Penang's public transportation: A radical solution

I like radical solutions. They push the envelope of conventional thinking. I want to propose a radical funding solution for the Penangites for Trams Campaign. I very much believe that this Campaign makes absolute sense in the context of Penang Island which is compact, densely populated and, a magnet for tourists. The general merits of the Campaign are very well set out in the URL link above. It is unnecessary for me to go into it.

Instead, I want to address only a few key issues that, in my humble view, will advance the cause of the Campaign. I hope the Campaign members will take this up and, I will be happy to embellish and develop the propositions, if called upon.

1. Set up a Penang Tram Foundation

The Campaign needs to go beyond the ranting and platitudes and step up the process. This can be done by incorporating a company limited by guarantee. I'm suggesting the name Penang Tram Foundation.

The basic charter of the Foundation is simply to promote and establish a public tram system for Penang.

2. Sidestepping the thicket of legalities

The Foundation, being a private entity (as opposed to the Penang State Government) has a just cause in the public interest to propose the establishment of a comprehensive tram system for Penang. The Foundation can meet the constitutional issues on infrastructure development being under the federal government by sending a formal proposal in the public interest.

3. Funding methodology: Public lottery

This is where I get radical. The Foundation should establish a public lottery to partially fund and finance the initial studies and surveys on the tram routes, the construction issues and tram technology to be deployed. The Penang Tram Lottery (a working name) will also be used to fund and finance the construction of the tram route, pay for any land acquisition required to create the route, the acquisition of the trams and, the subsequent tram operations.

4. Rationale for public lottery as a public finance device

The Campaign is clearly promoting the tram idea because it ameliorates the public transportation woes of Penang. It is a public-interest proposition since public transportation is a Public Good. And, if the federal government is reticent about solving the obvious public transportation woes of Penang, then the Foundation is a good vehicle to formalise the Campaign.

A public lottery is a form of public finance. It's economic merits are manifold if the goal is to create a public good. For a more technical economic analysis of the merits of lotteries as a means of financing public goods, please read John Morgan (of Princeton University) in an article entitled Financing Public Goods by Means of Lotteries.

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As I said, I like radical solutions. I very much believe that the issue of public transportation in Penang is a very serious matter that is already affecting the economic competitiveness of the state. The poor public transportation infrastructure is also having a deleterious effect on Penang's tourism.

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See also a related blog entry made earlier that provides a wider context to the public finance via public lottery proposition contained above at The Malaysian problem with privatisation of public goods.