It is considerably difficult to think of a country that has managed to achieve significant, continuous economic and social development without a parallel development of its infrastructure, including, and perhaps most importantly, within its transport sector. Jordan’s importunate endeavors to ascend into the world economy, it is strongly debated, is a moot effort without similarly-resolute efforts to improve, build on and support its transport sector, both within the country and without. According to national statistics, the sector currently accounts for more than 10% of the Kingdom’s gross domestic product (GDP) and with annual growth at an impressive 6%, the necessity to improve, modernize and create a more efficiently-regulated system has never been greater. Successive governments in Jordan have had uneven success with their reform efforts, but policymakers, politicians, and private entrepreneurs have, for a refreshing change, matched bold statements with even bolder and merit-worthy improvements on the ground. Recognizing that its geopolitical positioning is one of the country’s few assets, the game is on.

“The significance of the transport sector stems from the fact that it is the lifeline of all trade in any country, including Jordan’s, of course,” said HE Alaa Batayneh, Jordan’s minister of transport, in an exclusive interview with Jordan Business last March. However, the relatively new guardian of one of the country’s most vital sectors has a set of easily-confusing realities to contend with, describing, in recent press conferences, the public-transport sector in Jordan as “knotty issue that needs reorganization.” Indeed, even a rudimentary effort to make heads or tails on the public and private side of the equation quickly turns into a brain teaser. On the one hand, authorities presiding over the developmental, regulatory and operational aspects of the sector are numerous, with overlapping responsibilities. On the other, fragmented ownership dominates the private sector’s involvement creating, in all, a much diffused picture.
Taking Control
Since the beginning of the new millennium, there has been an obvious shift in the traditional role of the Jordanian government with regards to the transport sector. “As part of our new national strategy, the ministry is trying to strive along the lines of the government’s endeavors to retain the role of regulation and monitoring, whilst leaving the areas of service provision and operation to the private sector,” Batayneh said in March.

“To this end, we have started pulling out of actual operations and forming regulatory bodies, such as the Public Transport Regulatory Commission (PTRC), which was established in 2001,” he added. “Until the PTRC was established, a duplication of authority caused a great many obstacles to the proper regulation of the sector,” the minister asserted.

The Commission reports directly to the ministry and until recently, maintained regulatory control, including licensing, over the entire public-transport system inside the capital and across the Kingdom. However, in a surprise move within the dying breaths of the outgoing Bakhit government, a temporary law was passed, transferring regulatory authority of the public-transport sector within the capital to the Greater Amman Municipality (GAM), with Mayor Omar Maani at the helm. The activities of the sector in areas of the Kingdom outside of the capital remained, according to the new legislation, within the regulatory purview of the PTRC.

While the mayor’s office refused to directly comment on the shift, Maani believes that the move solidifies and integrates urban planning. “GAM is currently responsible for planning, regulating, licensing and overseeing public-transport operations [within the capital]. Among these responsibilities is setting public-transport tariffs within GAM’s jurisdiction,” he told Jordan Business in an exclusive interview. “This shift could not have come at a more critical time, when Amman witnessed unprecedented growth in population and foreign investments, both of which are stimulating rapid and large-scale development,” Maani went on to explain. “The surge in the demand for mobility has been testing for the Amman transport system, even after the substantial road infrastructure improvements in recent years. GAM has entered into a paradigm shift: meeting the increased demand in mobility can only be sustained through a comprehensive strategy that favors public transport,” he pointed out.
 
Yet, it’s a different paradigm shift that has observers and some policymakers worried. Where once the focus of policies and politics were heavily set on divorcing regulation and operation in the belief that combining the two would cause an inadvertent conflict of interest, GAM’s recent appointment as overseer and regulator has sparked a distinct level of controversy. “The decision to transfer regulation responsibilities to GAM was definitely a political one, with a tremendous amount of behind-the-scenes lobbying. The move was a surprise to everyone really,” a high-ranking government official told Jordan Business, preferring to remain anonymous. “This decision, while still regarded a temporary law, has in essence, rendered the initial conceptions of restructuring the entire sector null. Operating and regulating translates into a definite conflict of interest. A regulatory body doesn’t have a direct interest in profit and loss, but more of a general interest in making sure the sector is acting as efficiently and safely as possible to the benefit of the consumer,” explained the unnamed source. “When it’s separate, the regulatory body doesn’t have a direct link to the bottom line of the operation and will, therefore, not be tempted to take shortcuts, overlook safety precautions or take cost-cutting measures at the expense of the final consumer: our citizens,” he told Jordan Business, summarizing the concerns of like-minded policymakers.

The Mobility Master Plan
Quite clearly, the aforementioned argument is one that GAM would reject, although an official comment on the transfer of authority was denied. However, while the shift is only a few months in the making, GAM has hit the ground running, launching the Mobility Master Plan Project in April. “With support from the French Development Agency, the Mobility Master Plan aims to develop an overall transport strategy for GAM that is based on an accurate understanding of market demand and supply. The project began with extensive field data collection that included a survey of Amman households to understand their socio-economic characteristics, travel behavior and mobility needs,” Maani said.
 
“A quick look at the income statistics for Amman residents, for example, clearly shows the urgency of addressing public transport. According to the latest numbers, the median annual household income in Amman is approximately JD5,200,” he explained. “The Department of Statistics (DoS) estimates that the portion of household income spent on transportation and communications at 14 to 17%. This translates into JD60 to 70 per month for these two activities,” he said, adding that with the surge in fuel prices and current inflationary pressures facing the average Jordanian, the situation is worsening.
The Mobility Master Plan, GAM describes, calls for a multi-layered public-transport system sectioned into three distinct layers. “The first consists of high-order transit, which makes up the backbone of our system and is characterized by high-capacity, high-frequency and express services. Secondly, an effective regular-bus service that feeds the backbone and lastly, a collector service consisting of a mix of medium buses and service taxies that provide direct local service,” the mayor explained.

Indeed, the GAM has established a transport division within its offices, integrating responsibilities related to public-transport operations, traffic and transport planning, as well as traffic and parking operations, all linked to the city manager. “It is important to identify the deficiencies and establish a plan of action, so we started with quantifying the base-line indicators for both demand (through evaluating traffic and passenger volumes) and supply (network and services),” he recalled. “We are almost done with a massive transport data collection effort as part of our Transport and Mobility Master Plan, which we hope will provide us with answers on current conditions,” he asserted.
 
GAM hopes to use the data collected to develop what they believe will be a state-of-the-art, multi-modal transport demand model. “This will provide us with the necessary tool to evaluate and test our transport strategies, including the establishment of the backbone network, restructuring of current services and the implementation of parking and pricing policies to promote a greater use of public-transport modes,” the mayor said. Moreover, and in full recognition of the price tag of its potential endeavors, the mayor told Jordan Business that GAM has “began a serious dialogue with the national government to formulate funding mechanisms to ensure the complete coordination between Amman’s transport strategies and national transport strategies.”

Diffused Ownership
Whether the regulator is the PTRC or GAM, there are realities on the ground for all to contend with. “Tellingly, 88% of the public transport fleet is currently owned by single owners and not companies, leaving the sector severely fragmented and very difficult to regulate,” Minister Batayneh told Jordan Business last March. “To make things more problematic, the majority of these single owners do not have a contractual agreement with the government stipulating service level agreements and requirements. Thus, they have not been obligated to renew their fleets, pass passenger-security tests or commit to schedules,” he added. Expectedly, this level of fragmentation presents the regulating body with a convoluted and oftentimes arduous task of enforcing its authority, but it also presents private companies operating within the sector with their own predicament.
In an exclusive interview with Jordan Business, Moauyad Tarawnah, the chief executive officer of autobus, a consortium of four bus companies and one of the most recognizable brands within the sector today, explains that the paradigm of diffused ownership within the country’s public-transport system directly affects the productivity and efficiency and, thereby, profitability of companies such as his. “We are the only buses that use electronic displays on the front of the bus showing its destination. Each display costs the company €3,500. We are also the only company that has introduced the smart-card system, something policymakers were only dreaming about,” he said. “I’ve spent over $1.5 million in infrastructure costs to install the smart-card system, and every validator in the bus costs us another €2,200. These innovations are asked of the big operators, but not of small operators and individually-owned buses. Moreover, we’re asked to stick to headways, frequencies and efficiency, while smaller operators can work at over-occupancy rates, thereby making higher profits at lower cost,” he added, drawing attention to the inevitable “free-rider” problem the company faces.
GAM owns a 20% stake in autobus, in a situation that manifests the government’s recent focus on, and encouragement of, public-private partnerships (PPP). “As the regulatory body within the capital, GAM’s 20% share of autobus means we are its main arm in executing its plans for the public-transit sector. When GAM wanted to improve the image of public transport within Amman, all our buses were repainted, branded and some of the newest technology in the field installed. We’ve also placed a big premium on maintaining the cleanliness of our buses from inside and out,” Tarawnah explained. “We’re the first in line of implementing change,” he added proudly. “We are currently operating 42 routes, 32 of which begin and end within Amman. The other 10 routes begin outside of Amman, in nearby areas, but end within Amman. Indeed, this is our focus within autobus, to expand as much as possible within the municipality.”

Diffused ownership is not, however, restricted to public buses. Indeed, the predicament is pervasive within the Kingdom’s trucking sector. “Individual ownership in both public transport and the trucking industry has a definite, negative impact on the quality and efficiency of the sector, but Jordan is not the only country in the world with this kind of problem,” explained Mohannad Al Qudah, the secretary general of the Ministry of Transport (MoT).

“For political, social and numerous reasons, it’s very hard to shift private owners into corporations in a short period of time. However, the ministry has adopted numerous policies, including incentives for them to merge, and there are reasonable reports of success,” he continued. “One of the problems that we currently face and that we’re trying to resolve is regulating these individual owners, and we’re resorting to both positive and negative incentives,” Al Qudah added. Licensing, classification and enforcing regulation are all made that much more difficult within the current climate of operations, and policymakers are adamant in their belief that encouraging private owners to form conglomerates is the way forward for the sector.

In With The New
During the summer months, when the heat and dust intertwine to line the country’s buses and trucks with an unmistakable layer of grime, the vehicles’ state seem to stand out all the more. “About 58% of the country’s trucking fleet is over a decade old and singly owned,” Al Qudah suggested, and about one million trucks, according to Minster Batayneh, come through the country each year, either entering or existing.
In an attempt to incentivize truck owners to renew their fleet, the MoT has sought and gained approval of the Cabinet to exempt customs duties for those willing to scrap their vehicle, along with a reduction in sales tax from 16% to 7%. “Bus and truck owners have both heavily complained and tried to delay the decision, despite the fact that 30% of our fleet is past its operational life,” Batayneh added.

Private operators, like autobus, have been making it a point to renew their fleet, in the belief that increased productivity and efficiency will lead, in the end, to positive additions to their bottom line. “While in the rest of the world the working age of buses is 15 to 20 years, and sometimes as much as 25 years, the oldest buses operating under autobus are 1999 models, so they aren’t even ten years old,” explained Tarawnah. “While we maintain them to a very high level, we are still keen on starting replacement measures, starting as early as next year. We hope to start changing between 25 and 50 buses per year until, within the next five years, our oldest buses will be 2008 models,” he added.

Institutionalizing Change
Change, and indeed reform, cannot take place in a vacuum, and parallel progress is called for. Thus, in a bid to create conditions conducive to a sustainable, reliable and productive transport sector, the legislative branch of affairs must keep up with the evolution of change the sector is currently undergoing. “In the next couple of months, we are going to embark on a plan to raise the awareness of licensing and classification within the country’s trucking sector, with a focus on individual owners. To be honest, when these initiatives were first implemented, it’s safe to say they were conducted as piecemeal efforts, with a focus on corporations and big operators,” Al Qudah said.

“Now we’re trying a more holistic approach, and one that includes individual truck owners. By ensuring that all individual owners are licensed, another positive byproduct is borne. If we have a record of all operators, we can track their performance and complaints, something we currently don’t have,” he added.
 
The overland trucking sector also faces obstacles with the host of procedures and regulations they must adhere to, especially when crossing one of Jordan’s five borders. “A committee I chair, entitled the Trade and Facilitation Committee, is following an EU program in the hopes of facilitating a one-stop-shop, or single-window approach, to cross-border trade,” Batayneh told Jordan Business last March. “This will require a greater use of technology linkages, including the Internet and GPS monitoring for trucks that cross Jordan,” he added, commenting on the suggestion that policymakers lobby for unified procedures and regulations to govern incoming and outgoing trucks. “Trade facilitation is very important for supply-chain management. Between the MoT, the Ministry of Trade and Industry, the Customs Department and other entities, all have to be in line to maintain the competitiveness of Jordan and positing it as a trade route to be taken seriously,” the minister asserted. Indeed, the very way the sector is managed needs to evolve and mature, to a level where investments in transport infrastructure are attracted, sustained and maintained. It seems, however, that policymakers, especially at the ministry, have at least charted and mapped out the waters.

Moving The Masses
Mass transit vehicles, whether buses, subway trains or railway trains, constitute a part of life for inhabitants across the world, with their availability, punctuality and sustainability a notion taken almost for granted. However, both within the Kingdom and the region more generally, public transport is still in its nascent stage, with most of its users comprised of those who absolutely “need” to utilize their services, rather than a combination of need, convenience and financial prudence. “Public transport is the supporting foundation for realizing the vision of the Amman Master Plan. The demand for transport is, after all, the product of activity within the overall socioeconomic system,” said Mayor Maani. “The most pressing issue is to get Amman’s residents out of their private cars and into more cost-effective, reliable, safe and convenient modes of public transport. Even a modest shift would yield tremendous benefits in alleviating traffic congestion, let alone reducing the economic, social and environmental burden of traffic congestion,” he explained. “We have to first look at where we can make the greatest impact in reducing traffic. That’s why public transport is in the forefront.”

Indeed, the mayor’s concerns over traffic conditions within the capital are justifiable. Jordan has 7,500 kilometers of paved roads. However, it is safe to assume that due to an increase in the size of population, a noticeable trend in consumerism and what Minister Batayneh described as “the urge people have to own cars,” their numbers are now increasing at a staggering 10% annually.
“I served as the head of the Customs Department for a couple of years prior to my appointment as minister. There, we had to cap the clearance of new cars on the road at a stunning 250 cars per day, six days a week,” Batayneh recalled. “Our cities, especially ‘old’ Amman, were not built to withstand the increased level of traffic we are currently witnessing,” he concluded.
 
Indeed, between increased private-car users and extensive delivery systems operating within Amman, including logistic companies, fast-food delivery and newspaper rounds, clogged streets, especially at peak hours, are becoming quite the norm. Pressure on the capital’s roads and the ensuing maintenance required are both on an upwards spiral, placing correlative pressure on the country’s budget. “We estimate a saving of JD2.5 billion in road infrastructure investments by 2025 as a result of the new land use and development regime established in the Master Plan, combined with a vigorous program of investing in public-transport infrastructure,” Mayor Maani said proudly.

An economic model that assumes the recent liberalization of fuel prices, their subsequent upward trend and other ensuing inflationary pressures would push more Jordanians into the lap of public transport would, at least in theory, be rendered quite sound. However, the unprecedented highs that fuel prices have reached over recent months have not only had an effect on citizens’ wallets, but also on the operators within the sector. “We’re losing. Before February 7, the price of diesel was 31.5 piasters a liter. Today, after the two falls in the prices of fuel, it’s still at 69 piasters - meaning the price more than doubled in such a short period of time,” explained Tarawnah of autobus. 

“We are very proud to have taken the first concrete step toward a balanced strategy by absorbing a significant portion of the fuel price increase last June. We targeted our subsidy to large buses, which we view as an integral part of our future transport strategy,” explained Mayor Maani, in way of a policy recipe. “By waiving concession fees for the remainder of 2009, we basically provided financial support to large operators, amounting to about JD4 per bus per day. This, in turn, allowed us to cut in half the necessary hike in fares due to the fuel price increase,” the mayor said.

The Mega Projects
Real estate aside, the transport sector has witnessed some of the highest levels of foreign direct investment, or at the very least, interest, compared to other “core” sectors within the Kingdom. Mega projects have been set forth and, indeed, some have already commenced but as expected, encountered significant obstacles in their road to completion. Of them, the Amman-Zarqa light rail system, which was set to connect two of Jordan’s biggest urban populations through a 29-kilometer-long railway, hit a seemingly insurmountable barrier earlier this year when the Pakistani-Chinese consortium that had initially won the tender was forced to pull out. “The light railway is back on track, now that a new Spanish-Kuwaiti consortium has taken it on,” said Al Qudah. The $300 million, fully-electric railway, which will include 12 stations, is due for completion in February 2011, according to the MoT’s secretary general.

“Apart from reducing the pollution that has come to characterize the Amman-Zarqa highway, and the recent high accident rates, the light rail will provide users with a secure, safe and environmentally-friendly means of transport,” Batayneh commented.
Since Jordan Business’ interview with the transport minister in March, a two-year study to give the final alignment of the rail network to cross Jordan from north to south and east to west has been completed. The study, conducted by a Canadian firm and Dar al Handasah, has distilled a railway master plan, proposing a new railway of standard gauge, with a 1,435mm track, allowing it to interconnect with other railway networks outside of Jordan. “The national network railway is another big project that will promote Jordan as a competitive transit hub. The project is conducted under the auspices of ESCWA in Beirut, where 13 Arab countries agreed on the connecting points between each other’s railways systems,” the minister said. The government, according to Al Qudah, has given strong support to the project. “We’re in the process of moving ahead with the transaction appraisals, preliminary design and the promotional activities needed to bring in investors to meet the tenders. We’re moving quickly on this,” he said. The government, according to official statements, has allocated JD100 million in the 2009 state budget for the purpose of expropriating lands for the implementation of the project. In all, however, the project is estimated to cost a whopping JD2.8 billion for infrastructure, and JD1.4 billion for the purchase of a rail fleet.

By Air And Sea
On a drive up to the departures hall in Queen Alia Airport, banners with the initials “AIG” line the street, reminding commuters of yet another major project that the government has recently embarked upon. The project, costing over $700 million, was awarded to a consortium of French, Greek, Cypriot and Kuwaiti investors on a build-operate-transfer (BOT) model and aims to rehabilitate and construct new terminals within the airport. “It will be operated by Aéroporté De Paris. The ownership of the land and runways will remain with the government, but the superstructures (including buildings and hangars) will be transferred to the government at the end of the Airport International Group’s (AIG) contract. The project is set to enlarge the capacity of the current airport from 3.5 million passengers [per annum] to nine million in its first phase. If this target is met, then phase two will be implemented to increase capacity to 12 million,” Al Qudah said ambitiously. “The challenge in the next three years is to achieve this level of large-scale construction without disrupting the daily operations of the country’s main arrival and departure point,” he said, highlighting quite a starry-eyed notion. “While the project was launched during the tenure of the Bakhit government, the project has been given even more priority with the incumbent government. It’s going well,” commented Al Qudah.
 
Maritime transport has also undergone major transformations over the past few years. “The challenge has been that the port of Aqaba is an end-point rather than a transit point,” Minister Batayneh explained in March. “In 2005, the government embarked on joint venture with AP Moeler-Maersk of Denmark, a company that owns and runs over 550 ships worldwide,” he added.

“This collaboration is vital as it is secures $500 million in investments, and increasing container facilities. It puts Jordan on the map. We want to endeavor to be a major part in rebuilding Iraq and to be considered a major port of servicing it,” he said.

Moving Forward
With 4,500 medium-sized buses, 1,150 big-sized buses, 14,600 taxi cabs, 6,000 rental cars, 365 leased buses, 1,050 small buses and 4,800 “service” cars, the sector, to say the least, is vast, as are the responsibilities for its oversight, operation and regulation. With a diffused and fragmented sector, on both sides of the public and private border, the reforms called for to ensure the sector’s sustainability are a tall order indeed. With constant developments, some of which are shrouded in controversy, its complexity becomes even greater. That positive progress is happening is undoubted, and while the pitter-patter of steps can be heard, it’s sometimes hard to discern whether they’re all moving in the same direction.