A UN-backed report in 2014 pointed at the expected jump in urbanisation levels in India. While it said that over 377 million people lived in India’s cities and towns, it added that the numbers would jump to about 600 million by 2031. That calls for a huge infrastructure augmentation by the Centre, state governments and the local authorities, as the traditional public transport infrastructure in almost all major cities is crumbling. With metro rail services coming up in all major cities and citizens lapping it up, the city bus corporations are in the midst of a crisis due to mounting losses and disintegrating fleet. While the two major transport corporations in Delhi and Mumbai are incurring losses, it is Bengaluru with 676 Volvos in its fleet that posted accumulated profits and may show the way to other loss-making transport corporations.
The Indian Express takes a closer look at some of the public transport corporations.
The world’s largest CNG-propelled bus fleet operated by the Delhi Transport Corporation, like many city bus services across the country, is in the red. The main reason, argue officials, is that fares have stood frozen for the last seven years while wages along with operational and raw materials costs have been steadily rising.
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DTC currently operates 4,268 buses of which 3,781 are AC and non-AC low-floor buses with the rest being older, standard-floor buses. The fares of the AC bus service ranges between Rs 10 and Rs 25. For non-AC ones, it starts from Rs 5 and goes up to Rs 15. Fare-box earnings from ticket sales account for roughly 65 per cent of DTC’s total revenue and the rest comes from non-fare-box earnings comprising advertisements, sale of scrap, property development and related activities.
A look at the financials of last five years show that the revenue shortfall has been on a rise. “We calculate revenue shortfall by subtracting DTC’s operational cost from total revenue. While the revenue shortfall for the year 2010-11 stood at Rs 2,286 crore, it rose to Rs 2,917 crore in the year 2014-15 with a rise of over 27 per cent,” revealed a study called ‘Synchronisation of the results of financial analysis and operational impact of odd even-phase for sustainability of DTC bus operation’ in the International Journal of Science Technology and Management.
The DTC has been crumbling under increased load with its old standard-floor buses being phased out and fares remaining stagnant fare, said an official.
The ‘odd-even scheme’ in January 2016 infused a breath of fresh air for the public transporter when it saw its operations and wherewithal stretch to its maximum capacity, DTC managing director C R Garg had told The Indian Express.
“It gave us the confidence that we can meet any exigency as a public service transport option when required. We pumped in manpower, increased outshedding of buses and increased onsite maintenance by roping in our service providers Tata and Ashok Leyland. We pulled it off to the best of our ability,” Garg had said.
DTC saw an increase in its daily average outshedding capacity by 7 per cent from 3,712 buses daily in December 2015 to 3,972 daily in the odd-even fortnight in January. There was a 16 per cent jump in trips from the previous month. Fare collections also saw an increase, though it was primarily because of the additional of 1,236 private operators.
DTC said its efficiency has risen from 88 per cent in December to 95 per cent and daily earning increased by Rs 6 lakh during in January during ‘odd-even’.
Besides, revenues also rose from non-ticketing sources like construction of hotels at major bus depots, advertising through wallwraps on depots and terminals and advertising on buses, said a senior official.
“It is an observation that whenever a proposal for fare revision is proposed to the government, it is not considered due to socio-economic and political reasons,” the DTC says in its study of ‘Synchronisation of the results of financial analysis and operational impact of odd even-phase for sustainability of DTC bus operation’ in the International Journal of Science Technology and Management.
In the study, the DTC recommends automatic fare revision based on changes in fuel cost and consumer price index each year. “The fare review should be conducted twice a year. Adopting this strategy will make it easy to manage the gradual increase in fares for commuters,” said RS Minhas, DTC Deputy Chief General Manager (Public Relations).
The Brihanmumbai Electric Supply and Transport (BEST) undertaking which manages the bus services in the city has faced losses of more than Rs 900 crore till 2016. Excess expenditure and no significant growth in income earning have been assumed to be the reasons.
The transport department has witnessed a 140 per cent increase in the deficit figures since 2010.The loss figures of the transport department amounts to Rs 950 crore in 2015-16 in comparison to around Rs 400 crore in 2010-11. Among them, a steady increase in establishment cost over the past six years has been attributed to be the prime
reason for the same. BEST has incurred a 92 per cent growth in salary pay- outs of the employees without having any match to the income generated by the department in the past six years.
To curtail losses, BEST has claimed of undertaking measures like reducing its fleet of buses or strength of employees. Emphasizing on urgent steps taken by the department to curtail losses, Sanjay Bhagwat, additional general manager, BEST said, “ In the past two years, BEST worked hard on curbing many unnecessary losses in the annual budget prepared. Among them, 1,700 employment posts have been scrapped by the organisation which we thought were unnecessary. We are further relying on funds from Asian Development Bank of around Rs 400 crore to help increase our services outside the city premise.”
BEST has also received a grant of Rs 150 crore in 2014-15 to fund their activities for the transport department. In the recent announcements, the undertaking announced slashing the surcharge of TDLR on its electricity charges to match up to competitive power companies’ rates.
The number of daily commuters has gone down from 45 lakh commuters to almost 30 lakh in the past few years . BEST operates 4,500 buses on more than 500 routes in the city. On the other hand, the power supply department of the undertaking has witnessed a rise in its surplus figures. The surplus figures of power supply department has increased from 925.42 crore in the year 2014-15 to around 1195.12 crore in the year 2015-16.
One major corporation that may show light to others in terms of making profits alongside meeting the growing needs of commuters, improving services and operational efficiency is the Bangalore Metropolitan Transport Corporation (BMTC). The annual administration report 2013-14 shows that the corporation increased its gross revenue 21.3 per cent to Rs 2,013 crore from Rs 1,660 crore in 2012-13. The traffic revenue grew by 16.5 per cent to Rs 1,765 crore during the year.
While the corporation posted accumulated profits of Rs 367 crore as of March 2014, it however, posted a loss of Rs 147 crore during the year as its operational expenses went up by 19.5 per cent. It is important to note that the corporation augmentated 838 new buses during the year. The net addition stood at 344 buses, including 105 Volvos to its fleet as the overall fleet size increased from 6,431 in March 2013 to 6,775 in March 2014. The corporation scrapped/ transferred 494 aged vehicles from the fleet during the year.
While the operational front the corporation saw its average vehicle utilisation decline marginally on account of rise in traffic congestion, the corporation recorded a decline in rate of breakdown from 0.08 per 10,000 kms in 2012-13 to 0.07 per 10,000 kms in 2013-14. It also recorded a decline in rate of accidents from 0.08 per lakh kms in FY13 to 0.07 per lakh kms in FY14.