Criterion for a fares policy and fares index for bus transport in Sri Lanka

The public transport sector in Sri Lanka faces many problems. Most of these problems seem to be related to the absence of a fares policy. Implicit fare policies, which have been followed in the past, have given rise to many problems of a serious nature, which have continued to undermine the quality of bus transport and threaten its continuity as a viable mode of transport. It is evident that even the numerous management changes from time to time have not made much of a difference. The paper sets out to analyse past fares policies and the consequent impacts that such policies have had on the bus industry both during the period of state monopoly in bus operations as well as during the period of mixed competition. It will be shown how the lack of a well-formulated, explicit fares policy has been a primary reason for the deterioration of the bus industry in Sri Lanka. The paper then proceeds to set out a criterion for a fares policy and develops a methodology for computing bus fares based on such a policy. Fares under the proposed policy are based on costs, quality of service, and subsidy payment, if warranted. A method for calculating costs and updating them regularly will be developed. Computation of fares is also given in a methodologically, wherein fare stages have been computed together with steps that should be taken to adjust fare anomalies that may contribute to varying and different benefit–costs ratios that presently exist between routes.