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May 11, 2009

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APTA BUS & PARATRANSIT CONFERENCE COVERAGE

APTA Business Members Learn of Global Opportunities

The global economy may be in a slump, but APTA business members heard a far rosier opinion of possibilities in Australia, India, and Brazil at a May 5 session on international public transit business opportunities at the 2009 Bus and Paratransit Conference. Speakers described the need for more private investment in public transportation in their respective countries and offered advice on entering the market.

The Land Down Under
Opportunities abound for American companies in Australia, according to Scott Grenda, chair of the Australian Bus Industry Confederation and managing director of Grenda Corp. in Victoria, Australia, which provides bus service and manufactures bus bodies.

Issues facing transit are similar to those in the U.S.: a glut of sprawl-based development, with more limited public transit in rural areas. Grenda noted a trend toward privatization of government services, stating, for example, that only 56 percent of public transit (train, bus, and ferry) in Sydney is operated by the government. He explained that the Australian federal government has no role at all in public transit.

Grenda listed a number of foreign companies operating in Australia and said that, because of low labor costs, Chinese-made buses have become increasingly popular. However, while buses from China are lower in cost, they also tend to have a shorter lifespan, so he recommended that U.S. vendors “come in with something innovative, something new, or work on quality.”

He cited “massive opportunities” for bus manufacturers in the next five to 10 years because Australia’s population is increasing at double the rate of the U.S. and 50 percent above the world average. “We have a growing market with enormous growth still required,” he added.

India Faces Rapid Urbanization
Ajai Mathur, chief operating officer of the Urban Mass Transit Co. in Delhi, India, discussed the “rapid urbanization” facing the world’s second most populous country. That, coupled with a profound dearth of every mode of public transit related to narrow roads and overcrowding, defines the Indian market, he said.

Like the U.S., Vehicle Miles Traveled in India are quickly outpacing population growth. One difference is that India also seeing rapid growth in two-wheeled vehicles—motor scooters and mopeds—because of the absence of reliable public transit.

The Indian federal government devised a National Urban Transport Policy in 2006, Mathur said, and is funding demonstration projects. In addition, the government is seeking greater involvement from the private sector.

The nation needs an estimated U.S. $26 billion in transit investmen, he noted, adding that India’s economic stimulus grants are financing the purchase of 14,500 buses at a cost of nearly U.S. $1 billion to improve bus service in 57 cities across India.

In Brazil, Looking Outward
The Brazilian city of Curitiba is the birthplace of Bus Rapid Transit, but that doesn’t mean the nation can’t benefit from foreign investment, said Helcio Raymundo, co-director of R&B Engineering and Architecture Ltd. in Sao Paulo. Brazil is the largest public bus system in the world, with a current total of 400,000 buses; private operators operate 40 percent of that fleet.

“Now is the perfect time to invest in Brazil,” Raymundo said, particularly for new technology. He acknowledged several challenges: need for more research and development; a required merger of strategic planning and urban planning; better management quality; more Intelligent Transportation Systems; vehicle and infrastructure improvements; and new financing models.

“Our real challenge is that we are always looking inside of ourselves,” he explained. “We need to look outside of ourselves. We need now more than ever cooperation and partnerships.”

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