Vehicle population to double, investments in roads key says Transport Secy.

Though the birth rate may be static, the country’s vehicle population is tipped to double in the next decade necessitating urgent expansion in road network lest the motorists get choked in traffic.

As per forecasts made by the Ministry of Transport, the current vehicle population is 130 vehicles per 1,000 people and this is estimated to double to 270 by 2021. The current vehicle population of 130 comprises of 70 cars and 60 three wheelers and motor bikes whilst going forward the equation changes to 190 cars and 80 motor bikes/three wheelers per 1,000.

This estimate is in line with projected growth in per capita GDP in the country. The Government has forecast per capita GDP to double to $ 4,190 by 2015 and to over $ 7,000 by 2021. “This forecast confirms unless the road network is expanded the motorists and public will get chocked by congestion. Investments have to be made today for a developed road network in the future,” Secretary to Ministry of Transport Dhammika Perera who is also a top business leader told the Daily FT.

Largely due to reduced taxation initially and partly due to rebound in post-war economic and disposable income, vehicle imports have doubled from $ 546 million in 2010 to $ 1 billion last year. As per new registration of motor vehicles, up to November last year, the increase is 49% or 157,668 to 479,657.

Whilst noting that much progress has been made via massive public investments, Perera emphasised the need for a more “aggressive expansion” of the road network going forward.

He expressed the view that in tandem with rising GDP of the country the capacity to borrow has been enhanced hence the Government has the fiscal space in terms of higher public investments to meet the big demand for infrastructure development such as expansion of the road network. According to him the debt to GDP ratio has come down to 78% at present from 105% in 2005.

As per Central Bank Governor Nivard Cabraal’s recently released roadmap for 2012 and beyond presentation debt to GDP ratio is forecast to be 75% this year and 60% by 2015, much lower than the 100% + range experienced a few years back.

“The desired road expansion will require public investments whilst the private sector will have a growing role to play in the services and related areas,” Perera said.

“The Ministry has developed a transportation master plan for the next 30 years which will progressively see the transportation system evolve on par with an advancing GDP, and per capita income,” the Secretary said. Currently the transport sector share of GDP is about 11.5%.

According to Perera the Government’s aim is to fast track infrastructure investment over the next decade to make up for the dearth of investment during the past three decades. 

The Government has been maintaining a public investment rate of about 6% of GDP midst challenges.

As per Finance Ministry’s 2012 Fiscal Management Report, public investment in roads and bridges in 2011 had increased to Rs. 79.6 billion, from Rs. 52 billion in the previous year. Investment in transport sector has soared from Rs. 7 billion to Rs. 24 billion.

The Government’s biggest achievement in the road infrastructure sphere has been the Southern Expressway whilst recently the second phase of the Colombo Outer Circular Expressway was commissioned at a cost of Rs. 45 billion.

The construction of the 8.9 kilometer road is the second phase of the three-part road project which is 29.1 kilometers long. The Colombo Outer Circular Highway extends from Kottawa through the Homagama, Kuduwela, Biyagama, Mahara and Wattala divisional secretariat areas up to Kerawalapitiya.

Colombo Outer Circular Highway will directly connect to the proposed Colombo-Kandy expressway at Kadawatha as well as the Colombo-Katunayake expressway at Kerawalapitiya.

The rural road network is being improved via the ‘Gama Neguma’ program as well as Maga Neguma” program. Allocation for the former in 2011 was Rs. 11 billion whilst nearly Rs. 3 billion had been spent on the latter up to first nine months of last year, reconstructing 510 kilometres of rural roads.