................8

Profit (loss) .............................................................................................................9

Services ................................................................................................................10Core Problems ......................................................................................................12

Strategies and Policies ..........................................................................................13

Statement Report ..................................................................................................14Bangkok bus service and passenger satisfaction....................................................14

5. Data Analysis and Result .....................................................................................16

Methodology ........................................................................................................16

Revenue report.....................................................................................................16

Expense Report.....................................................................................................18

Study Framework..................................................................................................24

Economic Scenario analysis..................................................................................26Environmental Scenario Analysis..........................................................................27

6. Conclusions ......................................................................................................... 29

7. Discussions.......................................................................................................... 30

8. References........................................................................................................... 33


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Environment - Social - Economic Issues on Increasing BMTA Bus Fares

Date: 12 September 2005

Witawin Kaewbuddee and Panom Parinya

The Joint Graduate School of Energy and Environment , King Mongkuts University ofTechnology Thonburi, Bangkok, Thailand

Abstract: This report presents economic, social and environment consequences concern

BMTA business that is caused by the sharply rising diesel price. At present, BMTA has

been slated for transfer to the authority of the Bangkok Metropolitan Administration

(BMA) due to governments policy to improve deficit business. Cost of oil price is one of

major impacts in BMTA business. Twenty percent of expenses are cost of fuels. So, to

recover deficit situation, policies as well as strategies have been imposed. Inevitably,

increasing bus fare is used for emergency situation. Its simple tactic to increase revenue.But this policy impacts passengers directly.

1. Introduction

Energy is a production factor of the commercial and industrial sectors. Thai government

has been imposed increasing domestic fuel price respect to current high world crude oil

price. This action effects directly on transportation sector such as BMTA.

Gasoline, diesel, is a main factor of transportation service business. Bangkok Mass TransitAuthority (BMTA) which provides transport services has effected directly from higher

diesel price. Unfortunately, current financial of BMTA is in drawback. Therefore, thosesituations will drive BMTA business to be declined. To stabilize business, many strategies

are implemented. Absolutely, increasing bus fares is one of main strategies which can be

introduced effortlessly respect to emergency conditions.

BMTA provides vital services in urban areas, but at the same time, causes serious urban problems. The

negative effects of urban transport activities include air pollution, accidents, congestion, noise from roadtransport, energy consumption, and consumption of land and other natural resources for the productionof vehicles and infrastructure. In addition, urban transportation is one of the most significant sources of

carbon dioxide emissions (CO2), which cause climate change. The most serious environmental effect of

transportation is air pollution. Plans to reduce these negative impacts within Bangkok and vicinity areneeded urgently.

2. Objective

The main objectives are to facilitate a better understanding of factors affecting bus fares

and study consequences on economic, social and environment subject to increasing BMTA

bus fares due to sharply increasing fuel price. There are general economic tools are applied:

demand and supply, social costs and benefits, and externalities.


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3. Scope of Study

1. This study focuses on rising oil price which rouses increasing BMTA bus fares.

2. Data for analysis is gathered from BMTA. Passenger satisfaction information is based onprevious projects which are collected from web sites.

3. Study areas are Bangkok and vicinity.4. The consequences will be presented on economic, social and environment aspect with

both before and after bus fare adjustment.

4. Executive Summary

BMTA History

Bus services were first introduced to serve commuters in Bangkok in 1907. Originally,transport service was provided by horse-drawn carriages and later by three-wheeled Ford

motorcars with two long parallel benches for seating. This public transport proved very

popular, and by 1933, bus services were available virtually throughout major areas of thecapital. Service expanded as the city and its population grew. Several new companies

entered the field. Bus routes grew in number and length and became more complicated.

However, as traffic became more congested, private bus services proved unequal to rising

public expectations. During the years 1973-1975 the country was hard hit by a high

inflation rate. Bus operators began to demand increase in fares. Eventually, the government

decided to take over the task of providing mass transit services. It names "Mahanakhon

Transport Company Limited", began in October, 1975, as a non-profit company.

Unfortunately, due to certain legal constraints and a change in the government, the

Mahanakhon Transport Company Limited was soon scrapped. In August, 1976, the

"Bangkok Mass Transit Authority (BMTA)" was established by a Royal DecreeEstablishing the Bangkok Mass Transit Authority, B.E. 2519.

Organization

Fig 1 shows organization chart of BMTA.

BMTA consists of 3 departments as the following.

1. The Department of AdministrationThe Department of Administration is responsible for personnel administration, finance,

internal administrative affairs and coordinating with other Departments. Deputy Director of(Administration) is the superior and responsible for management and reports to the Director

directly.

2. The Department of Bus OperationThe Department of Bus Operation is responsible for bus services, supervise planning of bus

operation, maintenance of buses to make profit from bus fare revenue according to target

set, to control expenditures according to budget giver and coordinating with other

departments, Deputy Director of Bus operation is the superior and reports to the Directordirectly.

3. The Department of private Co-Bus Operation

The Department of Private Co-Bus Operation is responsible for planning, arrangement joint

private of bus operation, control, examine bus operation and payment of fees according to

contract of concession, Deputy Director of Private Co-Bus Operation is the superior and


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report to the Director directly.

Fig. 1 shows organization chart of BMTA.

BMTA Plans

Bus Services

1. To Operate Bus Services guarantees the time of coming and arriving of night shift

bus between a starting point - a destination and crowed passenger point.

2. To Operate bus services connectedly on 8 routes. Which run on annular route andincrease amount of bus as demand of passengers?

3. Bus for School by setting up 4 bus routes services for only student.

4. Project of park and ride by setting up 4 places per year in BMTA's depot, thedepartment store and general place for parking of personal car to get on bus.

5. Issue of advance ticket sold to passenger. There are 3 kinds of tickets: the ticket for

use all day, monthly and yearly. This program has launched since fourth month of

first year.

6. To use system of automatic fare collection on potential route since second year goes

on. So that BMTA can reduce expenditure 500 Baht/bus/day.

7. To increase 41 air-condition bus services on the private route since second year

next and fourth year to increase 166 non-air condition bus services on private route

again.

Increase in management efficiency

1. Enhancement of development bus service with ISO 9001:2000 quality managementsystem. Which BMTA will take less 24 bus routes into system of ISO 9001 : 2000 quality

management by 2002 year will get the certificate of ISO 9001 : 2000 25 routes first.

2. Issue of connected ticket which can use with other public transit for example passenger

can use the ticket with BMTA's bus, BTS and MRTA.


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5

Business Summary

Bus Operations in Fiscal Years 1992-2002

Number of Passengers per day during Fiscal Years 1992-2003 (Year 2001, during October

2000 - July 2002)Unit: person per day

Table 1 shows a number of passengers year 1992 2003.

Type

Fiscal Year

Air

ConditionedBus

Regular Bus Total

1992 253,605 3,820,278 4,073,883

1993 426,440 3,360,663 3,787,103

1994 483,860 3,022,395 3,506,255

1995 548,453 2,831,131 3,379,584

1996 581,856 2,743,496 3,325,352

1997 688,142 2,664,412 3,352,554

1998 814,182 2,366,444 3,180,626

1999 1,123,083 1,805,892 2,928,975

2000 1,215,083 1,596,357 2,811,440

2001 1090099 1480557 2,570,656

2002 1123242 1401931 2,525,173

2003 1,261,399 1,125213 2,386612

Air-Conditioned Buses (1992-2003)

Fig. 2 shows a number of passengers of air-conditioned buses.


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Fig. 3 shows a number of passengers of regular buses.

BMTA. Work Force, As of July 2004 : 18,725

1 Executive and Office Staff 2,673 14 %

2 Dispatchers & Inspectors 1,563 8 %

3 Drivers 7,155 38 %

4 Bus Conductors 7,334 40 %

18,725 100

November 2004

Fig. 4 shows BMTA workforce.

Regular Buses (1992-2003)


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Table 2 No. of buses and Routes, As of July 2004.

No. of Buses

1 BMTA. Buses 3,590 23 %2 Joint Service Buses 3,331 21 %

3 Minibuses 1,157 7 %

4 Small buses plying lanes 2,045 13 %

5 Van Buses 5,555 36 %

Fig 5 No. of buses and Routes, As of July 2004.

Table 3 No. of Routes.

No. of Routes

1 BMTA. Buses 102 24 %

2 Joint Service Buses 104 24 %

3 Minibuses 48 11 %

4 Small buses plying lanes 104 24 %

5 Van Buses 116 28%

" Minibuses ply the same routes as BMTA buses and joint-service buses."


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Fig. 6 No. of Routes.

Bus fare structure

Table 4 shows bus fare structure.

Cream-red Rent Buses Ord inary A ir Buses NGV Buses Long A ir Buses EURO II 797 EURO II 500

1. Average tickets / bus / day

1.1 tickets / bus / day 726 682 417 328 641 460 480

1.2 coupon / bus / day 2 2 2 2 2 2

2. Expenses of buses (baths/bus/day)

2.1 Leasing of buses 568.44

2.2 Buses Maintenance by Contracts 1236.75 1461.18 1766.07 1872.5 1698.01 1612.03 1475.262.3 Salaries and Benefit

- Driver 1023.08 1018.79 991.45 980.63 1019.15 999.48 1002.15

- Bus conductor 797.1 794.91 778.87 771.54 798.77 786.06 788.05

2.4 Fuel and Gases 1899.94 1864.88 3121.76 1666.2 4167.94 3153.56 3313.94

2.5 Depreciation (from Operating) 18.14 18.14 373.17 18.14 1813.79 1336.1 1247.15

2.6 Interest Expenses from BMTA 979.58 929.27 1012.67 172.31 1208.98 1136.53 1631.34

2.7 Other Expenses 1521.58 1521.58 1593.1 1593.1 1593.1 1575.54 1575.54

Total Expenses 7476.17 8177.18 9637.08 7074.42 12299.73 10599.32 11033.43

% Expense 11.28 12.33 14.54 10.67 18.55 15.99 16.64

All Expenses of buses

- /bus/day 7476.17 8177.18 9637.08 7074.42 12299.73 10599.32 11033.43

- /trip 797.88 831.01 1366.96 1276.97 2029.66 1118.07 1105.55

- /km. 33.83 35.19 38.78 31.67 55.02 40.33 39.82- /ticket 10.27 11.99 23.01 21.45 19.13 22.95 22.9

Expenses of buses (exclude 2.5 , 2.6)

- /bus/day 6478.45 7229.77 8251.24 6883.97 9276.97 8126.68 8154.95

- /trip 691.4 734.73 1170.39 1242.59 1530.85 857.25 817.13

- /km. 29.31 31.11 33.2 30.82 41.5 30.92 29.43

- /ticket 8.9 10.6 19.7 20.87 14.43 17.6 16.93

Expenses of busesRegular Buses Air-conditioned Buses


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Balance sheet

Table 5 shows balance sheet.

Bangkok Mass Transit Authority

Balance Sheet

as ofMarch 2005Particulars (Million Baht)

1. Assets

1.1 Current Assets 659.600

1.2 Land,Building and Other Assets 5,310.714

1.3 Other assets 80.685

Total Assets 6}050.999

2. Liabilities and Shareholders

2.1 Liabilities

2.1.1 Current Liabilities 13,349.89

2.1.2 Long-term Liabilities 25,113.134

2.1.3 Other liabilities 84.953

Total Other Liabilities 38,547.976

2.2 Government Budget

2.2.1 Equity 11,477.557

2.2.2 Accumulated Loss (43,974.534)

ToTal Equity (32,496.977)

3. Total Libilities and Equity 6,050.99

Profit (loss)

Table 6 shows profit(loss).

Bangkok Mass Transit Authority

Profit (Loss)

March 2005

Particulars (Million Baht)

Revenues

Revenues from fares

Regular Buses 144.041

Air - conditioned Buses 336.931

Revenue from of coupon 2.439

Revenue from Monthly ticket sales -

Revenue from Joint Air-conditioned buses 8.579

Revenue from Joint Air-conditioned Vans 5.531

Revenue from Join fee and other 2.086

Revenue from Mini Buses 0.316


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Other Revenues 5.301

Total Revenues 505.226

Expenses

Salaries and Benefit 317.594

Fuel and Gases 179.269

Leasing of buses 1.577

Buses Maintenance by Contracts 145.970

Over Buses 's Kilomters Expenses 4.340

Leasing of premises 9.866

Value-added Taxes 24.369

Interest Expenses from BMTA 123.414

Depreciation (from Operating) 65.412

Other Expenses 48.446

Total Expenses 920.258

Net Profit (Loss) (415.032)

Less Depreciation (Management) 65.412

Less Interest Expenses from BMTA 123.414

Net Profit (Loss)( Interest and Depreciation not Included)(EBIDA) (226.206)

Services

Types of Buses and Fares

Table 7 shows types of buses and fares.

Type Bus Color Fare Service Time

Regular bus Cream-Red 5 baht 05.00 - 23.00 hrs.

Regular bus White-Blue 6 baht 05.00 - 23.00 hrs.

Expressway bus Cream-Red 6.50 baht 05.00 - 23.00 hrs.

All-night service bus Cream-Red 6 baht 23.00 - 05.00 hrs.

Air conditioned bus Cream-Blue 9 11 13 15 17 baht

(depending on thedistance traveled)

05.00 - 23.00 hrs.

Air conditioned bus

(10 meters)

White-Pink 10 baht 04.30 - 22.00 hrs.

EURO II bus Yellow-

Orange

11 13 15 17 19 21 baht

(depending on the

distance traveled)

05.00 - 23.00 hrs.

Minibus (on main

road)

Green 4.50 baht 05.00 - 23.00 hrs.

Minibus (plying Soi) Red Maroon 4.00 baht 06.00 - 21.00 hrs.


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Fare Exemptions and Concessions

Table 8 shows exemptions and concessions.

The following passengers are eligible for bus fare exemptions:

1. BMTA bus inspectors2. Buddhist monks and novices

3. Mailmen in uniform while on duty

4. Holders of BMTA employee ID cards

5. Holders of official certificates or medals specified in the

Regulation on Bus Fare Exemptions

Half-Price Concessions

Table 9 shows half-price concessions

The following passengers are eligible for half-price fares when using the

service of regular buses.The following passengers are eligible for half-price

fares when using the service of regular buses.

1. The blind with a certificate from the Association of the Blind

2. Soldiers and policemen in uniform

3. Holders of official certificates or medals as specified by the Regulation on

Bus Fare Concession at the exact rates specified by the Transport Control

Victory Medal (Off-spring of holders of this medal are also entitled.)

European Royal War Medal

Border Service Medal

Free-Man Protection Medal

Non-active War Veterans Classes 1 2 3 and 4

Fare Concessions for Air-conditioned Buses

Holders of the following official certificates and medals areeligible for air-conditioned bus fare reductions:

1. Victory Medal (Off-spring of holders of this medal are also

entitled.)

2. Border Service Medal

3. Free-Man Protection Medal

4. European Royal War Medal

5. Non- active War Veterans Classes 1 2 3 and 4

6. BMTA Employee ID Cards


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Concessions

Regular Fare Reduced Fare

9 Bath 6 Bath

11 Bath 7 Bath13 Bath 9 Bath

15 Bath 10 Bath

17 Bath 11 Bath

19 Bath 13 Bath

21 Bath 14 Bath

23 Bath 16 Bath

Core Problems

Business of BMTA has been worse off up until now. The cause of problems can be

concluded as the following:

1. Bus fare by which is imposed by the government is underestimated. Bus service isfocused on providing good services for passengers rather than make a profit. As aresult, there is no income to cover business expenditures. Business has been out of

pocket.2. There is less satisfaction of passengers. BMTA can not provide better services for

passengers. Thus, passengers decide to choose other services such as car, van car,

and taxi.3. There are many limited conditions for private bus operator to concede due to factorsboth internal and external of BMTA such as underestimate bus fare, high standard

of bus, financial loan services, and others. Private bus operators still have taken old

bus from BMTA to join their business.

4. BMTA has a lot of maintenance costs each year. At present, BMTA is still in dept.This kind of cost will be increased each year.

5. And, also BMTA has high rent cost of offices and garages.6. Traffic jam is one problem that stimulates less revenue but increase high cost of

fuel, wages, and overtime cost.


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Strategies and Policies

To survive from deficit and can run business without government subsidies, BMTA has

been launched business strategies and policies to recover those problems as the following:1. BMTA is having a plan to improve standard of bus ser vices such as use new bus,

improve old bus, partnership, air-condition bus, bus rapid transit, etc.2. Private operators should be released from the BMTA sub-licenses and BMTA's

regulatory power should be removed.

3. BMTA have a plan forced to reduce operating costs.4. BMTA's historical, accumulated debt should be transferred to the government.5. A new competent regulatory body, independent of operation will be set up to

monitor, plan and regulate all modes of public transport.

6. There is no competition in the current bus system since private operators mustfollow the routes, timetables and fares dictated by BMTA. Ultimately the privateindustry need to be restructured and consolidate to hold route franchises and take

over responsibility for service development.

7. To promote and develop marketing system and good customer relationship.8. BMTA will obtain bus management by objective (MBO).9. BLMT will improve quality of services such bus preventive maintenance, pollution,

etc.

To support above strategies and policies, BMTA has launched 3 sub-plans which are foryear 2002-2006 as the following.

1. Quality of bus services plan2. Increase service efficiency and organization improvement plan3. Plan of financial system improvement


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Statement Report

BMTA started business with used bus from private company about 2,703 buses and

compensate cost 370 billion baht. Thai government allocated money for BMTA 329.20billion baht. Therefore, BMTA has deficit 40.80 billion baht. BMTA has never been surplus

due to expenditure is greater than revenue. This table show financial report from year 1977-2004.

Table 10 shows statement report.

Year Income Expediture Profit(deficit)

2520 622.923 870.633 -247.710

2521 1058.229 1438.311 -380.0822522 1421.256 1898.256 -477.000

2523 1777.383 2523.348 -745.965

2524 2524.497 3344.300 -819.803

2525 2965.012 3939.781 -974.769

2526 3137.775 4214.242 -1076.467

2527 3064.176 4303.742 -1239.566

2528 3458.237 4558.071 -1099.834

2529 3142.717 4368.748 -1226.0312530 3216.900 4129.800 -912.900

2531 3397.739 4164.840 -767.1012532 3839.862 4723.434 -883.572

2533 4069.886 5039.161 -969.275

2534 5029.460 5254.223 -224.763

2535 6402.827 6341.237 61.590

2536 6363.202 6962.823 -599.621

2537 6198.353 7097.117 -898.7642538 6395.298 8222.111 -1826.813

2539 6473.178 8599.889 -2126.7112540 6682.385 9153.212 -2470.827

2541 6734.634 9463.192 -2728.5582542 7035.969 9477.638 -2441.669

2543 7054.938 9944.113 -2889.175

2544 7081.884 10405.073 -3323.189

2545 6977.557 10294.498 -3316.941

2546 6458.475 10917.264 -4458.789

2547 5965.771 10654.861 -4689.090

Bangkok bus service and passenger satisfaction

Currently, there are two main changes likely to occur in the Bangkok Mass Transit

Authority (BMTA):

The BMTA has been slated for transfer to the authority of the Bangkok

Metropolitan Administration (BMA). This would reform the system in the

capital to resemble other major cities in which the municipal government

takes care of public transport rather than the central government. However,

BMTA employees have requested that their organization remain a stateenterprise.


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Regarding fare adjustments, it is likely that, under the IMF bail-out package,

the government will have to abandon transport subsidies. Fares will then

reflect the actual costs.

Passenger vans took away operators revenue. The government must deal

with them seriously.

The BMTA is having a plan to modify of their buses to use natural gas.

Results

1) Most of the respondents expressed great satisfaction with the private air-conditionedMicro-bus services. This suggests that riders consider quality as well as fare whenmaking travel decisions.

2) Riders consider quality as well as fare when making travel decisions.3) The polled Bangkokians agreed with the proposed transfer of the BMTA to

municipal control, expressing the belief that services would thereby be upgraded.

4) Although there are about 2,671 mini-buses in Bangkok, only 1,400 are still

operating. The concessions of the rest have been terminated.5) Mass Transit Authority (BMTA), approved a request by the Mini-Bus Operators'

Association to increase their fare rates from Bt 2.50 to 3.50, on condition thatservice quality and conditions also be improved.

6) Problems cited concerning mini-buses included crowding, lack of ventilation, worn-out, poorly maintained buses, reckless, impolite drivers, impolite conductors, and

failure to stop at required bus-stops.

7) After the fare increase, 45.5 percent of those polled said they would now be lesslikely to use mini-buses and would probably hold out for BMTA services. However,

54.5 percent said they would continue to use mini-buses since they had no choice.

8) All Bangkok buses will get TVs, if the Bangkok Mass Transit Authority (BMTA)gets things its way.

9) Bangkok buses will carry English-language signs from next month on, the directorof the Bangkok Mass Transit.

10) By raising fares by Bt1, operators would still face losses.11) the Bangkok Mass Transit Authority's launching of the women-only Lady Bus.12) the BMTA said it would consider transferring more routes to private bus services

this year in a bid to reduce its accumulated debt of 20 billion baht.

13) plans to transfer the bus agency to the Bangkok Metropolitan Administration(BMA) made little progress because of the BMTA's financial problems.

14) BMTA staff fear loss of jobs and welfare benefits and have called for the transfer to

be scrapped.15) Operators of city and inter-provincial buses yesterday sought governmentpermission to increase their fares.

16) Bus operators had no other choice but to increase fares or stop their services.17)The government has approved a new fare rise for public buses in Bangkok and

those running across provinces.

18)The new fare rise is based on a key condition that the local bus operators mustimprove their services.


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By this information, major revenues of BMTA come from the Air-conditioned buses and

regular buses as presented in Fig. 8, about 96 percent of total revenues. There are notable

that the revenue from coupon has vastly decrease when compare between this year (Oct04-

Jul05) and the year before (Oct03-Sep04) as shown in Fig.9.

Fig.8 shows total revenues October 2004 to August 2005.

Fig. 9 shows revenue of BMTA.

Total Revenues Oct04 - Aug05 1.2 Revenuefrom of coupon0%

1.3 Revenue from

Monthly ticket sales

0%

1.7 Other Revenues

1%

1.4 Revenue from Joint Air-

conditioned buses

2%

1.6 Revenue

from Mini Buses

0%

1.5 Revenue from Joint Air-

conditioned Vans

1%1.1.1 Revenues

from regular buses

30%

1.1.2 Revenues from Air-

conditioned buses

66%

1.1.1 Revenues from regular buses 1.1.2 Revenues from Air-conditioned buses

1.2 Revenue from of coupon 1.3 Revenue from Monthly ticket sales

1.4 Revenue from Joint Air-conditioned buses 1.5 Revenue from Joint Air-conditioned Vans

1.6 Revenue from Mini Buses 1.7 Other Revenues

Revenues of BMTA

0

100

200

300

400

500

600

700

Oct-0

3

Nov-03

Dec-03

Jan-0

4

Feb-

04

Mar

-04

Apr-0

4

May

-04

Jun-0

4

Jul-0

4

Aug-04

Sep-04

Oct-0

4

Nov-04

Dec-04

Jan-0

5

Feb-

05

Mar

-05

Apr-0

5

May

-05

Jun-0

5

Jul-0

5

1.1.1 Revenues from regular buses 1.1.2 Revenues from Air-conditioned buses

1.2 Revenue from of coupon

Million Baths


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Expense Report

Total Expenses Oct04 - Sep05

2.8 Value-added

Taxes, 238.889, 3%

2.2 Fuel and Gases,

1,792.774, 20%

2.4 Buses

Maintenance by

Contracts,

1,437.278, 16%

2.10 Depreciation,

666.555, 7%2.9 Interest

Expenses from

BMTA, 1,209.266,13%

2.7 Leasing of

premises, 100.897,

1%

2.11 Other Expenses,

240.065, 3%

2.1 Salaries and

Benefit, 3,351.522,

37%

2.1 Salaries and Benefit 2.2 Fuel and Gases2.3 Leasing of buses 2.4 Buses Maintenance by Contracts

2.5 Over Buses 's Kilomters Expenses 2.6 Buses Maintenance

2.7 Leasing of premises 2.8 Value-added Taxes

2.9 Interest Expenses from BMTA 2.10 Depreciation (from Operating)

2.11 Other Expenses Fig. 10 shows expense report.

This graph shows that there are 5 descend main factors influence total expense namely

expense of salaries and benefits, expense of fuels and gases, expense of buses maintenance

by contract, interests expenditure subject to BMTA and depreciation costs, respectively.

Comparison Expenses of BMTA Oct03 - Sep05

2.1 Salaries and Benefit

2.2 Fuel and Gases2.3 Leasing of buses

2.4 Buses Maintenance

by Contracts

2.7 Leasing of premises

2.8 Value-added Taxes

2.9 Interest Expenses

from BMTA

2.10 Depreciation

(from Operating)2.11 Other Expenses

0

200

400

600

800

1000

1200

Oct-

03

Nov-

03

Dec-

03

Jan-

04

Feb-

04

Mar-

04

Apr-

04

May-

04

Jun-

04

Jul-

04

Aug-

04

Sep-

04

Oct-

04

Nov-

04

Dec-

04

Jan-

05

Feb-

05

Mar-

05

Apr-

05

May-

05

Jun-

05

Jul-

05

2.1 Salaries and Benefit 2.2 Fuel and Gases 2.3 Leasing of buses

2.4 Buses Maintenance by Contracts 2.7 Leasing of premises 2.8 Value-added Taxes

2 .9 Interes t Expenses from BMTA 2.10 Depreciation (from Operating ) 2.11 Other Expenses

Million Baths

Fig. 11 shows comparison expense.

This graph depicts comparison expenses of BMTA from October 2003 to July 2005. There

are three interested factor relevant to BMTA expenses. First, cost of buses leasing is

decreased dramatically at October 2004. After this period, there is cost of depreciation is

emerged and tends to increase gradually. Second, at period November 2004, cost of salaries


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and benefits increased which contributed to increase total expenditures. Finally, at February

2005, fuels and gases expenses are increased which stimulated total expenses too.

In fact, BMTA financial balance is not surplus for along time. Through, cost of fuels and

gases is decreased to normal level. it will minute effect to deficit. In the other hand, if cost

of fuels and benefits is increased exponentially, it will contribute to dramatically increasedeficit. To relieve deficit, only increasing revenue should be considered due to other factorsare difficult to deal with. Next section is about parameters effects to increasing revenue and

reducing loss.

2.1 Salaries and Benefit

2.1.1 Salaries and hire

cost

76%

2.1.8 Rate of promotion

4%

2.1.10 Welfare

6%

2.1.7 allowance premium

4%

2.1.5 Holiday

compensated

2%

2.1.2 Hire cost by contract

0%

2.1.3 Board Premium

0%2.1.4 Overtime cost

1%

2.1.9 Commission of

ticket agency0%

2.1.11 Retirement

allowance

5%

2.1.12 Providen Fund

2%

2.1.1 Salaries and hire cost 2.1.2 Hire cost by contract 2.1.3 Board Premium

2.1.4 Overtime cost 2.1.5 Holiday compensated 2.1.6 Work premium

2.1.7 allowance premium 2.1.8 Rate of promotion 2.1.9 Commission of ticket agency2.1.10 Welfare 2.1.11 Retirement allowance 2.1.12 Providen Fund

Fig. 12 shows salaries and Benefits.

The most impact of total expense is cost of salary. It is fixed cost about 76 percent. Toimprove deficit, this factor must be focused on.

BMTA has ever adjusted bus fare 4 times during year October 2003 to July 2005. Due to

the other factors are difficult to implement.


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Changing of Factors influence to Revenues ( /bus/day)

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Oct-

03

Nov-

03

Dec-

03

Jan-

04

Feb-

04

Mar-

04

Apr-

04

May-

04

Jun-

04

Jul-

04

Aug-

04

Sep-

04

Oct-

04

Nov-

04

Dec-

04

Jan-

05

Feb-

05

Mar-

05

Apr-

05

May-

05

Jun-

05

Jul-

05

Total Revenues from fares Total trip (trips) kilometers

Fuel (liters) Gas (Q.M.) Total tickets

Oil price (baths/L) Index of Ticket price

% change from mean value

12 3

Red bus rise up from 3.50 to 4

Airbus rise every 4 km. each 2 baths4

Red bus rise up from 5 to 6

Red bus rise up from 4 to 5

Fig. 13 shows factors influence to revenues.

According to bus fare adjustment, revenue can be derived as the following formula.

Revenue from fare = [Tickets / trip / day]x [Trip / bus / day]x[Current fare]x[Serviced bus /day ]x[days ]

Total revenue is from bus fares 96 percent. The formula above illustrates to understand

main components of fare. The main factors of bus fare are Tickets/trep/day, Trip/bus/day,and Current fare. Number of services bus is nearly constant.

Before April 2005, almost factors are not very fluctuated except the decreasing of number

of tickets if only there are twice of bus fare adjustments on January 2004 and April 2004.

The third and last fare adjustment is about April 2005 and June 2005 respectively. For thethird adjustment, this period was during summer, normally total tickets or passengers had

decreased on April and increased on May. It is clear that revenue is increased dramaticallyagainst the total tickets are decreased for the last fare adjustment. The last two fare

adjustment gain sharply revenue through tickets are decreased. This information implies

that some passengers decided to get service from other transport provider. It is noticeable

that after increasing of oil price, gas consumption is vastly increased.


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.

1,2241,161

1,0691,029 938

0

200

400

600

800

1000

1200

1400

2540 2541 2542 2543 2544

.

1,2241,161

1,0691,029 938

0

200

400

600

800

1000

1200

1400

2540 2541 2542 2543 2544

Fig. 14 shows passengers of BMTA from 2540 2544.

0

500

1000

1500

2000

2500

3000

2540 2541 2542 2543 2544 2545

7 7

0

500

1000

1500

2000

2500

3000

2540 2541 2542 2543 2544 2545

7 7

Fig. 15 shows a number of private cars from 2540 2545.

Table 11 shows result of satisfaction.

No. Vehicle that always be used Percentage

1. Bus(BMTA), Taxi, car service 51.1

2. Private car 36.73. Taxi Motorcycle 23.6

4. Walking 9.5

5. Bicycle 3.3

6. Etc. (Boat, Train, Mass rapid transit.) 3.6

Source: http://www.eppo.go.th/nepc/poll-ABAC-Report.html

Fig. 14 shows a number of passengers of BMTA services between year 2540 to 2544. Fig.15 shows a number of private cars between year 2540 to 2545. During these year there are

3 times of fare adjustments. This evidence states that increasing bus fare influences to

decreasing number of passengers. There are many options which passengers can select suchas private cars, taxis, taxis motorcycle, vans, and sky-train.


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Percent Factors of Fuel Expenses

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Oct-

03

Nov-

03

Dec-

03

Jan-

04

Feb-

04

Mar-

04

Apr-

04

May-

04

Jun-

04

Jul-04 Aug-

04

Sep-

04

Oct-

04

Nov-

04

Dec-

04

Jan-

05

Feb-

05

Mar-

05

Apr-

05

May-

05

Jun-

05

Jul-05

Total Revenues from fares Total trip (trips) kilometers

Fuel (liters) Gas (Q.M.) Total tickets

2.2 Fuel and Gases Oil price (Scale 1:10) Index of Ticket price

% of Total value

12

3

4

Fig. 16 shows percent factors of fuel expenses.

Fuel expenses = [Serviced bus / day]x[kilometer/bus/day]x[Fuel price/liter]x[days] /[Fuel consumption rate km./liter]

Fuel expenses are about 20 percents of total expenses that are lower than salaries and

benefits expenses. There are 3 main physical factors influence to fuel expenses such as

kilometer/bus/day, fuel price/liter and fuel consumption rate km/liter. Before March 2005,

fuel expenses are small fluctuant, after that fuel prices have continuously increased startingfrom February 2005 and can make vastly increasing of fuel expenses. Other factors such as

the kilometers travel and fuel consumption rate are quite stable.

6.Actual Loss from each types of buses for maximum case on

May'05 ( / bus / day)

Cream-red, -3,252, 27%

Rent bus, -4,306, 37%

Ordinary Airbus, 847, 7%

NGV bus, 971, 8%

Long Airbus, -1,612, 14%

EURO II 797, 797, 7%

EURO II 500, 46, 0%

Cream-red Rent bus Ordinary Airbus NGV bus Long Airbus EURO II 797 EURO II 500

Fig. 17 shows actual loss from each type of buses.


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This graph shows loss which are caused by each type of buses. It is derived on condition

that the maximum fare is met. Mostly of loss is from regular buses (cream-red and rent

bus). This information implies that reducing regular buses and increasing air-conditioned

buses should be implemented.

Comparison revenus before - after increasing bus fare

0.000

100.000

200.000

300.000

400.000

500.000

600.000

700.000

(1) May 04 (2)Apr 04 (3) May 05 (4) Jul 04 (5) Jun 05 After at 2nd

Revenues from regular Bus Revenues from Airbus Total Revenues

Million bahts

Fig. 18 shows the comparison of revenues before and after bus fares adjustment.

Comparison number of passenger before-after increasing bus fare

34.9

09

29.9

45

32.9

22

36.6

56

35.3

16

34.3

92

25.3

85

24.4

22

25.5

13

26.6

36

26.1

33

25.5

54

60.2

94

54.3

67

58.4

35

63.2

9

2

61.4

49

59.9

46

0

10

20

30

40

50

60

70

(1) May 04 (2)Apr 04 (3) May 05 (4) Jul 04 (5) Jun 05 (6) Jul 05

Passengers of regular bus Passengers of Airbus Total Passengers

million persons

Fig. 19 shows the comparison of number of passenger before and after bus fares

adjustment.

From Fig. 18 and 19, it is the first time of bus fares adjustment. The comparison is made on

the same period but different year. It is clear that the revenue is increased apparently but a

number of passengers are changed a little bit.


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After first bus fares adjustment by April 2005, the revenue is creased that causes by

revenue from regular buses.

The second time of bus fares adjustment, the comparison is made on the same month but

different year. It is measured during July. This graph shows that every types of revenues

are increased. A number of passengers are decreased.

After the second bus fares adjustment after June 2005, revenues are increased. A number of

passengers are decreased.

In conclusion, decreasing of passengers is not contributed to increasing revenues.

Study Framework

Strategies to tackle major factors of transport that cause environmental problems wereidentified. Transport leads to environmental degradation because: (1) travel demand

increases, resulting in longer and more frequent trips due to economic development andurban sprawl; (2) use of automobiles increases to meet the travel demand since the supply

of alternatives to automobile use such as public transportation is not sufficient and/or

people prefer automobiles to public transport; and (3) each vehicle emits significant

volumes of air pollutants and CO2. To address those factors, three strategies, namely

reducing transport demand, increasing public transport share, and reducing emissions from

vehicles, were chosen, as shown in Fig. 20.

EnvironmentalBurden ^

Air polluton

EnergyConsumption

Global warming

Economic

Urban ^

Population

Urban sprawl

Trip Frequency ^

Trip Length ^

Vehicle

Ownership

Usage ^

Share of

public transport

Vehicle

KilometersTraveled ^

Environmentalburden

from each vehicle

Reducing Transport Demand

Increasing Pubic TransportShare

Reducing Emission FromVehicles

Fig.20 shows study framework.

Fig. 20 shows factors of environmental burden due to transport related activities andstrategies.


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Table.12. Show Emission (g/km) of each type of Diesel vehicle (March 2004).

AS the trip length or distances are increase, pollutant such as carbon dioxide, carbon mono

xide, particulate matter and hydrocarbon compound are increase by the value as be shown i

n Table 21. The buses of BMTA are HDDV or Heavy Duty Diesel Vehicle type that emit pollutant quite high and lower fuel efficiency than LDDV or Light Duty Diesel Vehicle type. I

n practice, during traffic jam the distance are not increase but there are pollutant still be emi

tted from buses.

Modeling

Refer to methodology investigates major factors of transport that cause economic and

environmental problems. This model is developed to predict the profits. These are major

concerned factors: oil price, trip frequencies, trip lengths, total tickets, fuel consumption,

and price of ticket. Linear regression analysis is used as shown in formula.

Profit (Loss) = -2.26x109

+ 87,497,629x[7] + 7,080,528x[6] - 10,458,111x[5] +965,298x[4] - 10,990,537x[3] + 42,589,629x[2]

The regression equation is

Profit-1 unit = -2.26E+09 +87497629 Trip + 7080528 KM. -10458111 FUEL

+ 965298 T.Ticket -10990537 Oil price (baths/L)

+42589629 Ticket price

Predictor Coef SE Coef T P

Constant -2256948267 2799096859 -0.81 0.433

Trips 87497629 1481806144 0.06 0.954

Kilometers 7080528 50324485 0.14 0.890

FUEL -10458111 30390449 -0.34 0.736Total Ticket 965298 1304452 0.74 0.471

Oil price -10990537 74755124 -0.15 0.885

Ticket price 42589629 209335923 0.20 0.842

S = 112707703 R-Sq = 13.7% R-Sq(adj) = 0.0%


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Table 13 Major concerned parameters for regression analysis.

1 Trend Analysis for Profit-1 (baht)

2 Trend Analysis for Ticket price (baht)

3 Trend Analysis for Oil price (baht/liter)

4 Trend Analysis for Total Ticket5 Trend Analysis for Fuel consumption (liter/month)6 Trend Analysis for trip length (km.)

7 Trend Analysis for trip frequency

According to linear regression formula, coefficient is indicator of dominant factor for profit

(loss). For example, trip frequencies are the first major factor contributes to profit (loss).

Bus fare is the second best. Fig.21 shows the better profit of BMTA after bus fares

adjustment.

Regression Analysis of Profit(Loss) of BMTA

-440,000,000

-400,000,000

-360,000,000

-320,000,000

-280,000,000

-240,000,000

-200,000,000

Oct-03

Dec-03

Feb-04

Apr-04

Jun-04

Aug-04

Oct-04

Dec-04

Feb-05

Apr-05

Jun-05

Aug-05

Oct-05

Dec-05

Feb-06

Apr-06

Jun-06

Aug-06

Oct-06

Dec-06

Feb-07

Apr-07

Jun-07

Aug-07

Oct-07

Predicted Profit

Baths

Fig. 21 shows linear regression analysis of profit (loss) of BMTA.

Economic Scenario analysis

First scenario: factor is oil price.

Second scenario: factor is trip frequencies.Third scenario: factor is bus fare.


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Regression Analysis of Profit(Loss) of BMTA

-440,000,000

-400,000,000

-360,000,000

-320,000,000

-280,000,000

-240,000,000

-200,000,000

Oc

t-03

De

c-03

Fe

b-04

Ap

r-04

Ju

n-04

Au

g-04

Oc

t-04

De

c-04

Fe

b-05

Ap

r-05

Ju

n-05

Au

g-05

Oc

t-05

De

c-05

Fe

b-06

Ap

r-06

Ju

n-06

Au

g-06

Oc

t-06

De

c-06

Fe

b-07

Ap

r-07

Ju

n-07

Au

g-07

Oc

t-07

Predicted Profit Oil price scenario Trip frequency scenario Bus fare scenario

Baths

Fig. 22 shows regression analysis of profit (loss).

This graph shows result from model. Each factor is incremented one unit. First scenario,

the assumption is obtained that oil price tends to increase. Therefore, unit of price is

incremented one baht. Second scenario, trip is increased one round per bus per day. Third

scenario, bus fare is incremented one baht.

From Fig. 22, it can be seen that trip frequencies is the most impact to profit (loss) that canimprove deficit of BMTA faster than fare adjustment. The increasing of trip frequency only

3 trips/bus/day that enough to improve deficit to be surplus within 6 years. The increasingrate of oil price can do small impact to profit (loss) but if there is enormously increasing of

oil price, the deficit become worse.

Environmental Scenario Analysis

First scenario: Trip length per Trip frequency ratio from normal status

Second scenario: Trip length per Trip frequency ratio as increasing 1 unit trip frequency.

Third scenario: Trip length per Trip frequency ratio as decreasing 1 unit trip length.

Correlations: Trip, KM.

Pearson correlation of Trip and KM. = 0.937

P-Value = 0.000

Regression Analysis: KM. versus Trip

The regression equation is

KM. = - 11.8 + 27.9 Trip

Predictor Coef SE Coef T P

Constant -11.82 20.86 -0.57 0.577


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Fig 23 Show result of regression analysis.

Regression analysis of Kilometer per T rip (/buses/day)

26

26.1

26.2

26.3

26.4

26.5

26.6

26.7

26.8

26.9

27

Oct

-03

Dec

-03

Feb-

04

Apr-0

4

Jun-04

Aug-04

Oct

-04

Dec

-04

Feb-

05

Apr-05

Jun-05

Aug-05

Oct

-05

Dec

-05

Feb-

06

Apr-0

6

Jun-06

Aug-06

Oct

-06

Dec

-06

Feb-

07

Apr-0

7

Jun-07

Aug-07

Oct

-07

kilometers/trips

scenario 1

scenario 2

scenario 3

Fig 23 Show result of regression analysis.

The pollutant is depends on distance or trip frequency of vehicle as in grams per kilometer.

From the increasing of trip frequency can increase trip length, the trip frequency can

increase pollutant too. Though increasing of trip frequency can improve deficit of BMTA

but it can impact to environment too.

By the higher service efficiency and higher fuel efficiency can relieve this problem as bepresented in the third scenario. This direction of strategy could improve business of BMTA

by the least impact to environment.


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6. Conclusions

Consequences from increasing of Fuel price (physical factors)

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05

fuel price baht/L (avg16.24) Trip(avg9trip/bus/day)

Kilometers(242.9km/bus/day) Fuel consumed (liters)(avg115.7L/bus/day)

GAS (Q.M.)(avg189.8Q.M./bus/day) TotalTicket(avg582.5T/bus/day)

Ticket price index

% change from

mean value

Fig. 24 shows consequence due to rising fuel price I.

Bus fares adjustment is needed due to increasing oil price. After the last bus fares

adjustment which is shown on Fig. 24, total tickets are decreased and total revenues are

increased.

Case of decreasing tickets, it implied that passengers prefer quality service from othertransport services such as private car, vans, taxis, motorcycle taxis. As a result, emission is

increased.

Consequences from increasing of Fuel price(economic factors)

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00


fuel price baht/L (avg16.24) Fuel Cost (baths) (avg 5.9Mb/day)

Total Revenues (Bahts/day)(avg16Mb) Total Expenses (Bahts/day)(avg30Mb)

Loss (Bahts/day)(avg13Mb) Total Revenues fare (Bahts)(avg4.8kb/bus/day)

Ticket price index

% change from

mean value

Fig. 25 shows consequence due to rising fuel price II.


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By February 2005, oil price has taken off. It effects directly on high fuel cost and total

expense. This effect forces to increase bus fares in order to relieve deficit and continue

business.

By March 2005, fuel price is sharply increased. It contributes to higher loss due to fuel cost

is increased. Mostly economic factors are quite fluctuating but for physical factor such as

total tickets tend to stationary. It is stated that passengers still use bus services with highercost of fare. Passengers must spend more money on traveling. This cost could hard hitexpenditure of the poor. As a result, the poor will be poorer.

Bus fare adjustment is not only strategy to relieve deficit but also management such as trip

frequency improvement, trip length optimizing, and organization management. From the

results of regression analysis show that deficit status of BMTA trend to be relieved and get

surplus in finally. This is because of increasing of bus fare. As the business of BMTA trend

to be surplus, the people or passengers become loser. Mostly people use service of BMTA

is poor there for, the fare adjustment is limited. Improvement of trip frequency and triplength optimizing are interesting. From results of scenario show that trip frequency can

improve deficit of BMTA faster than fare adjustment. To increase trip frequency there aremany ways to deal both relieve deficit of BMTA and people can get benefit. The efficiency

of transportation is limited by traffic jam. The longer distance traveling means more time

traveling and lower trip frequency. To increasing trip frequency, the lesser traffic jam and

the shorter trip length are required but have to be depended on the limitation of both BMTA

and people who pay for it.

7. Discussions

This section contains discussions and suggestions. It will be explained for each part of

stakeholders: BMTA, government, passengers, pedestrians, bus operators, and Thai people

as whole. The main topic will focus on benefits and losses.

1) BMTA and Government

Apparently, BMTA gets the most benefits. BMTA can make a lot of money from authorizedbusiness. There are many types of revenues such as tickets, advertisement, inter-

government transfer, and private investment.

BMTA is a government business. In the other word, government runs his business by give

authorize to agencies. After bus fares adjustment, BMTA gains more money which has

stated by our model. Financial balance is better. In fact, the government till has beensubsiding to BMTA and take care for this business.

Where has the money gone? Money from bus fare adjustment is consumed in BMTA. The

main expenditure is cost of salaries and benefits. It implies that employees get the mostbenefits.

What are welfares developments? There are few welfare that are provided by BMTA for

Thai people as a whole. BMTA has now provided Fare Exemptions and Concessions,

Half-Price Concessions, web site, and call center 184. By our expectation, welfares

should better than these.

Thai people should be provided good quality of services, safely, more comfortable on thebus, fast travel with low cost, better air quality, rich of information, and availability.


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2) Bus Operator

They are looser or gainer?As the same status with BMTA, bus operators will be gainer after increasing current fare.They work with more limited conditions which are regulated by BMTA. In fact, they must

pay for BMTA by contract. In this case, it means that they have less money. Their situations

are risks if they have to pay money for both BMTA and fuels at the same time without fare

adjustment. They could be a loser.

From Fig xx, it shows that bus operators pay a lot of money for BMTA compare to other

types of revenues.

After fare adjustment, it is clear that a number of passengers are decreasing. If bus servicesare the same level of quality, it could bring lesser passengers. As a result, they could be a

loser in case of can get lesser revenues in long term.

Revenues of BMTA

-2.000

0.000

2.000

4.000

6.000

8.000

10.000

12.000

14.000


1.2 Revenue from of coupon 1.3 Revenue from Monthly ticket sales 1.4 Revenue from Joint Air-conditioned buses

1.5 Revenue from Joint Air-conditioned Vans 1.6 Revenue from Mini Buses 1.7 Other Revenues

Million baths

3) PassengersLooser or Gainer?

Passengers spend much money for their tickets with the same level of services and theyhave no choices. Mostly passengers are poor to middle class of people. If they spend higher

cost for traveling, it means they have no any opportunity to get a better quality of life. It

can state that they are loser and they have no opportunity to be a gainer.


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4) Thai People as a wholeIt is beneficially?

Most of the people are middle class family. After fare adjustment, it can imply that a

number of vehicles on the road are increasing. More vehicles emit more pollutants. Thai

people get loss.

In case of BMTA gets more revenues, government would not subsidy for BMTA any more.Thai government would spend more money for improving road and relevant facilities. Thaipeople would be provided good services. They would get more benefits.

5) PedestriansIncrement or decrement?

After fare adjustment, it can imply that a number of pedestrians would be increase from the

decreasing passengers. Someone cannot afford for ticket. The best choice for them is onfoot. In the other hand, if they can meet the cost for other transportation services, a number

of pedestrians would be decrease. In conclusion, pedestrians would get loss that cause bypollution. And so they could get hurt from accident on the road.


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8. References

[1] BMTA. Accessed on 1 August 2005

[2] Office of policy and plan, Analysis and assessment division. BMTA strategic master

plan: Year.

2002-2006.[3] BMTA Executive Summary on July 2005.

[4] Pollution Control Department. Accessed on 1 August 2005

Increasing of BUS FEE and Financial Situation of BMTA

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