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Delhi's bus privatization experiment

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Excerpts from a 2007 paper about details of Delhi's city bus privatization process is reproduced below :


The green signal for the privatization of the public buses in Delhi was given in 1992. That year, Delhi became the first city in India to introduce private buses on such a large scale. It was also decided that the private buses would be directly under the administrative control of state transport department of the Delhi administration. By simply being allowed to avail either a stage carriage or a contract carriage permit, any individual operator was eligible to ply a private bus in the city. Individual operators, under various schemes like graduate scheme, SC/ST scheme, ex-servicemen scheme, suvidha scheme and so on, were encouraged to apply for these permits.3 Thus began the era of the Redline bus in Delhi which, with hindsight, one can label as the earliest prototype of today’s Blueline. Soon enough, the Redlines proved themselves to be not only a menace to traffic, with fast and reckless driving, but also gave Delhi a steady death toll of pedestrians and cyclists. Not unsurprisingly, the ensuring public outrage forced the government to call off the Redline scheme. But what should have led to a decisive change of perspective and policy in the management of public transport became instead a simple change of colour. The Bluelines thus were presented as the solution, without exorcising in either spirit or substance the disturbing ghost of the Redlines.

In 1996, the Delhi government attempted a further refinement of the privatization model, which they termed as ‘under DTC kilometre scheme’. The plan was to now forge a public-private partnership; the essential aim being to enforce a level of discipline amongst the disorderly ranks of the many Blueline entrepreneurs, who were now operating across a number of bus routes in the capital. The ‘under DTC kilometre scheme’, was intended to subject the Blueline buses to the operational discipline of the Delhi Transport Corporation (DTC). Thus, as part of this new public-private partnership, the Bluelines were expected to follow the DTC timetable and have a DTC conductor (ticket collector) on board, with only the drivers in the employ of the bus owners. Further, the bus owners holding the requisite permit would get a fixed amount depending on the distance covered by the bus in a day. With these changes, the Delhi administration presumed that the scheme would be self-sustaining and require no subsidy. However, the kilometre scheme rapidly broke down, the partnership discontinued by early 2002, and the privately operated Blueline buses were released as an unchecked fearsome force onto the roads of Delhi.

In 2002, the Delhi administration once again sought to tinker with the transport plan with measures intended to be even more radical than those previously taken by the government. The plan, titled ‘Strategy for Deregulated Sectoral Operation of Delhi’s Stage Carriage Public Transport System’, argued that there was a need to further enlarge the scope of the ‘private sector’ in the existing public transport system by introducing ‘a scheme for augmenting the bus fleet …through corporate houses and big operators.’ Clearly, the Delhi administration, as early as 2002, had already begun to introduce corporate profit to regulate public transport in Delhi. This despite the fact that it was only too evident that both the Redlines and the Bluelines had turned dangerous for the commuters in Delhi precisely because of the attempts to privatize and run them on the principle of unchecked profit.

The plan of 2002 was widely criticized, especially by the innumerable small time bus entrepreneurs, who clearly were going to be the first victims of the entry of large capital. While big fish eating small fish is the general trend in processes for capitalist accumulation, the Delhi administration, as an added bonus to corporate profit in the public transport sector, even decided to sink the fishing boat itself so that there would be no check on the fattened big fish.

The brief account of the introduction of private buses in Delhi shows that the present crises of Blueline buses is being essentially sought to be cured by a more relentless commercialization/privatization of transport. The new twist this time round, however, could be that any added gain in safety from the ‘high capacity’ premium buses would be balanced by the fresh problems of access. That is, a large number of the poorer sections of the working population of Delhi will now have to pay higher fares for their safety and travel or be forced to risk travel on perhaps cheaper but even more rickety and dangerous private buses, whose owners will be even more voracious in their appetite for money as they will be constantly squeezed by the big transport players.

One can already envision how the problem of transport access is likely to take shape. The ‘high capacity’ buses are expected to charge high fares because the government would not provide any subsidy, a policy already outlined in the National Urban Transport Policy of 2006. The policy document unambiguously states that ‘the basic principle in financing public transport systems would be that the government should provide the infrastructure but the users (direct and indirect within the city) must pay for the operating costs and the rolling stock.’

Clearly, public transport in Delhi is moving rapidly towards its tryst with full-fledged corporate led privatization. For those making the decisions, it doesn’t seem to matter that the experience with profitable transport has been a chilling race with death. Since 1991, the mass public transport logic on the ground has basically been created to push small bus entrepreneurs to embrace desperate and fatal practices: they have to race for money to fill their buses to the brim with hapless commuters and cut corners with safety regulations. A vast chain of corrupt practices have developed in which traffic police and transport officials have been paid to look the other way instead of checking violations. Finally, roads are now increasingly crowded by the middle class that is apathetic to bus commuters because it drives cars acquired through loans.

In the original scheme of things, in Road Transport Corporation Act 1950, the rationale for mass public transport in the country was to facilitate social and economic development by offering cheaper travel, linking the hinterland with urban centres, providing subsidized service to the poor and students, better passenger amenities and well-organized maintenance. The commercialization of Delhi’s bus service has not only defeated the above but clearly makes the whole question of privatization suspect in terms of realizing goals such as safety, efficiency and affordability.

Thus, the recent attempts to solely blame ‘errant drivers’ is inadequate, if not fallacious. These ‘errant drivers’ have been made possible by the logic of public transport privatization; they are the result not the cause for turning buses into killers. And unless the monster of unchecked profit, whether by small players or corporates, remains the mainstay of the transport planning, Delhi’s roads will be unsafe and the body count will rise. The meaningful debate should be on developing the means to revive and reconfigure a sustainable notion of mass transport as a public good that is regulated by carefully designed norms for efficiency, safety and affordability.

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Naveen's picture

Delhi's deadly buses

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Excerpts from a writeup about the Blueline buses on "Our Delhi Struggle"

The Blueline’s grim numbers stem entirely from two perverse economic incentives: the driver’s salary is wholly dependant on how many fares he picks up, and each bus is in direct competition with every other bus on the route.

The Blueline buses are privately-owned, not city-run. While a city-run service would prioritize getting its citizens from A to B, a private driver is less focused on customer service than on overtaking the next bus down the road. After all, the faster he drives, the more competitors he passes, the more passengers he picks up, and the more money he makes.

The safer he drives, the more buses will pass him, and the less money he earns.

Blueline buses are not typically driven by their owners. Instead, thousands of drivers rent their buses from a smaller group of owners at a cost of

three or four thousand rupees a day plus maintenance

. With passengers paying between two and ten rupees a ride, drivers are forced to pick up a few hundred people before they can even begin to consider buying lunch.

Naveen's picture

Delhi govt fails to phase out Bluelines ahead of CWG

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Last November, the government had announced that an efficient private bus service, to be run by a corporate entity on the pattern of those operated in cities like Paris and London, would be launched much before commencement of the Games.

But with just a month left for the Games, officials in the transport department now said the "ambitious project" will not take off at all ahead of the event.

The cluster bus service was conceived as part of plan to improve the public transportation system in the city.

In fact, in November, the government had awarded a contract to Star Bus Services Pvt Ltd, a private entity, under which the company was to run 40 low floor luxury buses, having modern gadgets including GPS facility, on 32 routes in South Delhi.

As per the agreement, the Star Bus Ltd had agreed to increase the fleet to 250 later.

The contract was awarded to Star Bus Services Pvt Ltd after it emerged as the successful bidder in the tender process.

As per the plan finalised by the Delhi Integrated Multimodal Transit System (DIMTS), the transport department will finalise the bus fares, which will go to the government, while the private operator will be paid a fixed amount on the basis of every kilometre travelled.

But almost after 11 months, the project failed to take off.

Click here for full article

idontspam's picture

Concerns

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So it is an accepted fact that a stage carriage license allows private parties to participate in operating city bus services as conceptualized by NUTP, but I think the key is the concern on rash driving and overspeeding to make margins causing fatalities and violations in the process of operating the service which seems, on the face of it, to exceed the levels provided by a publically run organization like BMTC.

While accepting none of the models so far in the country have been able to address that, probably because of lack of attention to detail, we need to come up with specific SLA's with enforcement guidelines for each fail point and how a regulatory body will be able to enforce this? What is practically possible to do? What is the effort it will take from the various authorities?

A white paper from our side will help nail these nitty gritties can be of tremendous value add to authorities beyond what they can already do, which is, issue licenses. The white paper should touch upon how to enforce ethical pratices from private parties running city bus services and how those can be monitored by the regulator with nothing left for figuring out later. The target should be that points from this white paper can be put directly into an agreement that will be signed when providing the stage carrier license.

Not sure if I am the right person to start it though. Looking for help.

Naveen's picture

Kill street competition first

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Any alternate strategy to improve city bus transport in large cities with lot of road traffic must first attempt to prevent any form of on-street battles between competing buses. Without full focus on this, no solution will be safe. The only solution that appears feasible is to create zones for different operators (with not more than one operator in each zone).

Fulfilling social needs & wants by keeping fares affordable (since profits, if any are going to be ridiculously low if all investments are borne by operators) is for the public company, such as BMTC to continue to own all buses & collect all revenues themselves with only a percentage paid out to operators who can take buses on lease, whilst meeting a set of pre-determined criteria to boost efficiencies & maximize their earnings.

idontspam's picture

Typical O&M

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the public company, such as BMTC to continue to own all buses & collect all revenues themselves with only a percentage paid out to operators

This is a typical O&M contract which can be done now or even when BMTC is one of the players. Every operator can choose to have O&M with anybody they wish if it is their fleet.

Ok so price is a fail point you have mentioned but that doesnt address the rash driving or violations which seem to be the primary concerns. How do we address those? Does giving out one zone to one player ensure these fail points, I dont think they will. Even without onstreet battle with a competitor, a private bus operator could rush to make time and have violations within his operating zone.

How do you define zones within the cities? WIll it be each depot based? Wont this kill interzonal long routes? What would be a regulatory arrangement for interzonal revenue apportionment? Will a route based concept work better? Even then you have to address the ethical issues. How do we today trust BMTC not to have violations? Its only a social contract and BMTC doesnt seem to be doing too well either? Is there an absolute number of violations to benchmark or it is comparative benchmark?

Naveen's picture

Does giving out one zone to

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Does giving out one zone to one player ensure these fail points, I dont think they will. Even without onstreet battle with a competitor, a private bus operator could rush to make time and have violations within his operating zone.

If schedules are not too tightly packed, it should work well since the single operator (operating several buses within the zone) will not face on-street competition from other operators to capture passengers.

The single operator's revenues through ticket sales from all the buses that he operates must be shared between BMTC (for providing the bus), his company & some small percentage averaged & paid as an incentive to all bus staff in the zone (drivers /conductors). Such incentives to bus staff must never be directly related to individual bus earnings or the number of passengers carried, but averaged & paid to all staff operating within the zone. Additional incentives can be given based on km driven & based on how well they maintain schedules.

This will do away with poor road behavior & drivers are less likely to drive recklessly or speed dangerously.

Zones - would depend on existing BMTC arrangements vis-a-vis depots.

idontspam's picture

Presumption

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 ticket sales from all the buses that he operates must be shared between BMTC (for providing the bus)

Like AI asking kingfisher & jet to run their planes? We have gone from worrying about on road behaviour to changing the framework itself

Lets presume there will be private players owning & running buses on city streets.

This is the Delhi scenario, what are the challenges and how do we fix those without changing the participation framework itself. We have to agree on the framework before proceeding to find solution to the problem. Suggesting O&M is not value add from our side. 

Zones - would depend on existing BMTC arrangements vis-a-vis depots.

So how does revenue sharing for cross zonal routing work? Will a route based scheme be simpler to administer?

idontspam's picture

Game theory

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 Any game theory experts around? Want to know how we can apply it for this.

Naveen's picture

City Bus is not pure business

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Like AI asking kingfisher & jet to run their planes? We have gone from worrying about on road behaviour to changing the framework itself

As I have already mentioned several times before, comparisons between public transport & airlines or other such sectors is meaningless -- airlines charge users & pay for their own costs whilst also generating profits, whereas city public transport has a constraint with it's different objective, which is to provide safe /easy transport options at lower than actual acquisition /operating /maintenance costs -- any form of public transport such as Commuter rail, Metro /Monorail is also within this league & true costs cannot be charged as they will be too high on daily users.

PT is thus a social necessity & not purely a business, like airlines or telephony. In this respect, it is similar to PDS /subsidised health, etc & needs financial support through revenue generation from other means such as real estate, advertising, etc to subsidize PT services.

For bus transport, there is the added operational difficulty of sharing roads with private transport & competitiors, if any, when it is operated purely as a business. This is why it cannot be left entirely to private players to be operated as businesses since margins will be too meagre to maintain quality /safety. Some form of an association between govt & franchisees, PPP or by leasing is probably the only optimal way to improve efficiencies whilst maintaining quality & safety.

Unless the operational framework in Delhi (ie. allowing multiple private players to operate in direct competition on the same roads /routes) is changed, these unsafe /substandard conditions will continue, as outlined in the report/s above.

For Bangalore, as I see it, the challenge is essentially confined to improving BMTC's efficiencies in existing services with the help of private players since managing the largest bus fleet in the country in tune with users' needs, being a formidable task, has clearly overwhelmed their institutional abilities. Fortunately, they are self sufficient & recover all operational costs, in fact, generate some surpluses through a combination of revenue streams, unlike London, Delhi (DTC), or even Mumbai (BEST) which are bleeding their govts heavily.

So how does revenue sharing for cross zonal routing work? Will a route based scheme be simpler to administer?

Route based scheme may not work since multiple routes overlap with one another, particularly along the Big-12 roads that lead to different end destinations.

If the city is zoned roughly as shown in the diagram below, allowing only one operator in one zone, it will have few or no overlaps with other operators, thus allowing the operator to focus on a single zone closely & operate buses to get maximum commuters, whilst allowing the operator's buses to cross over the city centre/s from one end to the other (to minimize public inconveniences by reducing the number of transfers).

It will also help /allow the operator to organize feeder /distributor routes to maximize passengers within the zone. The operator will also automatically 'police' the zone & weed out substandard operators by operating services there instead. The operators must be paid incentives to recommend necessary route modifications /additions /deletions, etc. with focus on maximizing commuters & therby revenues whilst maintaining schedules /safety, etc.

Operators must also take on the responsibility to service the non-profitable routes that fall within their zones. BMTC's experience in operating such & all other routes will help in overseeing these functions.

 

silkboard's picture

Lessons, differences w/ telecom etc

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Some points, on lessons, differences etc:

  • Doing this like telecom (multiple players per circle, which would be zones or routes in PT case) would add a dependency on a non-transport side regulator - the police, to manage the roads. Delhi lesson is that you can't leave this part of regulation to traffic police and RTO's driving tests.
  • Fixed-period renewable bid system (single player per route, or per zone) is other option, but brings up issues of profitability. Can the City PT services be run profitably? Well, of course yes because BMTC itself does so today! But when you cut things down to zones and routes, there will be reds and blacks there, and people may not bid for routes or zones that are not profitable.

Some more points

  • If you leave the external aspect of pricing out, the fact of life is that most people will prefer private (as in personal) transport.
  • In case of telecom or aviation sectors, I simply don't have the option of using my own private telephone network, or private jet (except select few!).

Net net, even though many of us realize the need to bring private sector's efficiency to the Local area PT sector, how to do it needs more thinking as the landscape is a different from the parallels like telecom/aviation.

Think more, and you might foresee Govt/Eventual Land Transport regulator providing heavy indirect support:

  • By way of making private transport options less lucrative
  • By direct subsidies, incentives or pressure to operate in not so profitable routes as well (can do this by outsourcing bundles of good and bad route/zones)
  • By strengthening supporting infrastructure like traffic regulator, and micro-payments (smart cards, micro payments)

Really good discussion. If some guys with inside scoop from Delhi/Indore can provide data and their internal lessons, we could take up a project to detail out de-regulation for PT in Bengaluru (or Karnataka).

silkboard's picture

Zones and routes - Bangalore

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Similar to Naveen's diagram above, just an alternate version - way to think of zones and routes in Bangalore. The inner most area (CBD) is one zone, then multiple between CBD and ORR, and larger but probably not so lucrative ones between ORR and PRR. Story for outer areas could be centered around commuter rail stations, or trunk route stops/interchanges.

kbsyed61's picture

Urban PT is not just BUSES!

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SB, Naveen,

We need to move away from the notion of equating PT=Buses. PT also includes Autos/Taxis/Cabs and small good carrying vehicles. Unless these are made part of the PT system, then rest assured we are not looking holistically.

Talking of regulator/authority, the ideal would be

                                 Bangalore Metropolitan Authority

                                             /                                     \

                          Transport Authority                         Civic Authorities .....

                  /                        |               \         \

               /                           |                \          \

 Road based PT Auth        CRS        Metro      HSRL  ...................

RB PT authority's mandate should be:

  1. Nodal agency for metropolitan RB transport system
  2. Planner for the RB PT services in metropolitan area
  3. Regulator for RB PT services and service providers

-Syed

kbsyed61's picture

SB you were bang on Telecom comparison!

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SB,

You were bang on when you said can not compare PT with Telecom. When the sector was opened up for private players, the DOT (BSNL) operations were untouched. PT would be a different ball game and may need different approach. Even now the DOT is continuing and I am sure it is certainly doing their best which may not be on the same level as private players.

Some insights into Department of Telecom. After the Railways and Income Tax/Customs, DOT is the highest revenue earners for the union govt. Since they do not present their budget separately like Railways and Finance, people do not have an idea on the importance of telecom in Indian economy. I had close encounters working with technical and engineering staff in Bangalore Telecom during 1994-1997, always found to be competent, professional and was always ready for adopting newer technologies. One thing they have not up to the speed is use of technology for customer service area including billing.

-Syed

Naveen's picture

Some Clarifications

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Can the City PT services be run profitably? Well, of course yes because BMTC itself does so today!

BMTC is being given land for depots /workshops free of cost by govt. Part of these lands are commercialized (eg. TTMCs). Thus, they have revenue sources through real estate that they never paid for & this is how they manage full recovery of operational costs. If they did not have these non-bus operation revenues, they might never have managed to post profits or their profits might have been lower.

Further, in relation to total investments amounting to perhaps several thousands of crores (if present day land values are included), what profit they generate is too low & assuming private operator/s invest to the same extent based on market rates for land whilst keeping bus fares at the same level as BMTC, they would quickly go under since revenues generated would never be enough even to service debts taken for land acquisition for depots & for purchase of buses, let alone pay wages & maintain buses.

Thus, the assumption that private parties can cope with expenses for the same quality of services & still manage profits because BMTC manages to do so is entirely fallacious.

 

But when you cut things down to zones and routes, there will be reds and blacks there, and people may not bid for routes or zones that are not profitable.

Correct, only if franchisee/s are dependent on revenues through bus fares alone. The logical thing to do is to reduce their dependence on actual bus revenues.

Every zone will have both profitable as well as non-profitable routes. Conditions must be specified when zones are franchised that the entire zone (with it's non-profitable routes) must also be serviced. Though such non-profitable routes might not produce higher incentives for operation by way of passenger numbers, it would still make sense to the franchisee/s to operate there since any route operation increases earnings for them.

In the model that I proposed, pay-offs are also based on km driven & incentives if pre-determined schedules are met strictly. Thus, the franchisees will still have earnings, but to a lesser extent than high density corridors.

 

If you leave the external aspect of pricing out, the fact of life is that most people will prefer private transport

The fact of life is that people will use any transport (public or private) that suits their needs by way of competitive pricing, quality & routing. Being private (or public for that matter) does not automatically enhance credentials for the operator. The operator has to strive to provide services that are best rated by all users collectively (not as a particular group or as individuals).

 

The inner most area (CBD) is one zone, then multiple between CBD and ORR, and larger but probably not so lucrative ones between ORR and PRR. Story for outer areas could be centered around commuter rail stations, or trunk route stops/interchanges.

If zoning is done in fragments & does not cut across the city center/s, bus operation will also need to be fragmented & this will result in higher costs & inconveniences for commuters since they will have to make needless multiple transfers, assuming only one firm operates in each zone. Some fragmentation is unavoidable (such as feeders, ditributors, local closed loop shuttles within zones, etc), but trunk routes, the real 'bread winners', will have to be included for most zones.

murali772's picture

wrong perception of the government

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I had proposed a certain model(M) for shuttle services here, and, following discussions, modified it to M1.

Now, providing a reliable service where one doesn't exist, relieving the people from dependence on either costly or tedious alternatives, itself I would consider a social service. That's what is hoped to be met through the model/s, I have proposed. So, as long as the government doesn't impose too many stifling conditions, one can figure out enough ways to make the operations not just viable, but even profitable.

So, first of all, this whole mindset of the government as the 'maai-baap', the sole saviour of the poor, has to change (From what was intended as such during the days of genuine Socialism, today, it's become a total blood-sucking monster). Only then will things happen.   
 

Muralidhar Rao
silkboard's picture

Naveen, not sure

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Naveen, do not agree with this statement of yours

Thus, the assumption that private parties can cope with expenses for the same quality of services & still manage profits because BMTC manages to do so is entirely fallacious.

Because:

  • Same things we give BMTC for free (subsidy) can always be given to other operators as well. It is a well known fact that local public transport usually works with Real Estate and simlar subsidies.
  • There is not enough data, from our country, that such services can't be run profitably. There isn't enough data to show other way also. So essentialy, the jury is still out on this, the profitability assumptions are neither entirely right nor fallacious :)

You are making some assumptions, and so is Murali. The need is to evolve a road where one can try and test some theories, and then decide next steps, full blown, or strong subsidy driven controlled opening up, or status quo but with a strong citizen-driven regulator on top of the present public monopoly. The model M (rename to Praja-1?) Murali mentions sort of tries that - a renewable monopoly per zone, one zone to start the experiment with.

[also @naveen, in my earlier comment, I meant people prefer private, as in personal transport (Cars, bikes). you read that as privately run transport.]

Naveen's picture

Same things we give BMTC for

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Same things we give BMTC for free (subsidy) can always be given to other operators as well. It is a well known fact that local public transport usually works with Real Estate and simlar subsidies

This is exactly what is being tried with zoning, but subsidies are controlled entirely by BMTC & will have to be released with restraint & caution: by paying operators on km basis & number of passengers + incentives for maintaining schedules, etc. If subsidies are doled out to pvt parties without such regulating criteria, what motives will drive them to operate at all ?

There is not enough data, from our country, that such services can't be run profitably. There isn't enough data to show other way also. So essentialy, the jury is still out on this, the profitability assumptions are neither entirely right nor fallacious :)

There are the well known cases of Kochi, M'lore & Delhi where we have seen how safety /quality suffers when buses are in direct competition with one another with the levels of fares maintained nearly same as subsidised fares with govt run services. It is obvious that they cannot maintain safety /quality at these fares. In Mangalore, I know of atleast three bus owners who have now changed over to operating multi-axle tankers for transporting petrol & inter-city buses to bangalore & exited out from city bus operations due to very low margins.

Further, as we all know, most public bus services in the country are deep in the red (incldg Mumbai, Pune, Ahmadabad, Delhi-DTC) - check their budget data from web pages.

There is ample international corroborative evidence too: The ILO paper I had posted concurs that all PTs operate with subsidies & the European union has acknowledged the need for subsidies too. The phenomenon of racing has also been experienced with privatization in most places.

If you need further "data", you may research yourself, but I have done enough on my part & convinced myself.

The need is to evolve a road where one can try and test some theories

 

Enough testing has already been done in Delhi & about 600 people have sacrificed their lives there in the "testing" process.

 

If, with all this evidence, claims continue to be made that the business can be done profitably with subsidized fares, then I have nothing more to say & will exit out from this discussion (which I think is going nowhere, senselessly anyway).

silkboard's picture

Alright, thanks

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Naveen, there is no need to be upset here (referring to senseless comment from you). You have added lots of sensible arguments yourself, and so have few others. If you or Murali or others have to end up losing temper in such discusssions, then there is no point, you are absolutely right about discontinuing all talk of de-regulation.

About profitability and data:

  • I have not seen published financials of private city bus operators, that is why I say there is not enough "data". Murali has his sources and you have yours.
  • Everyone agrees, that subsidies (or real estate side-ops) will be required, we are not talking a pure land-transport only business in any case.
  • Should not bring in rash driving/racing issues when talking profitability. That's the regulatory failure part, needs to be seen separately from pure business aspects of de-regulation, at least for the purpose of this discussion (on de-regulation).
  • Yes, not many public sector operators are not making money (save for 2-3 exceptions), and thats precisely why we are discussing this topic - can this business run better, and profitably if opened up.

To me, the jury is still out on whether this can be done or not. Save for Metro, Delhi isn't exactly the trendsetter in any public system or operations (Electricity distribution privatization, jal board, DTC, red-lines, their own commuter rail etc) that one de-regulation failure at Delhi should lead to a stoppage of all thinking on the subject.

The debate here is proof enough - people get ideological or anecdotal and discussion heates up pretty quickly, thus those with moderate outlook like myself have no option but to remain as fence-sitters on the subject.

Naveen's picture

Fence Sitters Needed !

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SB -- about Bogota.....

"In practice, the bus companies are not responsible for the actual provision of bus services; they are merely intermediaries between the bus owners and the government. The bus drivers are critical actors in the provision of public transportation services. The competition between them has led to dangerous driving, disregard of schedules and mistreatment of passengers."

"The weakness of the state translates into policies that overwhelmingly and disproportionately favor the most powerful actors — the bus companies — at the expense of weaker ones, such as bus owners and bus riders. The bus companies extract ample rents from doing little to provide adequate public transportation and exploit bus owners by having them pay for the right to use a route and by forcing them to compete with one another. At the same time, bus owners support bus companies’ efforts to increase the fare above its true costs because it is one way to survive despite decreasing ridership."

"At the bottom lies the rider, the least powerful actor. In theory, a capable and strong government could protect the rider by diminishing these power imbalances. In strengthening the city government’s capacity and power, therefore, lies the beginning of the solution to the problems present in the public transportation system."


Source.

1) Initially, the status of bus transport in almost all developing country cities (like Bogota, Manila, Bangkok, Jakarta, etc) was one of total chaos with too many private unregulated providers (what is similar to Mangalore /Kochi & what has become of Delhi now). All these cities are still struggling to get out of the mess & provide regulated /efficient services, but serious attempts are very difficult owing to the bus unions, who can't be broken. Delhi will also continue to struggle now, unfortunately.

2) I think the assumption that the poor record of regulation in Delhi as the factor responsible for the blueline fiasco is incorrect, though it may have led to the case becoming more extreme than it might have been in other cities. From the above case study, it's amply clear that bus firms or bus owners handing over their buses to drivers for a fee is common even in Bogota.

3) Racing & driving recklessly to gain advantage in competition is also a worldwide phenomenon that cannot be ignored in any discussion on improving bus services in the larger Indian cities, since methods of attempting privatization without careful analysis can be catastrophic - there are too many bus dependent people, too many pedestrians, very high traffic volumes, besides other negatives with unregulated providers as stated above - even Bogota is not rid of them despite Transmilano. Thus, it cannot be set aside purely as a regulatory failure, but must be seen as an industry hazard that needs attention.

4) In India, in place of unregulated private providers (& the chaos & sub-standard conditions that come with it), we have public monopolies that lose tax payers' money, are generally inefficient & with few incentives to be responsive to passengers' needs, though BMTC has been performing somewhat better.

5) I don't think you will find any published financials (for private city bus businesses) since owners typically have few buses & do not maintain accounts (even if they did, it might not be available on the net). The question of whether or not bus business is profitable depends on what quality the bus provides. For the same quality levels that BMTC provides & at the same fares, the private operator might find it very hard to manage since he is unlikely to have expensive bus maintenance infrastructure & depots. Hence, typically private buses (on Hosur rd or Marathalli) are extremely shabby & very poorly maintained since they are forced to offer even lesser fares than BMTC to attract some patronage & cater to very low-paying commuters.

6) What I have been attempting is to utilize the existing strengths that BMTC has (ie. an institutional structure & experience) & combine it with possible private sector efficiencies to improve bus services.

7) As you rightly mentioned, instead of focussing on coming up with an optimal model to improve bus services in the city, the discussion almost always shifts to center around an extreme position - demands for small-time bus players to be allowed in parallel with no regulation, whilst criticizing BMTC no end & the assertion of viability of private run buses, though this is irrelevant in the context. In my opinion, opting for deregulation or allowing private parties of whatever form without careful analysis is something worse than what we have now.

8) The only way this can move ahead sensibly is for "fence-sitters" to participate more. I request you, IDS & others interested to use the "Urban bus toolkit" from the link above, read the various case studies, play with the tool & revert with your opinions rather than be drawn into questions of viability & dwell upon the rejection of an earlier application for operating buses.

The real issue clearly is far bigger than this -- finding solutions to distribute subsidies without any misuse by private parties & help commuters with more efficiencies in bus operations.

idontspam's picture

 Very nice toolkit, but 7-20

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 Very nice toolkit, but 7-20 doesnt work for me.

silkboard's picture

to clarify that cryptic comment from IDS

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... he means to say that question #s 7 to 20 in that World Bank toolkit (http://www.ppiaf.org/ppia...) are not working for him. Ditto for me too.

Now Naveen,

your point #1

... too many private unregulated providers ...

Why do you bring that back? Did we not concur on the need for a regulator first? "Unregulated" is of course messy. And we also discussed a model to keep as few players as possible, in fact just one, per zone or route. The trick is to find a solution that may fix the "too many" problem.

point #2, and parts of #3

... poor record of regulation in Delhi as the factor responsible for the blueline fiasco is incorrect ...

When drivers and vehicle owners don't have the fear of God in running over people on the road, it is failure of policing and regulation first, and anything else later.

Rest we are good, in full agreement. As for point #8

... for "fence-sitters" to participate more ...

We can participate regardless of who provides the services. In present day, one needs to make trips to BMTC's office. Once the sector opens up, it could change to making trips to the regulator's office. Since PT is not a pure-business sector, citizen/consumer's role is going to stay regardless of the operating model.

I had pretty much emptied my bag of arguments etc with this comment. And then I got confused with your last line :

... finding solutions to distribute subsidies without any misuse by private parties & help commuters with more efficiencies in bus operations.

Isn't this what we are trying to detail? Who disagrees with this objective? At least I don't! For some reason you have assumed that fans of de-regulation are asking for (may be Murali is, I don't know)  free-style privatization to get cowboy drivers on the roads. Objective has always been to get efficiency via involving private parties, as simple as that. Where is the disagreement then, I just don't see it!

Naveen's picture

SB-Thanks

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we also discussed a model to keep as few players as possible, in fact just one, per zone or route.

I was referring to the M /M1 proposal, which though being termed zonal, are actually route/s that might be in parallel with other BMTC routes. Anyway, now that you clarify that you meant to operate as a monopoly in one zone, it sounds better.

When drivers and vehicle owners don't have the fear of God in running over people on the road, it is failure of policing and regulation first, and anything else later.

Very true & agreed, but as I mentioned, instilling such fear has been practically impossible almost everywhere (not just in Delhi).

Once the sector opens up, it could change to making trips to the regulator's office. Since PT is not a pure-business sector, citizen/consumer's role is going to stay regardless of the operating model.

Agree, but what I meant was that... if we need to come up with something that can be made to work, it would have to be a startegy that would tie every loose end as also include BMTC as a responsible "sr partner" or "regulator" since this idea (of involving the pvt sector to improve efficiencies) will not be welcome at all due to the record already established by BMTC over the years, & the govt will most certainly maintain status-quo, & this will be real tough to turn around.

Thus, it is bound to be a prolonged effort, unlike the Namma railu campaign (Commuter Rail had been long overdue, anyway). Thus, apart from preparing an iron-tight initial proposal, we need the "fence sitters" & many more to continue to contribute to sustain efforts as we are going to face nothing short of Mt.Everest here, for sure!

fans of de-regulation are asking for free-style privatization

I was referring to you dwelling on the question of viability by pvt sector, which I think is impossible if all features of a well regulated, organized bus service is to be aimed for.

 

We would need to have GPS monitored buses, electronic ticketing, scheduled services, multiple methods of information promulgation: weekly ads /bulletins in newspaper/s with bus route nos. /times, easily editable bus time displays at all bus stops & on internet, many more inspectors for checking misuse by private bus firms & conductors /drivers, etc.

Whilst on the subject, I think count down bus time LEDs at every bus stop is a bit of an overkill.

idontspam's picture

I think count down bus time

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I think count down bus time LEDs at every bus stop is a bit of an overkill

This has already been in existance for more than a year in the BIAS bus stops around Bangalore and nothing of the sort of damages that were predicted have happened so far. All that is needed to be doen now is feed data to it and put more of them.

murali772's picture

time to move model-P

Naveen's picture

No more bluelines after 14-Dec

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There are over 6500 DTC buses out of which a minimum of 6000 ply each day. While DTC buses have been involved in 37 fatal accidents this year, Bluelines, only about 1600 plying on various routes, have killed 66 people so far. Last year, these buses were involved in 97 fatal accidents.
"The number of accidents caused by DTC buses is much lesser than that caused by Bluelines. No wonder, this decision will help us in bringing down the number of fatalities on Delhi roads,’’ said joint commissioner (traffic) Satyendra Garg.
Traffic police officers also point out two major problems that will be solved with the phasing out of the Bluelines. “One, these Bluelines have no designated parking space. As such, they often park illegally on roads and take up open road space. This is especially true for areas in northeast Delhi like Nandnagri and southeast Delhi’s Badarpur. Two, these Bluelines, allow footboard travel which often leads to major accidents. With DTC using its low-floor fleet judiciously, such accidents should also come down,’’ said an officer.

Click here for full report in TOI

murali772's picture

more are celebrating

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Guess who’s celebrating the phaseout of dreaded Bluelines? Yes, the regular biker, cyclist, pedestrian and the motorist on Delhi roads is overjoyed that he won’t have to face traffic blues but the happiest are the traffic cops.

Though the report put it as above, the ones who would actually be laughing all the way to the 'madhushaalaas' in Delhi are going to be the DTC mafioso, now that they can resume looting the organisation even more, with its losses dipping following the re-establishment of the monopoly status. They could perhaps exchange notes on the subject with their counterparrts in the BMTC, who have mastered the art over the decades that they have enjoyed the status.

Yes, the 'Blueline' operations were bad. But, that's because of all kinds of artificialities imposed on them, through the license-permit regime, thereby deliberately keeping out the VRL type (of Bangalore) players, and leaving it all in the hands of the riff-raff. What else can you expect of them? Not surprising that you land up with something akin to our 'auto' culture, and then you label them dangerous, and what not.

Delhi is not going to be anywhere close to solving its transport problems with a DTC monopoly, as much as Bangalore with the BMTC monopoly. More here

Muralidhar Rao
silkboard's picture

Delhi's new model - StarBus, Kingfisher, etc getting in!?

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Reference: Corporate bigwigs to make inroads into Delhi bus services

Some snippets:

Big corporate houses are set to hit the Delhi roads with world class buses that have automatic ticketing systems, providing commuters a "safe and reliable" option to the "killer" Blueline buses that are being phased out. The Delhi government has already allowed StarBus company to come out with around 230 buses in south Delhi, a Transport Department official told media.

Only 230, so it sounds more like an experiment. Read more ...

Other private players like Spicejet and Kingfisher may also be given a chance to bid for their entry into the transportation system, he added, not wishing to be identified.

Okay :)

According to the plan, around 600 routes in the city have been divided into 17 clusters. Each company will be given one cluster and will operate buses in a particular area.

Sort of like what we have talked about here (zones, or clusters, or bundles). And, there is co-existence:

According to the plan, the Delhi Transport Corporation (DTC) is to run 60 percent of the buses while in the rest 40 percent, the entry of corporate houses is permitted.

Some numbers on costs:

The Delhi government will provide the companies Rs.27-42 as earning per kilometre even when the service runs into losses, but it will take the ticketing amount.

The official said the earning per kilometre of the DTC at present is Rs.27 per kilometre in the absence of Blueline buses, but earlier it was Rs.18 per kilometre.

Read more. So Delhi is at it.

murali772's picture

doubtful if it will take off at all

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Have serious doubts as to whether this will take off at all - check this

Muralidhar Rao

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