Flug: Jams will cost Israel NIS 70b annually by 2040

Karnit Flug  photo: Eyal Izhar

"Allocations for public transport investment in Israel in 2013-2016 were only half the planned amount," Governor of the Bank of Israel Karnit Flug told a transport conference.

Governor of the Bank of Israel Karnit Flug opened her speech at the Knesset's first public transportation day with a short story highlighting the problem of public transportation in Israel, a subject about which Bank of Israel researchers have written a great deal about in recent years.

"One of the employees in my office lives in Hevel Lakhish and drives to work at the Bank of Israel every day. Last week, on two separate days, he chose to travel on public transportation. He checked the information published on one of the applications and went to the bus station in the hope of a quiet and comfortable ride. In both cases, I got an SMS from him "I'll be late today - the bus simply didn't arrive." In the outlying areas, I realized from this case, when the bus doesn't arrive, it sometimes means that the next bus comes only several hours later. The chances of an employee like he voluntarily choosing to rely on public transportation are very poor."

Flug continued, "The level of public transportation in Israel is lower than in most developed countries. Despite an increase, investment in transportation in not enough to eliminate or even substantially reduce the gap. After increasing to 1.1% of GDP in 2009-2013, investment in public transportation again fell to 0.9% of GDP."

Flug criticized progress in the public transportation development plan for being too slow: "Actual spending is 45% less than planned, not because the government canceled important development plans for public transportation, but because the plans are being implemented slower than planned. In an analysis published in 2016, he Ministry of Finance, Ministry of Transport, and planning agencies estimated the annual damage caused by congestion at NIS 35 billion, and if no major change is made, the damage is liable to double by 2040."

Flug noted in this context, "In view of the cumulative gap in public transportation investment and its inadequate level, the Ministry of Finance and Ministry of Transport published in 2012 a NIS 250 billion 25-year strategic plan for development of public transportation." She added, however, that the amount actually allocated to public transportation in 2013-2016 was half of the amount stipulated in the plan.

Flug also stated, "It is no surprise to discover that surveys of satisfaction with public transportation show a low level of satisfaction by international comparison. The result is less use of public transportation in general, especially for traveling to work. This probably also one of the reasons why the unemployment rate in outlying areas is significantly higher than in the central region.

"In relatively unpopulated areas, expanding the relevant labor market through good public transportation is especially important, particularly for people with limited earning capability for whom traveling by private vehicle is too expensive. The absence of available good public transportation therefore constricts the relevant labor market, thereby hampering the ability to take advantage of realizing earning potential by finding work corresponding to qualifications."

In conclusion, Flug said, "What is needed is a commitment by decision-makers to make a real change that will bring about a big step forward in the level of public transportation service in the coming years."

Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Karnit Flug  photo: Eyal Izhar
Karnit Flug photo: Eyal Izhar
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