- Email: [email protected]
Economics of sustainable transport in India
Research in Transportation Economics 38 (2013) 1–2
Contents lists available at SciVerse ScienceDirect
Research in Transportation Economics journal homepage: www.elsevier.com/locate/retrec
Editorial
Economics of sustainable transport in India
Ever since the onset of economic reforms in early 1990s, India has experienced rapid economic growth along with increase in prosperity and income levels of citizens. However, this economic growth has also resulted in exponential growth of private vehicle ownership and use (similar to what US and Europe have experienced in early 1950s and late 1960s, respectively), which coupled with increase in population and other related factors, has resulted in transportation problems, namely accident, congestion, and pollution, at a severe level. Considering these problems and also with the realization that multi-modal transportation infrastructure forms the important backbone of the country’s economy, the Indian government, in its 11th five-year plan, has earmarked 34% of the total investment in infrastructure, which is 9% of the GDP by 2011–12, exclusively for transportation infrastructure, and this trend is likely to continue in 12th five-year plan as well. Also, this current and planned investment is spread across all sectors of transport (road, rail, air, and water) as well as at all levels (urban, regional, inter-city, and rural) for both passenger as well as freight movement. However, within all these efforts, there is a growing concern to streamline the investments in the direction of achieving sustainability in transport within all sectors and levels and therefore, the word ‘sustainability’ has attained a prominent place in all transportation planning, policy and other documents. It can be broadly defined as “development that meets the needs of the present without compromising the ability of future generations to meet their needs”. In the context of transportation, sustainability would mean developing better transportation systems, options, and expectations consistent with the objective of securing future social and economic development within a sustainable environment that ensures community well-being. So far in India, the impact of sustainable options has been understood well in terms of social and environmental benefits; however the understanding of economic impacts is still very meager, which often results in incomplete understanding and/or appreciation of sustainable planning and policies. This volume of Research in Transportation Economics is devoted to publishing original research work as well as review articles in the context of sustainable transport in India at all levels (urban, regional, inter-city, and rural) and for both passenger and freight movement but with a clear and added focus on economic benefits of the same. The call for paper resulted in a good response and after rigorous review process as per the standards of the journal; this issue recognizes fourteen papers, which I consider a good fit to the theme of the issue. These fourteen papers together cover aspects related to India like; research issues in sustainable 0739-8859/$ – see front matter Ó 2012 Elsevier Ltd. All rights reserved. doi:10.1016/j.retrec.2012.05.001
passenger transport and their economic impact, freight transport (inland and overseas), economic issues related to transport infrastructure. They have been selected after rigorous review by a number of experts in the academic and research community. The topics are related to real-world issues and the findings are of interest to both the practice community and the research community. The paper by Gupta and Mukherjee titled “Utilization of Passenger Transport Subsidy in Kolkata: A Case Study of Calcutta State Transport Corporation” tries to statistically analyze whether the subsidy given to Calcutta State Transport Corporation (CSTC), is really being used to cover the losses they make over the years or to merely cover-up an inefficient performance. The results obtained show that although subsidy increased with operating loss and operating cost as should be the case, but there was no concrete basis or factor like, operating loss, operating cost, wage bill plus land expenditure etc., on which the amount of subsidy was based. Through the paper titled “Strategies of State and Local Government in Management of Urban Transport Problems – A Case of Delhi”, Sen et. al. have attempted to address the coordination problem resulting from the division of policy instruments between two different government levels that face different types of externalities in varying degrees of magnitude in the urban transport sector by developing three types of theoretical models; the Full Control Centralised Model, a Nash equilibrium model, and a Stackelberg equilibrium model. With an empirical illustration of the model for Delhi, the paper finds that a division of roles between different governmental levels does not guarantee an efficient pricing outcome and the efficiency of pricing would depend on the institutional set-up and on the correspondence between the objective functions of the two government levels. The paper by Rahul and Verma titled “Economic Impact of Nonmotorized Transportation in Indian cities” attempts to review and quantify the economic impacts of non motorized modes. Through case study of Bangalore, India, the paper demonstrates the economic impact due to an assumed 1% shift of travelers to non motorized mode in a single day and due to pedestrianization of an important street M. G. Road, in the commercial area of Bangalore. Through the paper titled “Application of Genetic Algorithms for Joint Optimization of Signal Setting Parameters and Dynamic Traffic Assignment for the Real Network Data”, Varia et. al. presents the joint optimization of signal setting parameters and dynamic user equilibrium (DUE) traffic assignment for the congested urban road network. The simulation-based approach is employed to obtain the DUE condition for the case of multiple-origin multipledestination traffic flows. The results prove that the Genetic
2
Editorial / Research in Transportation Economics 38 (2013) 1–2
Algorithm (GA) is an effective technique to solve the joint optimization problem for the real network data. Manoj and Verma in their paper titled “Activity Based Travel Demand Models as a Tool for Evaluating Sustainable Transportation Policies” reviews the ability of travel demand models applied in India in analyzing the sustainable transport policies. The authors opine that the conventional trip based model system prevalent in India is inadequate in analyzing the sustainable transport policies. The paper presents a conceptual framework of an integrated activity based travel demand model based on the requirements identified from the review, which can potentially replace the existing travel demand models and can be used for planning applications once the modification & validation have been done according to the existing activity-travel behavior of individuals in India. The paper by Verma et. al. titled “Sustainable Urbanization Using High Speed Rail (HSR) in Karnataka, India” tries to argue that in the current Indian context, current patterns of mega-city growth are unsustainable, and that HSR can play an important role in providing opportunities for medium and smaller size cities through their interconnections. It begins by highlighting the role that railways have played in India and other countries, noting that merely economic analysis of their costs and benefits generally underestimated their contributions to development. It then provides an introduction to HSR and its potential impact in general, before applying this to the example of the State of Karnataka in South India. Through the paper titled “A Study of Factors Influencing the Severity of Road Crashes Involving Drunk Drivers and Non Drunk Drivers” Velmurugan et. al. quantifies the total economic cost of road crashes in the case of non-drunk driver road crash. The authors have developed a multinomial logit model to assess the influence of various parameters like vehicular, environment and geometric factors on the set of drivers who were found to be drunk at the time of getting involved in the road crash and those who were not under the influence of alcohol at the time of meeting with the road crash. Tiwari and Gulati in their paper titled “An Analysis of Trends in Passenger and Freight Transport Energy Consumption in India” examine the causes for the change in energy consumption in the transport sector in India. The pattern of energy consumption and their causes for change are benchmarked against select countries. A mathematical model that decomposes changes in energy consumption to various factors has been used. Results indicate that the growth in transport volume has been the main cause for increase in energy consumption for both passenger and freight transport in India despite the decline in energy intensity of various transport modes. Though not surprising for a growing economy like India, this poses a challenge for the future. Through the paper titled “A Nested Logit Model of Mode Choice for Inland Movement of Export Shipments: A Case Study of Containerized Export Cargo from India” Ravibabu presents a discrete choice model developed for the Indian context for inland movement of containerised export cargo. Primary data was collected from 124 export firms through a structured questionnaire, and a nested logit model with rail container and road truck in one branch was found to predict the mode choice behaviour best. Amongst the transport attributes, total cost and total transit time were found to be influencing the mode choices significantly. In addition, the model also predicts that non transport attributes like the percentage of letters of credit that materialise with inland way bills and the value of export benefits that materialise after export - are important in the mode choice decision. The paper by Banerjee and Gupta titled “Overseas Trade vis – a – vis Overseas Shipping: Growth and Performance in India (1999– 2009)” focuses on the role of shipping in the rising overseas trade in India, with a view to examine the shipping performance (the growth of overseas fleet) in response to the growing overseas trade
at all ports of India during the period (1999–2000 to 2008–09), in terms of both a mathematical model and a graphical representation. Finally, it concludes that the absolute overseas trade, being highly import dependent, have led to a more or less stagnant performance in overseas shipping, owing to the lack of the adequate growth of absolute overseas exports during this period. Baindur and Macario in their paper titled “Mumbai Lunchbox Delivery System: A Transferable Benchmark in Urban Logistics?” presents findings of a freight transport study carried out for Mumbai city (India). Based on the case study of lunch box delivery system organized by the Mumbai dabbawalas, the study demonstrates that an informal sector is capable of developing an urban logistics system that is precise, reliable and affordable to the middle class society in Mumbai. Through the paper titled “Transport Infrastructure Provision and Operations: Why Should Governments Choose Private Public Partnership?” Tsamboulas et. al. presents an evaluation framework to assess which of the two alternative schemes (Private Public Partnership and conventional procurement) for transport projects financing is preferable for the public. The proposed framework is complimentary to the Value for Money (VfM) approach and is based on a Multi Criteria Analysis (MCA). The proposed framework was applied to a pilot Bus Rapid Transit (BRT) corridor infrastructure project in the city of Indore, India, in order to demonstrate its validity. Mishra et. al. in their paper titled “A Simulation Approach for Estimating Value at Risk in Transportation Infrastructure Investment Decisions” opines that many infrastructure projects are associated with significant risks stemming from the lack of knowledge about future cost and benefit streams. The authors present the concept of Value-at-Risk (VaR) as a measure of effectiveness (MOE) to assess the risk share for the public and private entity in a PPP project. Bootstrap simulation is used to generate the risk profile savings in vehicle operating cost, and in travel time resulting from demand-responsive traffic. The methodology is applied to a case study involving such a joint venture in India, the Mumbai Pune Expressway/National Highway 4 (MPEW/ NH4), and fiscal implications from the perspective of the public and the private entities are examined. Last but not the least, the paper by Pradhan and Bagchi on “Effect of Transportation Infrastructure on Economic Growth in India: The VECM Approach” examines the effect of transportation (road and rail) infrastructure on economic growth in India over the period 1970–2010. Using Vector Error Correction Model (VECM), the paper finds bidirectional causality between road transportation and economic growth. The paper suggests that expansion of transport infrastructure (both road and rail) along with gross capital formation will lead to substantial growth of the Indian economy. It is my hope that these papers provides real insight into the economics of sustainable transport in India and offers scientific review and methods that can be used to address the unique problems and issues faced by India. I truly appreciate Professor Martin Dresner, Editor of Research in Transportation Economics, for giving me this wonderful and precious opportunity to organize this volume. Ashish Verma, Guest Editor Department of Civil Engineering, Indian Institute of Science (IISc), Bangalore 560012, India Centre for Infrastructure, Sustainable Transportation, and Urban Planning (CiSTUP), Indian Institute of Science (IISc), Bangalore 560012, India E-mail addresses: [email protected], [email protected] Available online 9 June 2012
Contents lists available at SciVerse ScienceDirect
Research in Transportation Economics journal homepage: www.elsevier.com/locate/retrec
Editorial
Economics of sustainable transport in India
Ever since the onset of economic reforms in early 1990s, India has experienced rapid economic growth along with increase in prosperity and income levels of citizens. However, this economic growth has also resulted in exponential growth of private vehicle ownership and use (similar to what US and Europe have experienced in early 1950s and late 1960s, respectively), which coupled with increase in population and other related factors, has resulted in transportation problems, namely accident, congestion, and pollution, at a severe level. Considering these problems and also with the realization that multi-modal transportation infrastructure forms the important backbone of the country’s economy, the Indian government, in its 11th five-year plan, has earmarked 34% of the total investment in infrastructure, which is 9% of the GDP by 2011–12, exclusively for transportation infrastructure, and this trend is likely to continue in 12th five-year plan as well. Also, this current and planned investment is spread across all sectors of transport (road, rail, air, and water) as well as at all levels (urban, regional, inter-city, and rural) for both passenger as well as freight movement. However, within all these efforts, there is a growing concern to streamline the investments in the direction of achieving sustainability in transport within all sectors and levels and therefore, the word ‘sustainability’ has attained a prominent place in all transportation planning, policy and other documents. It can be broadly defined as “development that meets the needs of the present without compromising the ability of future generations to meet their needs”. In the context of transportation, sustainability would mean developing better transportation systems, options, and expectations consistent with the objective of securing future social and economic development within a sustainable environment that ensures community well-being. So far in India, the impact of sustainable options has been understood well in terms of social and environmental benefits; however the understanding of economic impacts is still very meager, which often results in incomplete understanding and/or appreciation of sustainable planning and policies. This volume of Research in Transportation Economics is devoted to publishing original research work as well as review articles in the context of sustainable transport in India at all levels (urban, regional, inter-city, and rural) and for both passenger and freight movement but with a clear and added focus on economic benefits of the same. The call for paper resulted in a good response and after rigorous review process as per the standards of the journal; this issue recognizes fourteen papers, which I consider a good fit to the theme of the issue. These fourteen papers together cover aspects related to India like; research issues in sustainable 0739-8859/$ – see front matter Ó 2012 Elsevier Ltd. All rights reserved. doi:10.1016/j.retrec.2012.05.001
passenger transport and their economic impact, freight transport (inland and overseas), economic issues related to transport infrastructure. They have been selected after rigorous review by a number of experts in the academic and research community. The topics are related to real-world issues and the findings are of interest to both the practice community and the research community. The paper by Gupta and Mukherjee titled “Utilization of Passenger Transport Subsidy in Kolkata: A Case Study of Calcutta State Transport Corporation” tries to statistically analyze whether the subsidy given to Calcutta State Transport Corporation (CSTC), is really being used to cover the losses they make over the years or to merely cover-up an inefficient performance. The results obtained show that although subsidy increased with operating loss and operating cost as should be the case, but there was no concrete basis or factor like, operating loss, operating cost, wage bill plus land expenditure etc., on which the amount of subsidy was based. Through the paper titled “Strategies of State and Local Government in Management of Urban Transport Problems – A Case of Delhi”, Sen et. al. have attempted to address the coordination problem resulting from the division of policy instruments between two different government levels that face different types of externalities in varying degrees of magnitude in the urban transport sector by developing three types of theoretical models; the Full Control Centralised Model, a Nash equilibrium model, and a Stackelberg equilibrium model. With an empirical illustration of the model for Delhi, the paper finds that a division of roles between different governmental levels does not guarantee an efficient pricing outcome and the efficiency of pricing would depend on the institutional set-up and on the correspondence between the objective functions of the two government levels. The paper by Rahul and Verma titled “Economic Impact of Nonmotorized Transportation in Indian cities” attempts to review and quantify the economic impacts of non motorized modes. Through case study of Bangalore, India, the paper demonstrates the economic impact due to an assumed 1% shift of travelers to non motorized mode in a single day and due to pedestrianization of an important street M. G. Road, in the commercial area of Bangalore. Through the paper titled “Application of Genetic Algorithms for Joint Optimization of Signal Setting Parameters and Dynamic Traffic Assignment for the Real Network Data”, Varia et. al. presents the joint optimization of signal setting parameters and dynamic user equilibrium (DUE) traffic assignment for the congested urban road network. The simulation-based approach is employed to obtain the DUE condition for the case of multiple-origin multipledestination traffic flows. The results prove that the Genetic
2
Editorial / Research in Transportation Economics 38 (2013) 1–2
Algorithm (GA) is an effective technique to solve the joint optimization problem for the real network data. Manoj and Verma in their paper titled “Activity Based Travel Demand Models as a Tool for Evaluating Sustainable Transportation Policies” reviews the ability of travel demand models applied in India in analyzing the sustainable transport policies. The authors opine that the conventional trip based model system prevalent in India is inadequate in analyzing the sustainable transport policies. The paper presents a conceptual framework of an integrated activity based travel demand model based on the requirements identified from the review, which can potentially replace the existing travel demand models and can be used for planning applications once the modification & validation have been done according to the existing activity-travel behavior of individuals in India. The paper by Verma et. al. titled “Sustainable Urbanization Using High Speed Rail (HSR) in Karnataka, India” tries to argue that in the current Indian context, current patterns of mega-city growth are unsustainable, and that HSR can play an important role in providing opportunities for medium and smaller size cities through their interconnections. It begins by highlighting the role that railways have played in India and other countries, noting that merely economic analysis of their costs and benefits generally underestimated their contributions to development. It then provides an introduction to HSR and its potential impact in general, before applying this to the example of the State of Karnataka in South India. Through the paper titled “A Study of Factors Influencing the Severity of Road Crashes Involving Drunk Drivers and Non Drunk Drivers” Velmurugan et. al. quantifies the total economic cost of road crashes in the case of non-drunk driver road crash. The authors have developed a multinomial logit model to assess the influence of various parameters like vehicular, environment and geometric factors on the set of drivers who were found to be drunk at the time of getting involved in the road crash and those who were not under the influence of alcohol at the time of meeting with the road crash. Tiwari and Gulati in their paper titled “An Analysis of Trends in Passenger and Freight Transport Energy Consumption in India” examine the causes for the change in energy consumption in the transport sector in India. The pattern of energy consumption and their causes for change are benchmarked against select countries. A mathematical model that decomposes changes in energy consumption to various factors has been used. Results indicate that the growth in transport volume has been the main cause for increase in energy consumption for both passenger and freight transport in India despite the decline in energy intensity of various transport modes. Though not surprising for a growing economy like India, this poses a challenge for the future. Through the paper titled “A Nested Logit Model of Mode Choice for Inland Movement of Export Shipments: A Case Study of Containerized Export Cargo from India” Ravibabu presents a discrete choice model developed for the Indian context for inland movement of containerised export cargo. Primary data was collected from 124 export firms through a structured questionnaire, and a nested logit model with rail container and road truck in one branch was found to predict the mode choice behaviour best. Amongst the transport attributes, total cost and total transit time were found to be influencing the mode choices significantly. In addition, the model also predicts that non transport attributes like the percentage of letters of credit that materialise with inland way bills and the value of export benefits that materialise after export - are important in the mode choice decision. The paper by Banerjee and Gupta titled “Overseas Trade vis – a – vis Overseas Shipping: Growth and Performance in India (1999– 2009)” focuses on the role of shipping in the rising overseas trade in India, with a view to examine the shipping performance (the growth of overseas fleet) in response to the growing overseas trade
at all ports of India during the period (1999–2000 to 2008–09), in terms of both a mathematical model and a graphical representation. Finally, it concludes that the absolute overseas trade, being highly import dependent, have led to a more or less stagnant performance in overseas shipping, owing to the lack of the adequate growth of absolute overseas exports during this period. Baindur and Macario in their paper titled “Mumbai Lunchbox Delivery System: A Transferable Benchmark in Urban Logistics?” presents findings of a freight transport study carried out for Mumbai city (India). Based on the case study of lunch box delivery system organized by the Mumbai dabbawalas, the study demonstrates that an informal sector is capable of developing an urban logistics system that is precise, reliable and affordable to the middle class society in Mumbai. Through the paper titled “Transport Infrastructure Provision and Operations: Why Should Governments Choose Private Public Partnership?” Tsamboulas et. al. presents an evaluation framework to assess which of the two alternative schemes (Private Public Partnership and conventional procurement) for transport projects financing is preferable for the public. The proposed framework is complimentary to the Value for Money (VfM) approach and is based on a Multi Criteria Analysis (MCA). The proposed framework was applied to a pilot Bus Rapid Transit (BRT) corridor infrastructure project in the city of Indore, India, in order to demonstrate its validity. Mishra et. al. in their paper titled “A Simulation Approach for Estimating Value at Risk in Transportation Infrastructure Investment Decisions” opines that many infrastructure projects are associated with significant risks stemming from the lack of knowledge about future cost and benefit streams. The authors present the concept of Value-at-Risk (VaR) as a measure of effectiveness (MOE) to assess the risk share for the public and private entity in a PPP project. Bootstrap simulation is used to generate the risk profile savings in vehicle operating cost, and in travel time resulting from demand-responsive traffic. The methodology is applied to a case study involving such a joint venture in India, the Mumbai Pune Expressway/National Highway 4 (MPEW/ NH4), and fiscal implications from the perspective of the public and the private entities are examined. Last but not the least, the paper by Pradhan and Bagchi on “Effect of Transportation Infrastructure on Economic Growth in India: The VECM Approach” examines the effect of transportation (road and rail) infrastructure on economic growth in India over the period 1970–2010. Using Vector Error Correction Model (VECM), the paper finds bidirectional causality between road transportation and economic growth. The paper suggests that expansion of transport infrastructure (both road and rail) along with gross capital formation will lead to substantial growth of the Indian economy. It is my hope that these papers provides real insight into the economics of sustainable transport in India and offers scientific review and methods that can be used to address the unique problems and issues faced by India. I truly appreciate Professor Martin Dresner, Editor of Research in Transportation Economics, for giving me this wonderful and precious opportunity to organize this volume. Ashish Verma, Guest Editor Department of Civil Engineering, Indian Institute of Science (IISc), Bangalore 560012, India Centre for Infrastructure, Sustainable Transportation, and Urban Planning (CiSTUP), Indian Institute of Science (IISc), Bangalore 560012, India E-mail addresses: [email protected], [email protected] Available online 9 June 2012