Before the 2017-2018 budget, the Ministry of Finance and Ministry of Transport should have focused on one single question: how to prevent 2017 from being another year lost in the traffic and pollution of the roads of central Israel. The Ministry of Transport 2017-2018 budget showed some signs of moving in the right direction, but they are far from being sufficient. In the next year, the Israeli market will keep on losing dozens of billions of shekels to traffic jams.
A series of Ministry of Transport and Ministry of Finance reviews, starting in 1999, have shown that the cumulative investment in public transport in Israel's metropolitans is €1,500 per capita, compared with €10,000 in the West; according to these reviews an investment of NIS 200-250 billion is required to close this huge gap. The plan is to spread this investment over 25 years, with an annual investment of NIS 10 billion. In 2013-6, NIS 5 billion was indeed invested in public transport subsidies annually, and an additional NIS 4.5 billion was invested in developing public transport infrastructure. In the proposed budget for 2017-2018, subsidies jumped to NIS 6.4 billion and infrastructure investments to NIS 5.8 billion per year.
This investment may have been motivated by the frightening figures revealed in the strategic plan. Without urgent action, Israeli drivers will spend 850 working hours waiting in traffic, which will have a direct cost of NIS 25 billion. As early as 2008, the Green Tax Committee estimated that the loss from time lost in traffic jams totals NIS 15 billion per year, while the damage from private vehicle air pollution was estimated at a further NIS 16 billion. Then, the Ministry of Transport estimated that traffic jams at the entrance to Tel Aviv cause a waste of 277 million working hours per year, about 10 days per driver - similar to the duration of a worker's annual vacation - which cost NIS 5.5 billion. The road building policy, Yisrael Katz's pride and joy, has proven insufficient, particularly as it becomes clear that the elements responsible for projects provide an inadequate quality of planning and supervision.
The past few years have seen a leap forward in the Ministry of Finance's and Ministry of Transport's commitment to promoting public transport. The subsidies and the number of bus lines have increased, Israel Railways has continued expanding, the Metronit has been launched in Haifa and the light rail in Jerusalem, and works for Tel Aviv's light rail have begun. The salaries of bus drivers who joined after the 2000 reform have risen over the years, and with overtime, many of them make a NIS 10,000 salary. The fare reform launched at the beginning of the year is also a step in the right direction.
Nevertheless, real-time results still shows a serious failure. From the perspective of the last two decades, it is evident that policy of the Ministry of Finance and the Ministry of Transport is responsible for the transportation disaster we are currently experiencing in 2016. The solutions implemented had been partial and the proposed solutions will be realized, in the best case scenario, in 5, 10 and 15 years, and even then they are unlikely to solve the problem. The money being wasted in Egged is peanuts compared with the dozens of billions of shekels thrown away each year, due to fixed mindset and planning failures.
This is the crux of the paradox: the number of bus and shared taxi passengers is ten times as high as the number of train passengers; and yet, rail budgets - development and subsidies - are higher than bus budgets. In 2014, 85% of trips were bus trips, while only 6.5% were commuter rail trips. In 2010, shared taxis made 75 million trips, exceeding the number of train drives a few years later. This constituted a 10% of all rides. Impressive figures on shared taxi performance did not prevent the ministries of transport and finance from including a puzzling, meaningless public taxi reform in the Economic Arrangements Law for 2017-2018. Only public and political pressure caused the reform to be excluded from the law, for a rethink.
At present, there are no indications that any developments in this field are expected, although in the short term shared taxis, like buses, are much more important to solving the transportation problem in Greater Tel Aviv and many other places than the national rail system. The cabinet's neglect continues in full force these days, although it takes a slightly different form. The ministries are engrossed in partial and insufficient solutions, such as park-and-ride lots, which will force drivers to drive dozens of kilometers to reach them and will provide service to several tens of thousands cars.
Too little to make a change
Plans for additional fast lanes are also not a solution. On the contrary - they only prove that the working assumption is that regular lanes will continue being congested. Even the welcome Mahir La'ir project, in which 330 kilometers of public transport lanes will be built in Greater Tel Aviv, will be only a partial solution, which will not be relevant before 2020. Until then, further hundreds of billions of shekels will be wasted, in addition to loose nerves and extensive pollution.
A demand survey is required
The primary reasons preventing drivers from forsaking their cars in favor of public transport are the long drive time and accessibility problems - the failure to bring them from door to door. With no public transport lanes, why be stuck in traffic inside a bus? The car is more convenient and intimate, and it is highly efficient in bringing drivers from one location to another. In order for us to see a real change as early as the next one-two years, two things must happen: the number of buses must be drastically increased, perhaps even doubled, and the same must happen with active public taxis. Only this will enable faster service to a larger number of locations. The cost to the state's treasury will be dwarfed by the money the market will save.
According to Tel Aviv Municipality figures, 750,000 cars pass through the Ayalon Highway daily. There is an average of 11 passengers in every ten cars; that is, about 825,000 people pass through Ayalon Highway. In order for some of them move to public transport, they would have to be offered direct lines, without stops, from their cities of residence and back. Once a detailed demand survey is carried out in dozens of cities and villages around Greater Tel Aviv, and fixed, data-based demand is determined, private car owners will be able to rely on the service, enabling each bus to take up to several dozen cars off the road. This model ensures that the lines will be profitable during rush hours, but will have to be subsidized in hours with less passenger traffic. If the working assumption of the Trajtenberg Committee is correct, and a 1% rise in the use of public transport is worth an annual NIS 400 million for the market, subsidizing the 'bus train' - in central Israel, Jerusalem and other areas - will result in a profit of many billions of shekels each year.
Paradoxically, the progress with the planning and implementation of Israel's public transport in the past few years occurred coincided with the country becoming increasingly stuck in traffic. Most drivers crawling through Ayalon Highway traffic at 12 am can still remember days, not a long time ago, when traffic congestion ended before 10 am and resumed only at the afternoon, around 4 or 5. Accepting the vague promise that things will be better in 10 and 15 years is a grave economic mistake and an unnecessary compromise on the quality of life of the people of Israel. The year wasted by the ministries of transport and finance on fighting with Egged is a sign of moving in the wrong direction. Egged should streamline but, like other bus companies, it is part of the solution, rather than the problem.
Shared taxis: the overlooked solution
As mentioned, buses are not the only solution. Passengers are particularly fond of shared taxis because of their flexibility, the small number of stops made and their high frequency in highly populated areas. At present, there are about 1,000 shared taxis operating in Israel; in the past few years, many of the 2,300 licenses in this field became inactive due to a lack of planning. The proven efficiency of shared taxis suggests that there is no reason for Israel not to have as much as 5,000 taxis. For this to happen, thorough planning will be required, and necessary corrections must be made on the way. In order for shared taxis to be effective and take private cars off the road, an economic analysis must be made for every planned line, with the non-profitable lines included in the subsidy plan, as part of the Rav Kav card.
Agitation against Egged drivers is only natural. We are part of the Homo Sapiens species and have been born into small tribes that have taught us that everything is personal. Pointing at enemies and uniting against them is part of our DNA. Look at them, the corrupt corporation members, sucking the country's lifeblood. Because of them, we have such a poor quality of life. They, and everyone like them, who can disrupt the country's routine life: employees of Israel Electric Corporation (IEC) (TASE: ELEC.B22) , the ports and Mekorot National Water Company. Those who make good money, perhaps too good, at our expense. But is it really exaggerated for a fifty year old driver, supporting a family and working hard for dozens of years to have a salary of NIS 15,000 or even NIS 20,000?
An examination of overall public transport subsidies in 2014 reveals that Egged received NIS 1.5 billion, 45% of all subsidies to bus companies, about 5% more than its market share at that time. The other companies on the market received a cumulative NIS 1.8 billion. One of the items providing Egged with higher funding originated in the 2000 Competition Agreement. In this agreement, the state committed to compensate Egged with NIS 340,000 for every corporation member who will retire, with an annual threshold of NIS 45 million and an overall limit of NIS 785 million - that is, the retirement of up to 2,309 members in 17.5 years. And indeed, during the time since the public transport competition reform, 1,900 members and 1,000 first generation employees have retired from Egged. This was also a result of Ministry of Finance and Ministry of Transport negligence; the ministries were so eager to replace veteran workers with employees paid starvation wages - employment conditions have drastically improved over the years - that they have enabled many hundreds of young workers to retire with excellent conditions. That had been the neoliberal zeal for privatization of that time. The idea was that opening the market to competition would be the wonder drug for the high prices charged by Egged and the noted decline in the number of public transportation passengers. Today it is already evident that this issue requires a much more in-depth handling.
Published by Globes [online], Israel business news - www.globes-online.com - on November 14, 2016
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