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The Road Transport Industry

The Road Transport Industry
August 29
08:27 2015

This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at the HFC Bank, Peter Fuata.

 

A vital part of infrastructure development is a fundamental precondition for transport systems.

This is crucial for any economy because transport, particularly road transport ensures everyday mobility of people and is important to the production and distribution of goods.

The total estimated sales of goods and services income for motor vehicles for March quarter of 2015 was $44.9 million.

This is an increase by 7.3 per cent when compared to the December quarter of 2014 and a 24.8 per cent increase over the same quarter in 2014.

In between the periods 2013 and 2014, the December quarter recorded the highest sale.

Can this be due to the period when most people get their bonuses, thus, they buy vehicles?

It can also be depicted that the number of vehicles being sold in the country is fluctuating at an increasing level even though the stock remains at a stable level.

The average rate that the number of vehicles is sold in Fiji from 2012 to 2013 is 17.97%, and if it continues at this trend, one has to wonder what will happen 10 years down the line.

We will have heavy traffic congestions and there will not be enough parking spaces in the urban areas to cater for all vehicles.

A way we can combat traffic congestions is to increase parking rates so that it encourages people to take the public transport or carpooling so that our roads are clear.

 

Motor vehicle

Second hand motor vehicles play an important role in the transport sector due to the fact that most of Fiji’s population are low income earners.

Given the nature of the market, unfair trade practices exists because the consumers have low technical knowledge about motor vehicles and complaints have increased.

Hence, the Fiji Commerce Commission introduced the “Self-Regulating Guideline for Sale of Second Hand Motor Vehicle in Fiji,” to educate the consumers of this particular market.

On March 11, 2015 the World Bank’s Board of Executive Directors approved a US$50 million for the Transport Infrastructure Investment Project (TIIP) in Fiji.

The objective of this project according to the World Bank is to “improve the resilience and safety of land and maritime transport infrastructure, including roads, bridges and rural jetties and wharves – all essential to the daily lives of Fijians. It will reduce a backlog of urgent repairs caused by the deferral of maintenance since 2012.”

 

Importance

For developing countries, especially here in Fiji, development of road infrastructure is uneven.

The urban areas are mainly favoured at the expense of the rural areas where food and agricultural products are produced and exported or brought to the market for sale.

The budget for 2015 saw an immense increase in the budget allocation for Fiji Roads Authority with $635.6 million.

The former Minister for Infrastructure and Transport Pio Tikoduadua, during his tour to the Navosa Highlands in April announced that the Government will undertake a review on all rural roads to maintain consistency in the maintenance of roads.

This is so that communities living in the most rural of places such as the highlands and also the maritime islands can have better access to education, health facilities, employment and other services.

 

Development in transport infrastructure, improves travel conditions and also reliability and quality of transport service.  A few socio-economic spillovers include:

  • Accessibility: Improving the accessibility of a given region by reducing travel time or increasing the potential to travel. Accessibility will also increase the market size for manufacturing, tourism and/or labour, leading to increased competition and/or centralisation.
  • Employment: Increase in employment in rural areas since they will have better access to work places. Industries may build in rural areas since there is improvement in transport infrastructure which will provide employment to rural areas.
  • Efficiency: Time, cost savings, gains in accessibility and reliability for any industry arising from the transport infrastructure would allow productivity gains to be achieved by improving their production and distribution. Further increases in profitability can also be achieved by wider access to the market which will create both new business opportunities and increased competition.  The market will be redistributed to the advantage of those companies which are able to adapt to the new market. The same process could occur for the labour market.
  • Social Inclusion: Where regions suffer from economic or social problems, transport infrastructure projects could either result in further exclusion of such communities or could contribute to addressing the problem of social exclusion by improving accessibility and mobility.

Feedback: rachnal@fijisun.com.fj

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