TrafficInfraTech Expo: Seminar: May 18, 2012

Private operators have brought in unhealthy competition: U Sudhakara Rao

Some of the STUs are already prospering, they know where they are going. Association of State Road Transport Undertaking (ASRTU) is an apex body of all our SRTUs and has about 55 STUs as its members. It comes under the Ministry of Road Transport and Highways and its Chairman is the Secretary of the Ministry.

ASRTU was established in 1965 for ensuring best practices in dealing with various issues relating to the road transport undertakings – procurement of services for testing of components, taking personnel, coordinating specifications, issue of fleet management, etc. We have a technical organisation in CRT, Pune. It is a testing institute that trains SRTU members and the staff from police, revenue and transport departments.

Now when it comes to the top management of all these 55 corporations, the CEOs, both at the national level and international levels, are very competent. We have visited a number of countries, seen their public transport study tools and incorporated the good schemes in our system. And a lot of things are already imbibed and absorbed in the Indian road scenario – the LED ports, GPS System, Passenger Information System, etc. ASRTU gives a lot of exposure to the top management about what is happening around the world along with many inputs. KSRTC undertakes advocacy for the public transport issues in general. At ASRTU in particular, we want the public transport to survive because otherwise we will be in a potentially dangerous situation. If you look at the statistics, urbanisation was about 15000 in 1976, now it is about 33% and by 2030, it will be 50%. Even the vehicle population was 10.6million in 1986, now it is close to 100 million, and will be about 300 million vehicles on the Indian roads by 2030. These are amazing figures which force us to think immediately about the solution for public transport and Indian roads.

You will be surprised to know that India has the largest road network in the world, next only to USA; we have about 200kms of Express Highways, about 71,356kms of National Highways that are golden corridors and about 1,37,000kms of state highways. Also, we have about 4,61,000kms of roads connecting the major revenue districts and 652 major districts in India and 26,00,000kms of rural connectivity. Approximately 5,93,731 villages in India are rehabilitated. There is a lot of scope for bus transport in India. So it is important that Planning commission looks at public transport policies very seriously.

Out of 55 corporations, 24 come under the Corporation Act and 12 under the Companies Act while eight are government departments and 12, municipal undertakings. They have buses ranging from 50 to 22500. APSTRC operates 22500 buses and all STUs in Karnataka put together, about 22000. Maharashtra has 70215 buses and Uttar Pradesh about 9000 buses. The smallest is Meghalaya with 50 buses.

About 80% of SRTUs’ operations is focused on rural and intercity operations including 1,83,000 villages out of the country’s total 5,93,731 inhabited villages. The remaining villages are also connected by private bus transport, other modes of transport and even unauthorised vehicles. Some motor and two wheeler transport is being operated in north eastern states and a few other states where STUs are not fully geared up to tackle the situation. 70% of our total population lives in villages and SRTUs play a vital role in connecting rural areas and facilitating mobility in them.

In its 11th plan, even the Planning Commission made it clear that depending on private sector for transport may not be the ideal solution. Many of the private operators come with utter disregard to traffic rules, unsafe driving practices, unscheduled operations and an approach tilted towards the usage of irrational cost cutting measures & tax evasion. The private sector has also adversely affected the performance of public sector by inserting unfair competition in the operations where a lot of dynamics, flexibilities and issues are involved. It is not an easy field. A private transport operator can operate buses on all the sectors of India. This is mentioned in the 11th plan report of the Planning Commission.

There is an urgent need for enhancing the services of public transport, particularly under the banner of State Road Transport Undertakings. The share of buses in transport too must increase. And this would include school buses, private buses, police buses and military institutional buses. The importance of road transport infrastructure in economic development or development of rural areas cannot be over emphasised. Public road transport plays an important role in economic development and social integration of the country. It is chaotic in some of the states like Madhya Pradesh. There is almost no connectivity in states where the STUs are closed. If the infrastructure is not good, even the private operators stay away.

If we compare our situation with other countries, India has one of the lowest bus penetrations of 1.29 per 1000 people as against countries like UK (2.93), USA (2.77), Japan (1.80) and France (1.35). Some of the developing countries too like Brazil (10.3), South Africa (6.5), Mexico (3.14), Malaysia (2.37) and China (1.84) are better off in this regard. As against a road network of 33 lakh kilometre, our bus penetration is extremely low. This is a sad situation.

Coming to the performance. Some people say that SRTUs do not operate well and lack a disciplined approach. This is not true. They are under close surveillance and monitoring by very competent CEOs who manage them professionally. The overall productivity of the SRTUs has improved and is reflected in the 11th plan (2007 – 2012). Fleet utilisation has gone up from 82 to 93% and vehicle productivity has increased from 229kms to 320kms. Likewise, spare productivity has gone up from 39 to 58.006kms while fuel efficiency has improved from 4.31 to 4.91. Safety is our major trump card. When you compare the accident rate, it is 0.15 per 1000kms for STUs. From last year’s fatalities in the country which were 1.35 lakhs due to accidents, the fatalities under SRTUs were about 4000. There has been overall improvement in the performance of physical parameters of various SRTUs. This has been possible because of various measures taken by them over the years such as continuing productivity exercises, improving occupancy ratio, introducing electronic ticketing machines, online passenger ticket reservation, vehicle tracking machines, internet transport system, etc.

For most of the STUs, financial operations cannot be fully covered by the revenue from fares and commercial exercises alone. Also, staff and fuel costs form a major part of the SRTUs’ expenditure. The fuel cost from Feb 2007 to July 2011 went up by 20 times. And it is rising further. Some of the institutes of SRTUs like DTC have personal cost of about 50%, BEST is close to about 45-46% and HSC Valilya is about 45%. SRTUs are not able to adjust the fares according to the rising fuel and other costs. In the last five years, despite the 20% rise in fuel prices, SRTUs have increased their fares hardly three to four times. The bus fares are also set keeping in mind the socio-economic objectives – they have to be low in rural areas and also in city areas because buses are used by the common man. Obligatory road concessions are provided to certain categories of commuters. Plus, there is a high burden of taxes. All these contribute to high cost of operations. Yet, Karnataka earned a net profit of र62.05cr, i.e. after tax deduction. Bangalore earned a net profit of र50.30cr while Maharashtra earned र29.29cr. Though the Orissa Corporation is small, it too made a net profit of र.17cr and Punjab, with its 1700 buses, र2.03cr.

Some people accuse us of incurring high costs on everything but that’s not true. If you compare the ratio of revenue to cost, it is only 85%. And if we include all types of areas – hilly, rural and urban – excluding the city operations, it is 92%. Everybody says city operations are not workable. This is in spite of absorbing all kinds of Acts. The Motor Transport Act of 1961 says that drivers have to operate for only eight hours of duty, a driver’s total duty cannot exceed 12 hours and he has to be given rest for half an hour after every five hours. We have to give wage increments for four years, all sick leave, half day paid leave, casual leave, etc. Then, there are the Bonus Act, Factory Act (covers all garages), Establishment Act under which all our shops are covered, Union Act of 1929 (amended in 2001) and all kinds of other Acts. I think our SRTU unions are much better when compared with Air India where they frequently strike work and inconvenience the passengers.