PRIVATIZATION Privatization in Malaysia, Regulation, rent-seeking and policy failure

128 Kuala Lumpur Light Rail Transitintroduction of ARP was not implemented despite being raised as early as1991. 33 This was expected to restrict car trips to 1997 levels, increase thepublic transport share of daily passenger trips to 24.2 per cent (2000), 25.4per cent (2010) and 28.9 per cent (2020), and improve the LRT operators’financial performance (although these figures were based on higher thanactual ridership) (Rosli and Ooi 1993; JICA 1998b).To work, ARP needed to be complemented by increased parking charges inthe city and urban development control, as well as traffic guidance systems(JICA 1998b). The government sought to introduce these measures byphasing out all roadside parking to discourage single-occupancy vehicles(1994 and 1996), increasing parking fees in the city centre (1995, 1996, 1997)and reducing parking areas, including freezing approvals for new high-risebuildings in the city centre and reducing cheap or free parking spaces inexisting and new buildings. However, the government found it difficult toimplement these due to existing local by-laws 34 and opposition by the buildingand national car industries, parking operators, businesses and interestgroups (see Business Times, 1 May 1997, 17 January 2001; New Straits Times,26 January 1998, 17 January 2001). The government was even unable topromote ‘park and ride’ facilities at LRT stations as it was more lucrative forcar park operators to be located in the city.Instead, conflicting solutions were often proposed, partly driven by apreference for road construction that also characterized much of Malaysia’sprivatization programme. Traffic congestion also increased in the absenceof urban development control, particularly as new housing and commercialprojects were developed without accompanying public transport infrastructure.In the absence of urban planning, the government’s three-prongedpublic transport strategy for Kuala Lumpur involving the bus, the LRT andcommuter rail services was seen to be insufficient to offset the additionaldemand on the transport system generated by new commercial developmentsin the city. 35Institutional fragmentationIncoherent and conflicting transport policies were also the result of institutionalfragmentation. In 1993, urban transport policy in Kuala Lumpurinvolved 10 ministries, 12 federal agencies and seven local agencies overseeingplanning, financing, implementation, fares, operations, regulation andenforcement. The absence of a single agency responsible for administering allaspects of transportation comprehensively resulted in delays in the decisionmakingprocess. 36 Despite proposals for a single body with overall responsibilityfor transport policy in 1984 and 1995, this was never established. 37 Theabsence of a central transport authority and laws also complicated the introductionof ARP as it was unclear who would receive revenues collected. 38Instead, institutional changes after 1986 increased the powers of the EPU butwithout really centralizing authority.