Cost issue puts bus cluster plan on holdhttps://indianexpress.com/article/cities/delhi/cost-issue-puts-bus-cluster-plan-on-hold/

Cost issue puts bus cluster plan on hold

The Delhi Cabinet has postponed a decision on the bus cluster model,planned to phase out Bluelines from the city,after Finance Minister A K Walia questioned the project’s financial sustainability last week .

The Delhi Cabinet has postponed a decision on the bus cluster model,planned to phase out Bluelines from the city,after Finance Minister A K Walia questioned the project’s financial sustainability last week .

A decision will now be taken at a high-level meeting on Friday,it was announced on Monday.

The project involves 17 different clusters with over 600 bus routes across the city. Star Bus Ltd had won the bid for the first cluster.

Walia had reportedly said the current model would cost the government more than Rs 85 crore per annum. In the present model,the government is to pay Rs 47.50 per km to the contractor (to reimburse for buses bought by operators). “If a bus runs,say,200 km per day,the government will have to pay Rs 85 crore per annum to the operator for 230 buses,” the official explained.

A major chunk of this would go towards procuring low-floor buses,in line with government guidelines.

But after the Finance department raised objections,saying the decision would put burden on finances,officials said the government may allow private operators to operate semi-floor buses. “That way,the cost per kilometre would also come down,” an official said.

The official said bus operators would bear all costs,including procurement of buses,staff and control rooms. Revenue collected from sale of tickets would go to government,the official said. “Fares will also need to be revised from time to time — but all this is going to put a huge financial burden on the government.”

The official said the government will also look into maintenance and parking of these buses. “If each operator is to provide at least 230 buses on each cluster,we also need to look into whether he has the capacity to maintain and park them at night,” another official said.

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How cluster works
* Operator buys buses: about 230 per cluster
* Govt pays Rs 47.50 per km to contractor to reimburse for buses bought by operators
* Operators have to give all ticket revenue back to govt