Sunday, July 21, 2013

Privatizing Indian Roads and Highways

Road Accidents in India
According to the available data on road accident deaths, India is on number one spot in the world. Surely this is no reason for celebration of being number one in terms of dead people on Indian roads. Every year more than 1 lakh people die on Indian roads and highways e.g., in 2011, according to the report of Ministry of Road Transport and Highway, Government of India (see here), there were total 4.98 lakh road accidents out of which 1.42 lakh were fatal. This surely is a huge waste of human lives; a big tragedy about which no one is talking or seriously thinking. Even the most contentious issue of Kashmir, where in two decades of freedom fight 47,000 lives were lost, pale in comparison to lakhs of annual accident deaths on public roads. Newspaper and mainstream media TV channels scream on top of their voice for non-existent threats like Bird or Swine Flu, which kills few hundred people every year, but they remain silent on the ever so present danger of road accident deaths where lakhs of people lose their lives every year.   

We must break this silence, and seriously discuss the issue of road accident deaths if we want to save lakhs of those lives which are lost every year on Indian roads. We must ask the following questions to ourselves: Why these road accidents are taking place? What is the root cause of these deaths? How to stop or lessen these road accident deaths? These are some of the most important questions which I am asking and briefly answering in this short article (those who are interested in a detailed analysis of these questions should read the pioneering work of Dr. Walter Block, Privatizing Roads and Highways).    

Proximate Causes
The social science literature on road safety mainly focuses on three causes of road accident: 1) the driver (drunken driving), 2) road (bad roads) or weather condition, and 3) the vehicle (defective cars and two wheelers etc.) For example, the above cited government report says that, "The analysis of road accidents in terms of causal factors reveals that drivers’ fault is the single most important factor responsible for accidents, fatalities and injuries. Drivers’ fault accounted for 77.5 per cent (3,85,806 accidents) of total accidents; 72.0 per cent (1,02,620) of the total number of persons killed and 78.2 per cent (3,99,911) of the total number of persons injured in road accidents during 2011 (Chart 22). The fault of the cyclists and that of the pedestrians appears to be of marginal consequence accounting for a share of 1.3 per cent and 2.4 per cent, respectively, in road accidents during 2011. Cyclists and pedestrians were responsible for about 1.8 per cent and 3.1 per cent, respectively, of total number of persons killed in road accidents. Defects in the motor vehicles caused 1.6 per cent of road accidents and 2.1 per cent of fatalities in road accidents." (p. 22) (emphasize mine).

 
Causes of Road Accidents in India, 2011 (Government Report)
But, to blame drivers, cyclists and pedestrians for these accidents is to point out only the proximate causes. Government of course is not going to blame itself for these deaths. They will always find scapegoats in the form of drivers, pedestrians and cyclists. To find the ultimate cause we have to dig deeper and go to the root of this problem. We now see what is the ultimate root cause of these accidents and deaths.

The Ultimate Root Cause
Just think carefully for a while. Suppose you go to a private restaurant to eat your dinner, and you get sick and die! Would your relatives sue the waiter who served you the stale food or the cook who prepared that food for compensation and punishment? Or would they sue the restaurent's management and, most importantly, its owner? Of course they will sue the owner.

If we clearly see the restaurant owner as the main culprit in the above example, then, why we don't indict the government and its officials, who are the owners and managers of those public roads, for the similar case of death on public roads? The way in which the restaurant owner is responsible for the negligience of his customer's death, government officials are also responsible for the numerous road accident deaths. If there is a private market in the roads and highway production, then, any entrepreneur on whose road every year 1.42 lakh people are getting killed will surely go out of business. No motorist, bicyclist or pedestrian will use his road because of these fatalities. His company will make losses quickly and forced either to improve the driving safety on its roads or go out of business. His road company will surely be taken over by a more efficient company once his business go bust. This beautiful market process will efficiently weed out the bad road companies ensuring maximum road safety.

But the market process system of profit and loss is dysfunctional on government roads because government doesn't work on the principles of free market. Quite the contrary. Government means violation of free market principles. Lakhs of people every year are killed on government roads, but it never goes out of business because it doesn't rely on voluntary purchases of its customers. Government doesn't care whether buyers are patronizing its roads or not because it has the monopoly over roads and highway production. There are no other competitors to worry about. Those people who drive on public roads don't have any other choices. They are not customers of government roads, but victims! Government relies on coercive taxation for financing [sic] its road and highway operations. They can easily fund their losses by forcefully taxing more its productive populace. What most that can happen is, that some drama and commotion will take place in parliament, some phony road safety bill will be passed, may be some road and highway construction or safety function will be outsourced to some politically well connected private company, and that's it. No matter what happens, public roads will never be fully privatized. The government will never go out of business like private firms.  

The Remedy
 
If government ownership of roads and highways is the root cause of accident deaths, and it IS, then, the only way in which we can eliminate or lessen these deaths is by privatizing these roads and highways. Only when the free market capitalist system is allowed to produce roads and highways, we can finally see a drastic reduction in the number of accidents and fatalities. How the private market companies will exactly run and manage roads, highways, byways, streets, footpaths etc., is an entrepreneurial question, and not an economic one. The way in which market produces toothbrushes, shoes, pencils etc., without any big problem, it will also produce roads, highways, streets etc. The market process system of profit and loss will make sure, that only those companies will survive in the market who can provide best quality roads at the cheapest possible prices to their customers. All the inefficient companies will go out of business. There will be variety of different roads for myriad of different types of customers. Some companies will provide roads only for those who want to enjoy the thrill of speed whereas others will make sure that customers drive at safe speeds. Drunk drivers, careless pedestrians or cyclists will simply be not allowed to venture on these private roads by their owners. Drunk drivers are not ultimately responsible for fatalities, but the government who allows these drivers to drive on their roads. The price system will make sure that roads are provided where they are needed the most. 

Private road market will also solve the problem of road traffic congestion. Government owners of today's public roads actually create more congestion by giving low cost passes to daily commuters when exactly opposite pricing policy is required. Peak load traffic requires pick load higher prices. Private companies will let the demand and supply forces determine the price of road usage. Increasing competition in the road market will reduce the prices of road usage and ensure highest quality also. Roads with pot holes and other bad conditions will become a thing of the past. 

I know there are many other issues re privatization of roads and highways which I have not discussed here, but then the versatile private market is capable of solving almost any problem. What we need today is just a change in the public opinion in favor of privatization of roads and highways. The idea that only government can produce roads is totally wrong. The day people will understand the fact that roads and highways are just like any other commodity produced by the market, the way for real privatization will be clear. Until then, sadly, lakhs of people will continue to die on Indian roads every year.

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