This article first appeared in Forum, The Edge Malaysia Weekly on September 19, 2022 - September 25, 2022

On June 16, Prime Minister Datuk Seri Ismail Sabri Yaakob declared open the MRT Putrajaya line Phase 1. In a surprising move, he simultaneously announced a month of free travel on all Rapid KL services. Since Rapid KL is responsible for the vast majority of Kuala Lumpur’s rail and bus services, the news spurred hope that the unprecedented, city-wide free public transport would reduce traffic congestion.

Recent reports indicate that traffic congestion in KL has exceeded pre-pandemic levels. Free travel does not come cheap, however, with the government footing the RM155 million bill. The move to entice motorists with free public transport is against a backdrop of dismal ridership, which has plummeted since the outbreak of Covid-19. It has yet to recover even though most restrictions in Malaysia have been lifted since the second quarter of 2022.

Prior to the outbreak of Covid-19, annual ridership on the Rapid KL system — which includes the MRT, LRT and Monorail — increased significantly from 182 million to 236 million trips between 2017 and 2019 (see Chart 1). Rapid KL bus, however, did not experience a similar growth trajectory and instead stagnated during the period. Nonetheless, private transport formed the bulk of all motorised trips, with public transport’s share only comprising a mere 20%.

Unfortunately, the outbreak of Covid-19 and subsequent Movement Control Orders severely curtailed travelling, impacting both private and public transport, as only essential trips were permitted. Annual ridership on Rapid KL rail and bus declined sharply in 2020, with the decline intensifying in 2021 (see Chart 1).

A McKinsey global report indicated that Covid-19 had resulted in increased car usage for both active private car users and active public transport users.

Even though Malaysia has removed almost all Covid-19 restrictions since the second quarter of 2022, reliable proxies indicate that public transport ridership remains severely below pre-pandemic levels. Google mobility measures visitor numbers to specific categories of location and compares the changes relative to baseline days. Each of the three indicators — namely workplaces, transit stations, grocery stores and pharmacies — are benchmarked against their respective pre-pandemic levels. In addition, the baseline value reflects median value over a one-week period, which neutralises the potential variations between weekday and weekend numbers.

Compared to other indicators, the mobility index for transit stations recorded the largest decline as at mid-August 2022 at 40% relative to pre-pandemic levels (see Chart 2). Contrary to expectations, the mobility index for transit stations only improved marginally during the mid-June to mid-July period when Rapid KL services were free. The scheme, given its limited duration, failed to provide long-term incentives for public transport usage. Interestingly, the workplace mobility index is hovering just a notch below pre-pandemic levels, which suggests that a sizeable share of commuters who had previously utilised public transport have since switched to private transport.

A change in public transport pricing alone would not resolve the traffic congestion in KL. For one, greater frequency for trains and buses is necessary. Reports of overcrowded trains have discouraged public transport use, as passengers complained that the frequencies for trains and buses have not recovered to pre-pandemic levels. Last-mile connectivity remains inadequate in the city, with non-existent or poorly maintained pavements a common occurrence.

However, apart from better provision of public transport, there is also a need to tackle the demand side of congestion. Specifically, the present fuel subsidy has to be overhauled to reflect the actual cost of private transport.

At present, Malaysia has a price ceiling for RON95 petrol and diesel of RM2.05 and RM2.15 per litre respectively. Since the market price for RON95 petrol as at July 2022 is more than twice the price ceiling, annual government subsidy for fuel alone is estimated to cost RM30 billion to keep prices artificially low.

Perhaps Malaysia could borrow a leaf from Indonesia, where the price of subsidised petrol was recently increased to 30% as the Indonesian government seeks to contain the ever-rising subsidy bill. Should the fuel subsidy be reduced or eliminated in Malaysia, the higher price of private transport would compel motorists to seek out alternative modes of transport (walking or public transport) or carpooling. More than simply giving free rail and bus services, resolving the price distortion of fuel would be more effective in tackling traffic congestion in KL.

Kevin Zhang is senior research officer and Rebecca Neo is research officer at the ISEAS-Yusof Ishak Institute

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