PENANG: The RM4.4 billion in fuel subsidy savings, which would be channelled to improve the public transport system, should also be used to provide incentives and interest-free loans to bus operators to upgrade their services, said Penang's Chief Minister Tan Sri Dr Koh Tsu Koon.

He called on the federal government to offer the same incentives and soft loans to school and factory bus operators.

"Many of these buses are old and in bad condition and need to be upgraded. And most of the bus drivers are in their 60s.

"The government should consider allowing more people to go into the school and factory bus business and also give them interest-free loans to upgrade their vehicles," Koh said at a press conference on March 2, 2006 to welcome the government's move to enhance the nation's public transport sector.

In a bid to cut fuel subsidies, the government raised petrol and diesel prices by RM0.30 per litre on Feb 28, 2006. It said the estimated savings of RM4.4 billion would be channelled to a special fund to improve the public transport system.

Koh said most parents prefer to send their children to school by cars due to the lack of proper school buses, which contribute to the worsening traffic situation in the state.

The same scenario prevails for those working in the industrial sector in Penang, who have opted to use their own vehicles as their incomes improved over the past 10 years.

This has also resulted in the industrial areas being choked with traffic while insufficient parking bays have led to indiscriminate parking.

Koh said that with the hike in fuel prices, many commuters would prefer to take the bus if the service was improved.

He also called on the government to include in the Cabinet committee for public transportation, mentris besar and chief ministers of states facing serious traffic problems like Penang, Selangor and Johor, who could offer input based on the problems faced in their respective states.

He said for Penang, which has earmarked a monorail project, the urgency for the implementation of an integrated public transport system is evident.

He suggested that the government also consider reducing the road tax for factory buses, which is currently at RM500 per year, and standardising the permit cost for school buses to RM150 for five years (similar to that for factory buses) instead of the current fee of RM100 for two years.

Koh also welcomed the recent announcement by Entrepreneur and Cooperative Development Minister Datuk Mohamed Khaled Nordin on the revamped public transport system for Penang, which was based on proposals from the state's economic planning unit and the Penang Island Municipal Council.