Comparison study of rural bus transport subsidy schemes

Sri Lanka has a public transport system that dates back to the 1860s. Buses entered the service in 1907 and have become the most widely used mode of transport. The penetration level of buses is 1 bus per 1000 population. The per capita bus travel is approximately 12 km per day. These services cover urban, inter-urban as well as rural services. Rural services however have always been loss making. This is due to the fact that such areas have lower household incomes and are therefore unable to generate high volumes of travel and are also unable to pay higher fares for resulting lower vehicle occupancies. Since over 70% of Sri Lanka’s population resides in rural areas, successive governments have provided subsidise for such bus services. However many such rural routes have remained loss-making in spite of receiving grants for decades. This has resulted in the Government being unable to expand the rural bus services as it has not been possible to develop the revenues on such routes to ensure profitability and to move on to other routes. As a result, the reliability of such services has diminished and rural communities do not have appeared to have developed on account of the provision of subsidized bus services. This study is evaluated the rural route subsidy scheme initiated in 2005and identify the short comes of existing system. And study subsidy schemes practice in other countries to provide sustainable transport service to the rural people. By studying that, it is going to identified what are the improvements we can do for the “Gamiseriya” scheme for provide better service to Sri Lankan rural communities