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This is an archive article published on November 6, 2013
In the red,BEST fights its blues
The Brihanmumbai Electric Supply and Transport (BEST),which incurred a loss of Rs 633.50 crore last fiscal,aims at a cash surplus next fiscal year through fleet and fare rationalisation,says PRIYAL DAVE
Often described as the blood vessel of the Mumbai Metropolitan Region (MMR),the Brihanmumbai Electric Supply and Transport (BEST) undertaking plies its buses on over 500 routes,with a reach up to Bhayander in the far-off Western suburbs,Mumbra along the central line and Kalamboli towards Navi Mumbai. Yet,like all mass public transport system,the transport division of BEST runs into losses each year. The impact is borne by commuters,who are faced with repeated fare revisions and hikes,a trend witnessed since 2010.
The 2012-13 losses have been pegged at Rs 633.50 crore and bus commuters can expect yet another fare hike,the fourth since September 8,2010. The revisions,according to officials,are attempts to reduce the losses.
MOUNTING LOSSES & FARE HIKES<\b>
One of the oldest organisations in Mumbai and also the only one in the country which provides both electric supply and transport services,BEST was municipalised on August 7,1947,with 242 buses,one depot,23 routes and 2.38 lakh passengers. While fare revisions were a rarity prior to 2010,BEST has seen over 50 per cent hike in its fares in the last three-four years. While traffic income has increased by 30 per cent between 2010 and 2013 due to three fare revisions,cost of operating buses has also gone up by 35 per cent during the same period. As per the operational and financial data of BEST,the number of passengers it carried have fallen by eight per cent,while the average number of buses on road have gone down by seven per cent.
Om Prakash Gupta,general manager of BEST,who assumed office from May 20,2010,says the rationalisation of fleet has helped the administration curtail its losses.
While buses were purchased under the Central Government scheme back in 2009-10,BEST was not prepared in terms of maintenance,space and staff to run the additional buses efficiently, he says.
Justifying the increase in fares and the fall in the number of passengers,Gupta says,The passenger count of BEST was not done according to a standardised formula,until the electronic ticket machines were brought in 2010-11. Even though the data suggests that the number of passengers has come down,it does not reflect the real picture. Though the number of buses on roads has reduced,our operational efficiency has increased and so has the traffic income,indicating that more passengers are being carried. With improved efficiency and less breakdowns,we are now able to ensure better services to commuters.
WRONG DECISiONS<\b>
A series of bad decisions since 2006 are blamed for the financial chaos that has gripped BEST. Critics within the undertaking say that BEST is paying for past sins, which they describe as the hasty decision of employing daily wage workers during the labour unrest in 2006,which shot up the operational cost once the administration was questioned for flouting industrial labour norms. To add to the high labour cost,BEST went on to purchase 1,000 buses under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in 2009-10. In addition to lack of space to park or station the buses,BEST engineers were under-prepared to provide maintenance work to the new-age CNG buses. There was not enough staff to run the new buses and BEST was unable to hire people due to an already high establishment cost.
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The AC buses purchased under JNNURM,referred to as white elephants by BEST insiders,also backfired due to repeated failures following poor maintenance work. Of the 505 routes operated by BEST,only 18 are served by AC buses.
The BEST is now pinning its hopes on the start of metro and monorail services so that short distance AC feeder routes can be provided to commuters.
The intention is to make the most of the AC buses now. We are waiting for the Mumbai Metropolitan Region Development Authority (MMRDA) to begin metro and monorail services. Since passengers of metro and monorail will travel in AC coaches,once outside the station,they are likely to prefer AC buses. We are in talks with MMRDA to chalk out a plan of feeder services from metro and monorail services.
Besides the problem of excess buses,BEST is also witnessing losses on account of corridor services,which were started on October 16,2010.
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Bus services cannot compete with suburban railways. If a person has to travel from CST to Panvel,he is likely to prefer a train instead of a bus. However,political pressures have forced the administration to extend services in MMR. How can one expect to serve a region as big as MMR with just 4,000-odd buses? asks a senior official from the transport division.
Another senior BEST official,requesting anonymity,says,For any bus service to generate revenue,it is important that it runs up to 20 km only. Repeated political pressures,however,have forced the administration to stretch the services over longer distances,which has added to our losses. A long-distance route does not recover the cost of operating the route,which includes staff salary and fuel cost.
ESTABLISHMENT COSTS,HIGH FUEL PRICES A BANE<\b>
In a recent committee meeting,political representatives of various parties expressed their anger when the administration refused to pay Diwali bonus. Defending the administrations stand,the general manager told angry members that BEST was already paying 100 per cent dearness allowance,the highest by any transport body in the country,and also the highest basic grade pay in road transport,of more than Rs 7,000.
My establishment cost is 90 per cent. It is impossible for any organisation to run with such a high establishment cost. We have been paying arrears pending since 2006. How fair is it to keep revising fares of commuters and electric supply users to pay such a high establishment cost? (See box on establishment cost).
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In addition to a high establishment cost,the fuel prices have also escalated. In June 2009,cost of diesel was Rs 39.27 per litre while that of CNG was Rs 23.95. A year later,diesel costs Rs 41.37 a litre while CNG is at Rs 30.77. In July 2013,BEST had to pay Rs 68.39 for diesel per litre and Rs 35.25 for CNG. As on date,the fleet consists of 2,970 diesel-run buses and 1,352 CNG-run buses.
Countering the GMs claim,Sunil Ganacharya,a BEST committee member from Shiv Sena,said,It was the administration which accepted the demands of the labour court and agreed to give higher basic pay to its employees.
CASH SURPLUS NEXT YEAR?<\b>
After a fleet and fare rationalisation,the undertaking is now looking at a cash surplus of Rs 4 crore in the fiscal 2014-15. BEST has recently appointed consultants to study the requirement of new buses under JNNURM.
We will ensure that the specifications of new buses are as per our requirements. Also,care will be taken to ensure we do not have extra buses like we did last time, says Gupta.
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While a transport deficit recovery loss (TDLR) is being charged to 10 lakh users of the island city till 2015-16,a transport cess in property tax for the suburbs has been proposed by BEST to the civic body to cross-subsidise transport losses in the future.
priyal.dave@expressindia.com
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