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BMTC and possible open-market proposals or experiments

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We are coming off from this debate. Idea is to leave the debate, and talk specific proposals. There have been some high level talk on the subject from Murali, asj, myself and more, which are around how to open up city transportation market, market size, and good and bad parallels for this from around the world (London, Mumbai, Delhi etc).

Murali, Naveen - I think there is a way for us to join our energies. See, the points for common grounds are:

  • Need for a statewide regulator, from safety, amenites and pricing perspective. Refer these maxi cabs in Bangalore and Naveen's alleged dangerous drivers in Mangalore. Both require regulators. On amenities front, refer the contrasting bus stands (public and private) at Channapatna.
  • BMTC's statement that local shuttles are unviable business. Not sure if their statement is on record, but we have heard this on some forums. Refer Murali's own business plan for Koramangala shuttles, and Narayan's old proposal about TTMC driven local shuttle serrvices.
  • Poor performance of BMTC's "high-end" service - Vayu Vajra. Lets be fair here - BMTC tried something pro-actively and with good intentions - it assumed something anyone else would - that air travellers will need nice a/c buses. And this was a destination oriented service. But it hasn't worked. Whether its pedestrians or top company executives, people are either dying or getting hurt on NH-7 every other week, and Airport vajras haven't seen good uptake for same reasons we discuss so often - bus stands, information about services, time it takes relative to a taxi, last mile connect, bus interchange problems etc.

Now, our goal is common - make about 15-20% of car commuter shift to buses. Or, have BMTC/PT carry 55-60% of city's commuters. Right?

Now again, why would BMTC (or Minister Ashok) be apprehensive about opening up local transportation sector in Karnataka? Two possible things, right?

  • Worry about BMTC employees losing jobs
  • Possible mistaken notion that citizens at large may not like the change, basically, a belief that there are more Naveens and Vinay Baindurs than Murali or idontspam or Pranav or whoever.

With things laid down like above, wonder if we can lay down some clear and tangible proposals, like, say:

  • Opening up local shuttle services?
  • BMTC withdrawing from some routes to focus on trunk routes - TTMC to TTMC comnectivity?
  • BMTC dividing city into zones, and auctioning routes for each zones with terns and regulations that include pricing guidelines as well?
  • BMTC keeping destination oriented routes, and auctioning off direction based routes (Big10, upcoming circle routes) to private players.? Or Vice-versa.

And along with either of above, a constant would be for either KSRTC or DULT or BMTC itself (since it is the local transportation guru) to play the statewide regulator for urban local transportation.

Once we write some clear and little more doable proposals (compared to drastic ones that can't drive conversations like - sell BMTC off, or dismantle BMTC), I think we can try approach Ministers and Transport Secretary or whoever to lobby for them.

Comments

silkboard's picture

Some past posts

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Once again - will be great to avoid debating (yet again) whether open-market is good or bad. This thread is for those who think BMTC can help Bangalore by opening up the market a bit, and there are clear ways (and business case, demand) to get started.

Some past posts for reference, though these could be termed too high level or intangible:

dvsquare's picture

Bus stops to be given to private for full maintainence & care

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I mean to say that, BMTC can talk to various private companies which can own up the popular bus stops and take care of those bus stops for lets say 1 year or 2 year contract.

In this way, BMTC will not have to spend any money on the bus-stops etc, and at the same time companies will get to advertize themselves through bus-stops.

For example, a few bus stops on the outer-ring road, talk can be done with Intel, Hyundai, Maruti or other companies there.

pathykv's picture

Bus Stops

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So far as I know, Bus Shelters are built by BBMP, not BMTC.

BBMP gave the job to private companies who are constructing them as per their own design with an eye on only advertisements.

Many new shelters are duplicated, occupying the scace pavement space, without giving the commuters requiored protection from sun and rain.

The name of the bus stops is written in tiny letters which cannot be read, especially at night as lighting is provided only for the ads, but not the name of the stop.

In case BBMP give the building and maintenance of these stops to private companies the design should be decided by BBMP making it mandatory to display bus stop name on all three sides with minimum 50% space earmarked . Also the route information should be displayed promimnently.

K.V.Pathy

kbsyed61's picture

A win-win proposal!

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SB,

One win-win proposal would be on similar lines on what you have expressed. BMTC to consolidate on their operations and area of reach. That is, they can mark boundaries where they would continue serving. The areas beyond these boundaries can be opened up to Private, Public participation with:

  1. Operating under a regulatory body
  2. Operating under a clear and unambigous policy guidelines

Let me explain this with some examples.

BMTC operations to restrict to some limits like Hebbal, Peenya, Koramangala, KR Puram, Whitefield etc. Any service beyond these limits should be up for grab from Private, public service providers. All new routes, new services to new areas should go to these SPs.

Yes it is a big change, people might not like it. But people's travel habits are built around the available choices. This might sound a simple plan on paper but it calls for many things in place for it to succeed.

  1. It needs a separate Road Based Transport authority responsible for planning and providing the connectivity in Blore and its adjacent areas.
  2. It definitely needs a strong, pro active and working regulatory authority.
  3. BMTC then becomes just a service provider but with sole provider status in inner city limits.

Let me restrict my thoughts here. Will add more later.

Syed

Naveen's picture

Bus Privatization - A Way Forward

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The ground realities

I think there isn't much doubt left in assuming that private city buses of the kind seen in India are rash & unmindful of other street users, be these cars, 2-wheelers, pedestrians or bicyclists. It is of academic interest to conclude that such type of privatization is undesirable since it is unsafe & has brought in only small-time operators, wrestling with one another for scarce space in their pursuit for more passengers.

I don't think BMTC employees losing jobs is a matter of concern since they will continue to have employment with private parties that can operate BMTC bus services, assuming that BMTC leases out it's buses (with staff) on several different zones.

Further, citizens will gradually accept any service that fulfills their necessities for travel, irrespective of who provides them - as long as services continue to remain dependable.

This reminds me of a Chinese proverb: "To open a shop is easy, to keep it open is an art"

With only bus as the mode for public transport, I don't think operating independent local loop shuttle services would have been profitable - the volumes are bound to be poor, other than during peak hours. BMTC states that they had already tried this & found it unviable.

The city is also coming up with new mode/s of fast, exclusive-track mass transits, which will require shuttle services to feed it, but these shuttles would cater to area/s around stations rather than providing services to feed buses that do not enjoy exclusivity of any kind. Hence, shuttle services to feed mass rail transits may be more fortunate & their viability might be better.

 

Given these realities, what would be the way ahead, if privatization is to be opted for ?

Assuming this can be done with BMTC as the sole regulator, & it's buses are leased out to firms ---

The European examples where PT services concentrated on quality of service rather than battles between competing vehicles has clearly not worked in India - due mainly to low economic conditions, some BMTC volvo services being the only exception to this.

Allowing multiple bus owners to operate along the same route/s has been a recipe for disaster - thus, the logical first steps in any move toward privatization is to first find way/s to address these, apart from addressing issues that ensure reliability of services & cut revenue leakages :

1) Competition must be encouraged for the market, rather than within the market.

2) To ensure reliability, operator compensation & payment must be based largely on vehicle-kilometers driven, maintaining pre-determined schedules & with a component based on number of passengers carried.

3) A fare collection system that is wholly transparent & ensures revenues are effectively retained by government through the regulating authority. Thus, electronic ticketing will have to be resorted to for all bus or combined ticketing.

4) A system of incentives & rewards to commuters that encourages purchase of tickets, rather than opt to go without ticket & pay less (to the conductor). This can be by way of daily lucky dips; or coupons for free travel when a certain number of tickets (say, 25) have been accumulated.

5) Aggressive monitoring by BMTC, as regulator for ticketless travel, with severe penalties.

This means that bus firms will have to aggressively compete to be allowed to operate in one or more of several pre-determined zone/s on specified routes, offering various types of bus standards (equivalent to very basic services such as low-cost mini-buses, ordinary buses, parisara vahinis, pushpaks & volvos). However, once the firms have been selected, there will be no more wrestling on the streets to get passengers away from other firms, since only one firm will be operating in each zone.

 

What will this offer ?

Bus firms will have incentives to provide reliable services. They will be free of negative attributes such as reckless driving, speeding, low profit margins or cutting off other road vehicles in their pursuit for gaining advantage on the street/s.

Tolerence of illegal private operators that will fill remaining gaps & operate because of unfulfilled demands will also remain in check since bus firms have an incentive to protect their turf. The bus firms will be forced to make recommendations to BMTC to come up with solutions to meet such demands. They will also help police their respective areas to be free of illegal operators.

 

The challenges

1) First, the creation of political will & acceptance of a new, radical idea that addresses lacunae in BMTC's operations, with clear focus on commuters, ignoring it's present profitability.

Difficult, because :

a) They have been recognized the world over as a responsible operator, being conferred several awards each year.

b) Opposition by their staff since they have got accustomed of ways to siphon off some funds illegally, within the prevailing system.

2) Turf wars & possible lack of co-ordination may effect inter-zone travellers, initially.

3) Possible manipulation of vehicle kilometers driven: meters that cannot be tampered need to be installed (GPS monitoring of schedules & kilometers driven will help greatly).

4) Sharing depot infrastructure & resources, maintenance issues - these may be hard to overcome, but once established, it might work smoothly.

Naveen's picture

Bus Privatization - Possible Zoning

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Referring to the above, a basic, rudimentary way to plan zones is illustrated below. These sectoral zones will ensure buses ply diagonally across the city whilst also ensuring possibilities for interchanges inbetween. An inner ring (say a circumferential core ring) & an outer ring (on ORR) will enable direct connections between zones.

It will be quite a challenge to connect various TTMCs & Metro /Mono stations along these routes. A city map with existing bus routes would have to be consulted to work out the details & this will obviously have to be a time-consuming exercise.

pathykv's picture

Zoning

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Mr. Naveen,

I hope you are caqware of the Grid system which was worked out in great detail by the 'Commuter Comfort Task Force' a few years back and submitted to the MD of BMTC. Some of the recommendations were partly implemented. It included the circular routes also as being suggested by you.( Mr. Muralidhar can throw more light on this).

I feel the Task Force should be revived as discussed during our meeting with BMTC- CMT(O).

K.V.Pathy

 

silkboard's picture

Radial lines in the zone map

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So Naveen, the radial lines in the zone map would almost be big10 routes. That inner ring is sort of like what Kendriya Sarige was. Outer circle is ORR. In 10 years from now, you would have another outer circle (PRR).

Assuming the population density is even all through this circle, there are more routes competing for same number of people as you go closer to the center. Perhaps the full inner circle can be just two zones, north and south - just so that you get evenly sized zones - the rims/bands between inner and outer circle, and the two semi circles in the inner circle.

But zoning discussion is a bit of a digression. There would already be a few good existing ideas around drawing these zones. Te question is - what outsourcing or open-market schemes to create around these zones?

So your suggestion is to look at handing out local routes in each zone, and BMTC could run trunk routes, which could be defined as any route that falls in more than two zones?

You could also think around TTMCs as "base stations". Each TTMC can be operated by a party who must run services to adjoining local areas around - including feeders to local metro stations. And this operator must leave part of TTMC open to BMTC who would run TTMC to TTMC or longer distance trunk routes.

Routing would be a time consuming exercise - but this can actually be done by these very parties who would be interested in sharing this transportation burden with BMTC.

Who would be these parties then? Can we go talk to them first? Perhaps one of these private/illegal maxi cab operator will be a good source of data for drawing a business plan for zonal operators. On the higher and legal end, we can talk to Reva/Maini or Tata or Leyland to see if they see this to be of interest - local shuttle services can be electric or special vehicles, right? And the makers can expand from making into operations as well (up the value chain from selling transporttion device to full mobility solutions). Other candidates would be the private operators - not the ones at Mangalore/Kochi, but the ones who compete with KSRTC today.

Mr Pathy - thanks to tarle and Murali, good part of that CCTF report is right here on Praja. Here is the grid system they detailed.

Naveen - here is the diagram from CCTF report:

Naveen's picture

Remove negatives from present privatization patterns

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SB :

The zoning sketch is just a basic illustraion. To work out all details is actually a huge exercise - I referred to the BMTC route map & realized how complicated the task can be. When zones are created, it would have to be inclusive of Big-10 routes, say a couple of kilometres on each side of an arterial road (ie. Big-10 route) would ideally be the border between sectoral zones.

The inner circle can be larger than the erstwhile kendriya saarige, connecting all inner areas of the city, rather than a CBD circuit.

Routes from various sectoral zones will converge towards the city center - this is necessary as majority of the commuters will be city-bound & need to have direct connectivity. Also, the routes will have to go past the city center on to the other side, again to reduce the number of transfers for through passengers.

Two evenly sized zones in the centre would involve additional transfers & make it inconvenient for commuters. If some zones are larger than others, it would be acceptable (& may command higher bids during auctions) since commuter interests should be foremost in any plan.

 

These generalizations apart, I have emphasized that only one operator must be permitted to perform in each zone. An operator may bid & operate successfully in more than one zone, but there must never be two operators within a single zone. This way, there will be no battles or turf wars between operators.

BMTC can gradually change roles & become a regulator that oversees all city-bus related operations. Inter-zonal routes (indicated by circles) will have to be handed out as a separate zone with a separate operator, or BMTC, as regulator, may opt to operate it themselves, without any overlaps or duplication of services with other zone operators (again, to prevent turf wars).

TTMCs & Metro /Mono stations that fall within a zone can be catered to by the desiganted zonal operator, inclusive of local /feeder routes. If a TTMC or a Metro /Mono station falls on or close to a zonal border, both adjacent zonal operators can provide connectivity to the same, minimizing route overlaps as best possible.

The route plans can be detailed to include TTMC to TTMC services by the zonal operator, within whose zone two or more TTMCs are situated.

As you mentioned, routing recommendations will be made by the operators who will be interested in maximizing profits whilst the regulator (ie. BMTC) will ensure that schedules & services are maintained - payouts to operatars will be based on multiple criteria that gets them to maintain schedules, carry more passengers & drive more kilometers.

Who would be these parties ?

Well, as I see it, to start with, it would be the same small-time bus firms that have experience in bus operations - the only difference being that BMTC will be leasing out it's buses & staff. Thus, all hardware will continue to remain state-owned & operators will not have to invest heavily, at least initially.

However, as the process develops, more responsible players will be drawn in as it will begin to be seen as a respectable, profit-making business like any other, devoid of any wrestling on the streets, & accepted hopefully, by the public at large as a reliable & dependable service, better than BMTC operating it as a monopoly & with improved connectivity & maintaining timely schedules.

Electric local shuttles are still far away - the costs for minibuses are too high - I had discussed this with the reva people.

Vijay44's picture

BMTC leases out it's buses (with staff)

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Naveen, Which private operator would like to lease bus with staff from BMTC. The operator would like to have their own staff and their own buses maintained by themselves to make profit.  The private operator may want to lease bus from the manufacturer and enter into maintenance contract with the manufacturer.  BMTC should provide financial guarantee to the private operator to procure buses. BMTC could provide spec for the buses and other conditions (age of the bus etc), but leave the actual procurement to the operator.  Unlike BMTC, the operator could procure the right bus (make, size, engine power) for the right route. 

Naveen's picture

Bus Privatization: These are only the first steps

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Vijay,

I admit that such examples have not been seen in India before, but, some similar bus privatization efforts have proved successful in many cities in Latin America & Africa, particularly with ones that opted for BRTs.

There is bound to be some reluctance by the existing private bus operators to venture into this new field, no doubt, but since investments on their part will be negligible (other than office space & some bus monitoring infrastructure), some may take it on & that's all we need to start a process :

On the one hand, we have BMTC's very large bus inventory, bus depots, bus maintenance infrastructure & other assets, & also it's vast experience in operating a resonable & profitable bus service over several decades - attributes that make it suitable for establishing a public institutional structure that can be readied & pushed into place easily & quickly.

On the other hand, what we do not have are indigenous bus firms that have the sophistication to evolve themselves into modern corporate entities, without some form of government /public support, assistance, encouragement & a push towards that goal.

It is also highly unlikely that the many respected corporates in other areas would be interested to venture into an area that is known to be fraught with risks & is generally seen as low-grade business.

The challenges are how to transform an existing, large market structure into one that delivers in quality with better coverage over even smaller neighbourhoods frequently, in a cost-efficient manner & discourages generation of low quality private services that are springing up with the high growth rates of the city.

If the privatization process has to be pursued seriously, then obviously BMTC will have to freeze or cancel all fresh orders since such investment for procurements can be entrusted to the bus firms in the future, when the first steps taken have stabilized.

To start with & in the near-term, since investments into buses can run very high, these bus firms can be contracted with payment (based on incentives to meet certain criteria) for taking on buses on lease & operation for city services. All revenues generated can return to the state (at least, initially) to prevent digression of the city bus services into a new form of income that promotes illegal activities, for which safeguards must be pushed into place first, such as electronic ticketing.

Thus, broadly, the business plan must include at least these objectives, at the minimum :

1) Addresses commuter needs - safe & efficient services at all hours of the day with sufficient frequency & coverage.

2) Prevents uncertainties or dislocation of existing BMTC employees (this can be highly sensitive).

3) Calls for limited investment initially by bus firms with incentives to operate responsibly (criteria to be set out accordingly).

4) Avoids drastic changes since dangers associated with unsafe & sub-standard operation of services is very real.

5) Encourages bus firms to slowly graduate to professional bus companies that serve responsibly for the public good.

Over the long-term, the goals would be to minimize costs of travel & maximize private sector investments.

 

Naveen's picture

We cannot afford to risk around Naveen

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I'm reproducing Vasanth's comment here since it is related more to privatization of BMTC than to the meeting :

Naveen, I think we cannot risk around with small players. Already Bangalore has got enough number of rash drivers in terms of Indicas, the Tempo Travellers and Sumos. We are inviting one more problem here.

Better to be safe than sorry. Prevention is better than cure. Where is the cure for the rash driving Indicas, Tempo Travellers and Sumos ? We will add buses to this list like the DTC.Things in India easily go out of control and very difficult to bring in control, however you control.

I feel we are happy with whatever we have if we cannot get good corporate level players with proper practices and I think it takes years to take a shape even if they start now . I would rather welcome private players in say Metro or Monorail in terms of Public Transportation and not in Bus Transportation since the risk is less.

Murali Sir may say we are sleeping 50 years without asking, it has happened all over the world. Why is USA sleeping with Car Lobby? Sameway we are sleeping here with BMTC.

 Improvement on BMTC itself is better rather than the private operators. Things are happening, but, it is easy to criticize. It is not an easy game as said by armchair critics. When you challenge the armchair critics, they do not have any idea about the solution for the problem (I had challenged here on Praja, many times didn't get an answer, or some answer just to wipe the tears - not the right one). Private companies will endup the same thing and we will not have an IIM or IIT guy running the private bus show with new innovative things to do a magic.

This is what is my final stance!!!

Naveen's picture

Public monopolies are not longterm solutions

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Vasanth - there is a saying :  "If you do not create change, change will create you" !

it takes years to take a shape even if they start now

Quite true. However, reasonable as it is at present & without strong incentives to improve, the quality & reach of BMTC's services are likely to diminish in the long run with growth overtaking - in fact, overwhelming it's reach. Sensing opportunities, illegal, poor grade operators have already started stepping in to fill the vacant slots created (SB has posted some pictures of sub-standard private vans /tempos & minibuses on another post).

In many examples around the world, it is also an established fact that both - public monopolies & unregulated private operators are not very efficient, result in well known problems & end up in compromising quality. Typical problems of public monopolies will be overpayment for purchases, graft, corruption & poor maintenance, though the extents can vary considerably.

Generally, some form of an institutional & business structure can actually work better. All it needs is clever application of well placed incentives that persuade operators to concentrate more on customer service & less on battles between vehicles.

A system that mixes public regulation with private operation is an optimal approach for acheiving a competitive & transparent system that is responsive to user needs.

The ideas for phased transition that have been proposed has a chance to eventually see the system move to full privatization with good institutional control, protects job losses & prevents wrestling on the streets for the same commuters between multiple operators.

In this respect, it differs from Mr.Murali's idea which, in my opinion is to be avoided - such ideas have only encouraged unsafe roads & might invite more unregulated, illegal parties & even more chaos.

However, the process requires a great deal of supervison & the right decisions need to be taken at the right time. With praja's support, I don't see why it cannot be undertaken by BMTC.

idontspam's picture

Private bus operators

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 There is a misconception that just by replacing the public operator with a private one we would have achieved nirvana. Any operator works well only when there is substantial laws and regulation laid down. Choice for the transport regulator to terminate contracts, enforce penalties and choice for the customer to choose what he likes are the main benefits of opening up, it works for both side not just the traveller customer.

What prevents BMTC from becoming the best? The quality of people they have at lower levels, the inability of management to take substantive punitive action due to labour laws governing govt institutions, the inability to change things quickly due to the nature of the bodies and the multiple procedures and regulations etc.

First step is making up an independent regulator who will lay down minimum standards for buses.

Typically you will need to award contracts to 3 operators to operate all routes. BMTC could be the 4th player.

The zones need to be marked out clearly by the regulator. While the operators can start with select zones, there has to be minimum service covering all zones within a specific timeframe as minimum committment.

The class of service could be premium volvo type only. New routes and buses will need to be approved by the regulator. Frequency can be left to the operator.

New bus stops can be introduced by the private operator but need to be approved by the traffic police and earmarked specifically by the regulator.

The regulator needs to focus on creating a common technology platform to share timetables, exchange bus GPS information and provide information at bus stops in a seamless way regardless of the operator. They need to focus on creating depot space and manage space allocation for the operators. 

There needs to be a debate on price fixing to get to the right model. The regulator should typically fix a price band within which competitive forces can play and not fix prices as that can be detrimental.

As regards rash driving. There are 2 aspects, 1 where a strong regulator can cancel contracts on incidents, 2 where traffic police have figured out an effective way of enforcng safe driving for all vehicles on the roads not just for bus operators. There are threads on traffic calming and bus priority lanes all these need to be implemented

A well regulated private market will have spin off benefits in terms of competitiveness. For all you know BMTC will be forced to buckle up like AI did in the air transport sector. 15 million people in Bangalore will be travelling pretty soon. They will be using PT and the current BMTC isnt going to be able to handle that. Clearly reach for BMTC is unviable and that is not acceptable to the public.

We can also look at the London model

Naveen's picture

Privatization - Tread cautiously !

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"Whenever you see a successful business, someone once made a courageous decision" - Peter Drucker

 

There is a misconception that just by replacing the public operator with a private one we would have achieved nirvana. Any operator works well only when there is substantial laws and regulation laid down. Choice for the transport regulator to terminate contracts, enforce penalties and choice for the customer to choose what he likes are the main benefits of opening up, it works for both side not just the traveller customer.

I think moves toward privatization are better begun with caution & guardedly to achieve "nirvana". I believe it will be opposed (by both, BMTC & also the general public) if a start is made with discouraging & discipline imposing moves, such as penalities.

I would choose to use a more subtle approach, such as offering incentives for compliance with laid down procedures & laws, as outlined in the various posts above. Once the initial steps have succeeded, belts can be tightened as necessary.

 

What prevents BMTC from becoming the best? The quality of people they have at lower levels, the inability of management to take substantive punitive action due to labour laws governing govt institutions, the inability to change things quickly due to the nature of the bodies and the multiple procedures and regulations etc.

Exactly. This is why I thought that it might be best for BMTC to change role & gradually become an enforcer - they already know all the existing problems & hence, will be in a good position to set them right, as enforcers - problems that they could never correct themselves, being a govt monopoly, with the associated procedures that limit changes & effect governance. If they are appointed as enforcers, it would be a 'promotion' of sorts, acceptable to them with less resistance, & has a better chance of succeeding.

 

First step is making up an independent regulator who will lay down minimum standards for buses.

Typically you will need to award contracts to 3 operators to operate all routes. BMTC could be the 4th player.

The zones need to be marked out clearly by the regulator. While the operators can start with select zones, there has to be minimum service covering all zones within a specific timeframe as minimum committment.

The class of service could be premium volvo type only. New routes and buses will need to be approved by the regulator. Frequency can be left to the operator.

it promotes competion on the streets between the privatized volvos & the other services operated by different company (BMTC).

I feel this may not be the best approach. Why I say this is because of many reasons :

First, the newly appointed regulator will not have had any experience in city bus operations.

Second, BMTC & it's staff might oppose any moves to bring in such an entity as also the new parties in the ring for bus operations, sensing the risk of losing it's 'prima donna' status in the city bus arena, despite being hailed as a profitable provider.

Third, there is a risk:   Even if they did accept these changes, the new regulator will take time to learn the ropes, get acquainted with the system & govern effectively, by which time things may have gone sour & public pressures might force a roll back.

Fourth, when incomes of bus operators is directly related to the number of passengers they pick up, it will lead to poor behavioral patterns that can soon become severe & problematic. Typically, they will tend to ignore other road users of whatever form, & more specifically, try to cut off the other operator/s & towards this end, they are likely to drive recklessly, speed dangerously, stop randomly anywhere along the road rather than at designated bus stops to capture customers, etc.. This will lead to unsafe operations such as the blue line in Delhi, as also other privatized services in the country.

Fifth, in the worst case scenario, the bus drivers might wait at the beginning of a route (or anywhere inbetween when they feel that customers may be forthcoming) for the bus to fill up, before resuming the trip. This will make the scheduling unpredictable, driving customers to wait for the day when they can afford to buy their own vehicles - exactly, where we are today !


They need to focus on creating depot space and manage space allocation for the operators. 

With real estate costs soaring, it might be difficult for operator exclusive depot infrastructure to be established at multiple locations since routes will be spread across the city. This is why I mentioned that the leased bus route might work better, to start with.

 

As regards rash driving. There are 2 aspects, 1 where a strong regulator can cancel contracts on incidents, 2 where traffic police have figured out an effective way of enforcng safe driving for all vehicles on the roads not just for bus operators. There are threads on traffic calming and bus priority lanes all these need to be implemented

Enforcement will be a recurring problem when incomes relate directly to passenger volumes, as already mentioned. Changing operators frequently on disciplinary grounds will defeat the whole purpose of privatization. Exclusive bus lanes will work, but my approach was for conditions without such lanes since there appears to be no move toward this from the authorities.

Traffic calming cannot be along entire stretches, & will have limitations that may not stem such behavior sufficiently.

 

Mr Murali

your solutions I find rather convoluted

Well, I have quoted from examples of bus privatization from around the world whilst applying it to our specific city-situation, as already mentioned & from what I had either studied or seen. I know this approach is new to most, but change is not going to be made overnight for sure. A step by step approach is always the best - I have explained this in fair detail, I think.

As regards the boards in local language - this is similar to the regn no plates discussion. Unless a counry wide approach is taken, there is no point in accussing BMTC for this - they will point fingers to other cities or states as will KRV & others. I feel it's best to refrain from complaining & canvas for a country wide uniform code for this - I have already mentioned this before, & you have my support for this, if done in this manner !

idontspam's picture

The regulator

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 First, the newly appointed regulator will not have had any experience in city bus operations.

That is not correct, regulators are made up of people from the industry, Look at other regulatory bodies like TRAI, IRDA etc. THe only prerequsite will be that the people in are good and visionary and they go through different models in various other countries. This can be done with a study report by experts as well.

Fourth, when incomes of bus operators is directly related to the number of passengers they pick up, it will lead to poor behavioral patterns

This is where the regulator steps in with stiff penalties, automated monitoring, bus stop inspectors, roaming patrols etc. Today private vehicle bad behaviour does not have a proper redressal mechanism so you believe the status quo will continue. When we know what problems will arise we have been given the wisdom to prevent it by implementing appropriate measures. Havent we all been clamouring for strict measures to curb rash driving on our roads? Havent we talked of proper lane engineering and marking PT lanes etc? Stiffer fines, more legwork by police, what prevents the new regulator from taking it up?


Changing operators frequently 

How frequentlly and what punishment is yet to be determined. What I have quoted is the possibilities that will not be available in case of a public entity. You are assuming a cancelled contract at every incident which may not be feasible.

Traffic calming cannot be along entire stretches

It is one of the many measure that can be adopted not the only. 

Finally i dont believe the BMTC can be the regulator, they can only participate as an operator. If this is not clear we are sure of this failing from the get go. For ex. The DGCA is not AI and the AI cannot be DGCA.

silkboard's picture

Regulator, and first phase - an example

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The first step would be to define and pick a regulator. There is no clear one right now. Some think its KSRTC, not sure if that is the case. I mean today, if I have a problem with BMTC, who do I write to? BMTC itself, or may be the minister, definitly not KSRTC. So that would answer the regulator question.

DULT or BMLTA could be the regulator - but only if they have representation from public (transport industry, and consumers) as well. A pure government body shouldn't be the regulator.

Thinking a phased transition is the best. And in that sprit, there are some starting points, how about this one to kill two birds with one stone.

Allow point to point shuttles from major job centers to defined points on nearest major BMTC route

How would this work? An example will help

  • Bagmane Tech Park - operator must pick people from Old Madras Road, and airport Road, and drop them off at the park
  • Must provide 10 min frequency at commute hours (8-10am and 5-7pm)
  • 30 min frequency rest of the day
  • BMTC/BBMP (or Tech Park itself) will provide minimal transit infrastructure (shelters)
  • BMTC will commit to "good connectivity" on the corridors in question - Old Madras Road, and Airport Road.

Attractive for operator?

  • Tie up with companies in tech park can help. Tech companies can subsidize, thus making more people think of this as option
  • Negative point 1 - people will have to bank on BMTC to get them till Suranjan Das road on OMR and Airport Road.
    • Well too bad, this expecation anyway needs to be met
  • Negative point 2 - those who do use BMTC's Bagmane special services today, may not do so now because they will have to make an extra "change"
    • So, BMTC/BBMP will have to improve two bus stands and Surnjan Das/OMR and /Airport Road intersections. So what, this should anyway be done, right?

Incentives or implications for BMTC?

  • BMTC can take of its Bagmane Tech Park special routes. Add those to increase frequency of OMR or Airport Road routes.
  • Negative - BMTC would lose predictable sources of revenue (Tech park buses are pass bassed)

Sounds viable?

  • Assume that Bagmane Tech Park has 30000 employees, and only 10% use PT today. 3000 BMTC users. 30% will not use PT as companie provide a more lucrative cab option.  So, we are left to work on the 60%, or 18000 people.
  • If a third of this 18000 can be converted, 6000 users.
  • All of them using the shuttle at Rs 10 a day (5 up, 5 down), would give the operator 60000 a day. or 15 lakhs a month (25 working days)

Not enough? How do you make this more viable and attractive then?

What about forcing the tech park operator (Bagmane) itself to provide such service? That would be an indirect way of bringing in private parties for PT?

Think and think.

Vijay44's picture

Better management people/process/system

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On the other hand, what we do not have are indigenous bus firms that have the sophistication to evolve themselves into modern corporate entities

Couple of years back, can we imagine a corporate entity bidding for a toll road or a bridge?  Can we imagin a private operator running trains? no, but things have changed. There are no corporate entities in bus operations, because there is no business opportunity exists now. There are reputed operators (in TN, Bombay etc) who got 500+ buses in their fleet. I am sure if there is an opportunity they should be able to scale up pretty easily.  If there is an opportunity, i am sure corporate entities like  KTC/ ABT/ TVS will surely jump in. 

About the high investment,  The operator could lease buses from the  manufacturer ( or special entities controlled by the bus manufacturer such as Tata Finance/AL Finance) and get into annual maintenance contract with the manufactuerer. That is how it works in developed countries.  This will make the bus manufacturer also an stake holder indirectly, reduce the initial investment for the operator and also provide peace of mind.

I am not recommending privatization,  it is really sensitive and no politians would allow this to happen. So what needed is better management (people, systems and practices). Couple of options

1)BMTC should be managed by a board. The board members consists of government nominess, and those elected by people. Look at the Valley transportation authority in Silicon Valley, US,  people elect the board members thru ballot for 2 year terms.  The board appoints the MD and MD is in charge of Day to day operations. The board could seek help from external consultants (firms) to study issues and provide recommendation.

2)Implement a computer system to better manage the operations. I believe SAP and Oracle provide such solutions to many BRTS around the world.  As part of this implementation, some of the processes need to changed. This will help in better asset utilization and identify the issues early. At a minimun a good analytical solution (such as Siebel)  will bring up the issues.  [If there are any analyzis done, we will not be ordering 200 more Volvos while the existing ones are making huge losses]

3)More incentives to Drivers and conducters. Provide incentives to drivers for not making accidents, on time start/arrival etc. Categorize the drivers based on their driving history and give preference to the ones in the highest category. The board should decide on the rules, but the selection should be automatic (by the system)

 

 

murali772's picture

time for business

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@SB
Your Bagmane techpark shuttle services proposal looks perfect for my 'social entrepreneurship' project. And, now that BMTC has anyway stated that it is not interested in shuttle services, why don't we (I expect some PRAJAgalu would be interested in joining me) apply to the government for a licence to take it up? I expect they will grant the licence, but as a 'contract carriage' service, which, as I have elaborated elsewhere, is a minefield I would not want to touch even with a barge-pole. I will ask for a regular bus service licence (what they call 'stage carriage' operation - it's time these distinctions are done away with, in the first place - check here). If they don't grant it, can we all then jointly pursue this option?

And, if they grant it, in the course of a year or two, we (along with other similar players) can expand and cover the whole of Bangalore, leaving just the BIG-10, 500 and similar operations (at much higher frequency) to BMTC. Somewhere along, we can take over the high-end operations also, may be in tie-up with a Corporate.

So, all game?

@IDS
I can't agree more with each of the points you have made.

@vijay44
Firstly, welcome to PRAJA. Your writing makes immense sense too. But, I only agree partially with "I am not recommending privatization,  it is really sensitive and no politians would allow this to happen". I am not asking for privatisation of BMTC. But, their monopoly has to go.
 

Muralidhar Rao
s_yajaman's picture

Assuming we start Praja MTC :)

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 Let's assume that we start Praja MTC.  I am assuming that a regulator has been put in place who will penalize us, etc etc.

a. My competition is not BMTC - but the 650,000 cars and 1.5 million two wheelers in Bangalore.  My future competition/complement will be Metro.

b. Let's assume that 75% of car users and 50% of two-wheelers neither take BMTC nor plan to.  That gives me about 500,000 cars *1.5 (assuming 1.5 passengers/car) + 750000*1 from two wheelers or a market size of about 1.5 million to tap. 

c. Let's also say that some of these people will not leave their cars/bikes because they need to use it through the day - let's say 40% of them will never use a bus because they are sales people, etc etc.  That still gives me 900,000 people and I would like to meet all their weekday commuting needs and 50% of their weekend commuting needs.  That means 1.8 million trips on weekdays and about 0.5 million trips on weekends.

d. If I need to enable 1.8 million trips on weekdays and I plan routes well enough and achieve about 1200 people/bus/day (18 hr operations), I need 1500 buses to service this need.  Or, I should be able to manage 8 round trips/16 one way trips with a dynamic capacity of 80 along each trip.  Possible?

e.  Average distance travelled = 10 km (no good reason).  Should be competitive with a bike running cost - about 75p/km.

Economics.  Capital investment in buses - 1500*30 lakhs = Rs.450 crores.  Other capital investment @20% = 90 crores.

Revenue - 18 lakh trips*Rs.7.5 *5.5 days*52 = Rs.380 crores

Advertising revenue - say about Rs.10 lakhs/bus/year = Rs.150 crores/year

Costs - 

Depreciation @15% = 80 crores

Diesel - 1500 buses * 16 round trips *12 km /4km/l *365 = 105 crores approx

Maintenance - each bus say Rs.1 lakh/year = Rs.15 crores

Salaries 3 drivers/bus (no conductors - we are fully smart card) - 4500 drivers @ 2 lakh/year - Rs.90 crores

Other staff @10% (checking, back room, etc) 500 *3 lakhs = 15 crores - total - Rs.105 crors.

Rentals for bus stops/bus depots??

Leaving the last costs will total Rs.400 crores/year. 

Margin is Rs.130 crores.

Assuming rentals run into Rs.50 crores(???) we can do Rs.80 crores as PBIT.

Murali-sir - do you have Rs.500 crores to invest?

Srivathsa

Drive safe.  It is not just the car maker which can recall its product.

Naveen's picture

Bus privatization - examples are different

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This is where the regulator steps in with stiff penalties, automated monitoring, bus stop inspectors, roaming patrols etc. Today private vehicle bad behaviour does not have a proper redressal mechanism so you believe the status quo will continue. When we know what problems will arise we have been given the wisdom to prevent it by implementing appropriate measures. Havent we all been clamouring for strict measures to curb rash driving on our roads? Havent we talked of proper lane engineering and marking PT lanes etc? Stiffer fines, more legwork by police, what prevents the new regulator from taking it up?


What I have stated as weaknesses in your suggestion are after referencing various bus privatization efforts in many developing country cities. I could not find any city that had privatized it's buses successfully with multiple operators along the same routes in mixed traffic (as also with BRT lanes) due to the difficulties faced as enumerated above.

Many tried on their lesser populated roads. Implementation measures with severe monitoring, stiff penalties, proper roads, cameras, etc. etc. have all been tried & privatization had to be rolled back each time with public takeover in most of the cities due to continuing problems & difficulties on the roads.

I think we would be wiser if we analyzed privatization efforts & bad road behaviour in our smaller cities (Kochi/Mangalore) as also in Delhi, a large city with blue line buses that killed pedestrians daily. However, such analysis is never done by most & the clamour for enforcement continues when street road vehicle volumes have crossed the danger level decades ago. To get the streets back in order, traffic has to be reduced - nothing else will work.

Even when street vehicle volumes were much lower & pedestrians lesser, such attempts to create competition on the roads had failed. So, it is wishful thinking that continued clamouring will work with yet another threat.

Currently, I am travelling & therefore am short of time to post links to articles about privatization examples from Latin America & Africa. In Asia-Pacific, mostly all privatization efforts have been with BRT & this has been with multiple operators, but on separate routes (only one operator per route).

Ravi_D's picture

First thoughts on the issue....

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Let us decide what we think needs improvement first:

BMTC seems to 'operate' (run a bus service) fine, right? Let us not forget our goal - improve PT. BMTC is one of those comparatively better run organizations in our public space. Let us exploit and enforce their strength.

Most of the issues seem to relate to 'management' details, is it not? Things such as Route Planning, Infrastructure (ticketing systems, GPS, website, what have you), quality control, training, maintenance (vehicles, bus stops, things to support the infrastructure), long and medium term strategy, interface with other modes, advertising, taking politics out of decision making...

I'd vote to ask external partcipation in these areas first? If above details are taken care of professionally, and BMTC is mandated to implement all the decisions so made by private or otherwise competent parties, why bother mess with other mad-men already creating havoc on the roads?

What say?

Ravi

murali772's picture

a tall order

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@Ravi

Before all of what you have listed, can you first get them to change the callous way the boards are written and displayed. Even if the board here is displayed right side up, you'll notice there are two sets of writings - one in blue, another in red. Very likely the bus is operating on two different routes at different times of the day. The crew/ staff can't even bother to change the boards for the different operations, and have therefore come up with this 'ingenious' solution. Well, the approach is 'the regulars know, so why bother with these minor details'. And, therefore, it's only the regulars that they will get. But, is that a satisfactory situation? And, if left like that, tomorrow a driver may come up with 'seeing my face, the passengers know which route the bus is taking; so, the board is not necessary'.

As to the matter of BMTC doing a 'fine' job, I have commented enough - I'll not add more. All I would like to say is that if the %age of trips made using PT in the city has to go up from the present dismal level of 35% to some respectable level(and, that's a must if we have to contain our burgeoning traffic problems), the present level of performance is not going to be able to achieve it.

And, what you have suggested is out-sourcing of many of the functions, right? Do try it, though, from my personal experience, I'll say it's a rather tall order.
 

Muralidhar Rao
murali772's picture

feasible even at micro level

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Yajamaanre'

Not just at macro level, even at micro level, it's very much feasible. I had worked out the economics of an intra-Koramangala shuttle service operation with just 6 Swaraj-Mazda buses, and found it very much feasible. And, when I sought the co-operation of the Koramangala Y-group community, the response was overwhelmingly positive, even with many of the members being from two-car owning families. One member even came forward to under-write the cost of a bus!

So, the start can happen even with a much smaller sum (than Rs 500 cr). And, why have you provided capital cost at Rs 30 lakhs per bus? Covering for kick-backs?:)))
 

Muralidhar Rao
silkboard's picture

srivathsa - thanks

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Liked that - lots of numbers towards a possible business plan.

So, Rs 80 Crore PBIT on 500 Crore investment (capex) ? Assuming you would involve 2 or 3 operators, 20-30 croreo for each per year on 160 Crore worth investment

How do you cut on the capex? May be via the flexible bid option

  • Option 1 - BMTC leases out Buses. They control the equipment real tight - drive bargains via single point procurement, and drive standard specifications.
  • Option 2 - If the operators would rather prefer to put in the capex, they can expect more control and freedom on equipment/rolling stock

You put in rentals for bus stops Rs 50 Crore - so that rent is to be paid to BBMP in return for maintenance and upkeep. Can be avoided - BBMP collects taxes to maintain public amenities.

Did we miss road tax outgo in the plan? Can be subsidized by the city/BBMP/BDA.

Bottomline, so far:

We have seen some variants. Naveen's point is lod and clear - its not enough to have the regulator in place (which is a pre-requisite to get started), but the operator should not be incentivied purely on carrying numbers on routes competing with each other or BMTC. Not until we are assured of better traffic enforcemet in our city (current record is disaml there)

  • bigger level - 2-3 operators each, with potential to make 20 Crore in profits / year on capex of Rs 160 Crore
  • smaller level - local shuttles, destination bound routes - Rs 20-30 lakhs per year on capex of 1.5-2 Crores
  • Other forms, little idea of numbers thereso far:
    • Outsource select trunk routes (say the Big10s, or Circle Routes) - most think this is avoidable, will lead to usual problems of rash driving etc.
    • Carve out zones (like railways), and lease out each zone to 1 (or 2) operators, with service quaity linked renewal periods?
    • Outsource route-planning and operations (Ravi's thought, but how? Not easy to cut out such integrated function from BMTC just like that)

There are more. Can we possibly take this to a minister or BMTC itself. We will need to put this out in nice presentation though, with clear messaging that BMTC can easily make what they make today, and yet have space for other players. Will this approach give us a chance?

 

s_yajaman's picture

learning from the airline industry

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What lessons can we learn from the airline industry?  One we should not learn is how to turn billionaires into millionaires! :)

a. Pilot licensing and training - contrast this to how people can buy licenses OTC for road vehicles

b. Flight control - ATC is boss.  Pilots have to obey (there is a great incentive to do this when you know you can lose your life if you don't).  Similarly how air corridors are marked, etc 

c. Maintenance procedures - laid out unambiguously (I hope) and hopefully followed.

d. Safety procedures laid out and followed.

I think (a) is the one that makes the difference.

What are some distinguishing features

a. Restricted access - however much I want to, I cannot just take off in a plane and hope to go unnoticed. 

b. Cannot stop along the way at undesignated stops and pick up people

c. Fewer but more expensive vehicles.  Easier to monitor.  Every plane has a code and is assigned a flight path. 

d. Exclusive travel paths.  No interference from other vehicles by design.

In other words more amenable to regulation. 

How do we replicate some of this in the intra-city bus industry. 

Srivathsa

 

Drive safe.  It is not just the car maker which can recall its product.

Naveen's picture

regulators are made up of

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regulators are made up of people from the industry, Look at other regulatory bodies like TRAI, IRDA etc. THe only prerequsite will be that the people in are good and visionary and they go through different models in various other countries. This can be done with a study report by experts as well.

On another thread, an argument was made (& well supported by all) that people in administration were improfessional & not up to their tasks - I agree with this :

The quality of people in the public sphere is very low. They are from an archiac system which lay emphasis on defensive administration instead of providing leadership in taking the city and country forward. These people are not going away they are only shunted around the govt agencies. The visionaries in administration are very few.

This being the reality, I really don't see where these "experts" are going to be sourced from. In Dubai & Singapore, for example, they had relied heavily on Western professionals & still continue to do so. In India, such means may not be easily accepted by the public for public services. They will keep questioning cost/s & motives, etc.

Furher, in the successful examples from other countries (UK - London, for one), bus operations involving privatization are usually headed by a public bus corporation which is also an operator to some extent to enable them to have a hands-on approach on things. This is mainly owing to the nature of the operation, which has features that require very close monitoring (steps to increase bus profits mean increased threat on the streets, etc) unlike an authority that remains aloof & makes policy. Thus, it differs from other businesses in this respect & the examples of TRAI, IRDA, DGCA etc. are inappropriate.

BMTC has been in the business for decades & has been recognized as a resoanable provider internationally. It is also one of the very few profit making PT services in the world. This is what makes them my choice to move on & slowly transform themselves & become a regulator.

DULT /BMLTA as regulator for city bus transport will also not be appropriate since their jurisdiction covers all land transport issues.

 

Couple of years back, can we imagine a corporate entity bidding for a toll road or a bridge?  Can we imagin a private operator running trains? no, but things have changed. There are no corporate entities in bus operations, because there is no business opportunity exists now. There are reputed operators (in TN, Bombay etc) who got 500+ buses in their fleet. I am sure if there is an opportunity they should be able to scale up pretty easily.  If there is an opportunity, i am sure corporate entities like  KTC/ ABT/ TVS will surely jump in. 

This is incorrect - Delhi had opened up, Mangalore & Kochi has had private operators for decades.  Did they produce responsible corporate entities in these cities ? All that we have seen are rash buses & a killer blue line, so far. Whilst KTC /ABT /TVS may be good corporates for inter-city movement they might not jump in for city operations. They may have probably stayed away since city bus operations are seen generally as low class. Progress & survival in city bus operations puts operators squarely as risks for other road users, no different from world-wide experiences. Thus, city bus privatization is unique & very unlike other sectors that can quickly change - thoughtful contracts, close monitoring, clever use of incentives is the only way to get the best for users without endangering others.

About the high investment,  The operator could lease buses from the  manufacturer ( or special entities controlled by the bus manufacturer such as Tata Finance/AL Finance) and get into annual maintenance contract with the manufactuerer. That is how it works in developed countries.  This will make the bus manufacturer also an stake holder indirectly, reduce the initial investment for the operator and also provide peace of mind.

This is a good idea, but we are still struggling to make a successful beginning in any city with good operations. I think we need to study how the PPP operations are done in Indore.

SB, Yajman, Muali - I dont think there is any doubt that operating a transport bus is profitable. What is highly doubtful is whether we will ever see how to go about privatization successfully !

s_yajaman's picture

Back of the envelope

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SB,

That was just a back-of-the-envelope calculation. 

One way is to go for a mix of debt and equity of 2:1.  So about 165 crores of equity and 330 crores of long term debt.  Assuming an interest cost of Rs.35 crores each year our PBIT will come down from Rs.80 crores to Rs.45 crores.  Or an ROCE (Before Tax) of  25%.

We cannot have common bus stops - else the usual race to the bus stop will happen.  We should avoid common roads as much as possible. 

Also - prefer to have a max of 2 operators.  Very small operators and you end up in several problems - monitoring, capital adequacy, etc.  Prefer to have someone with a reputation to protect - (maybe we have Kingfisher Bus Service with glamourous drivers ;) - may actually make money!).  Someone want to talk to Mr.Mallya??

Srivathsa

Drive safe.  It is not just the car maker which can recall its product.

s_yajaman's picture

Three broad issues here (AFAICS)

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As I see it there are three broad issues to be dealt with here

a. How to regulate private players and ensuring fair competition.  How to ensure safety of the traveling and non-traveling public.   How does one ensure fair pricing.  The last issue should really be a non-issue as we are targeting non-PT people who have their cars as last resort.

b. How to attract reputed players into this segment.  Is there money to be made.  Are there hidden costs?  What are the risks - business and operational?

c. How to convince the government/BMTC to let this happen.  Are BMTC's interests sacrosanct?  Indian Airlines improved a great deal from 1993.   Can we bring in congestion pricing along with this so that both BMTC and the private operators can improve their speed of travel.

Srivathsa

Drive safe.  It is not just the car maker which can recall its product.

Ravi_D's picture

Continuing...

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@SB:

Yes, it will be difficult to carve out integral functions, a clear line will be hard to draw, but it is more of an organizational issue. Either way (outsource management functions or operations) we will have to fight inertia.

@Murali:

Agree that BMTC has ops issues, but majority seem to think they are not doing too bad there. Given that, shouldn't we be more concerned about the big picture issues that really affect PT, more at the policy and management level?

Notice I said "If above details are taken care of professionally, and BMTC is mandated to implement all the decisions...". Ofcourse, ensuring that BMTC follow mandates is not going to be easy. But neigther is any other option on the table - we are looking at a change of culture here.

@SY:

Agree with your take on lessons from Airline Industry. If you read my prev post, my thought takes these lessons out of BMTC hands. BMTC has to implement and follow everything madated. What do you think?

Ravi

murali772's picture

model - M

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What can be the argument against giving out a 3-yr licence to a single player in a given area, say Koramangala, with an option to extend his services to adjoining areas like HSR layout (just BDA complex), Indiranagar (12th main)? The only condition need be a fairly liberal upper limit on the 'per ride' charge, which in all likelihood will be fixed, leaving all the operational details to him.

Say 6 months down the line, another licencee can be commissioned in say Rajajinagar and adjoining areas, with the terms modified based on the learnings from the Koramangala operations.

In a years' time, the licensing terms can be fine-tuned, and operationalised in the rest of Bangalore, with Koramangala and Rajajinagar also coming on board at the time of renewal, if not earlier, depending on the willingness of the licencee to agree to revised terms, whatever.

These are going to be monopolies (atleast as envisaged now), which should address Naveen's greatest concern also. But, with the performance being assessed on a regular basis by the regulator, who can possibly outsource it to PRAJA, I guess we will have a fairly decent shuttle/ feeder service system going.

I'll call it model-M for reference purposes. Crtiques welcome.

Muralidhar Rao
kbsyed61's picture

Middle Ground - 'KS - Model'

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With all that is said here, my inference is we are suggesting 2 models.

One a total privatization with suggestions like BMTC leasing its stock & barrel and auctioning the zones (as Naveen pointed out).

Two allow private operators in selected areas (as Murali and SB suggests).

But we have consensus that it is time a "PT regulator" is needed. Taking a different view and considering the reality & facts on ground I think there is middle ground here which is far more practical and viable.

Reality:

  1. BMTC's active operational resources and assets - Staff, Infrastructure, Rolling Stock is far greater value that can be salvaged.
  2. Need for better service in newer and suburb areas
  3. BMTC can not grow beyond a certain point (it has reached that saturation point).
  4. Time to bring in a new PT system that plans, operates and regulates the PT system.

KS- Model:

  1. Since we all agree, for discussion assume that we have a PT system authority with a regulatory system in place.
  2. Make use of the existing assets of BMTC. What it means is allocate a demarcated area of operation that will be certainly much less than what it does now. That would allow BMTC to operate more service and at a greater frequency than today. Off-course route consolidation is the key requirement for this.
  3. Demarcated or a specfic area could be either the current B'lore CBD and areas inside the ORR or BBMP juridication areas that adjoins the ORR.
  4. Allow the private operators in areas that is out of BMTC operational area either outside of the ORR or inside the ORR.
  5. Plan needs to be in one shot and very comprehensive, but implementation should be in phased manner. The plan should be for next 30-50 years.
  6. Can the JNURM funds be used as support for debt financing for the private operators.

Some positives I see from this model is:

  1. Salvage every penny out of bMTC assets and also keep its Human Resources intact which would avoid all hues and cries from their Unions.
  2. Bring in competition and thereby expecting increased level of service.

As usual this suggested model is open for criticism.

Syed

 

Naveen's picture

Weaknesses in M-Model

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What can be the argument against giving out a 3-yr licence to a single player in a given area, say Koramangala, with an option to extend his services to adjoining areas like HSR layout (just BDA complex), Indiranagar (12th main)? The only condition need be a fairly liberal upper limit on the 'per ride' charge, which in all likelihood will be fixed, leaving all the operational details to him.

1) Operations by this player being confined to one small area, commuters will have to make a transfer when they have to get to places outside this area, which will make it inconvenient for most users. Thus, services will become fragmented with many seams, with resultant wastage of time & inconveniences for users.

2) Such moves may bring in only small-time operators who will make all efforts to generate income whilst ignoring basic conveniences in buses for commuters since they operate in a small way with limited turnaround - similar to the private bus companies in Kochi /Mangalore.

Naveen's picture

The Three Broad Issues

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a. How to regulate private players and ensuring fair competition. How to ensure safety of the traveling and non-traveling public.

I would also add user conveniences - this would mean limited no. of transfers for users + services all through the day (0600 - 2400). Minimum frequencies & schedules for peak/off-peak, etc. must be specified clearly & not left to the operator - payment must be based on multiple criteria - actual no. of trips (or kilometers driven), maintaining schedules & passengers carried. 

b. How to attract reputed players into this segment.  Is there money to be made.  Are there hidden costs?  What are the risks - business and operational?

I think that if whole zones are auctioned off, it might interest the bigger players since they will enjoy monopoly within the zone/s. If they still do not bite, the smaller players can be groomed to become better over a period.

c. How to convince the government/BMTC to let this happen.  Are BMTC's interests sacrosanct?

BMTC has been leasing out buses with staff from a long time, though only for short periods or trips at fixed (peak) times. Thus, this lease bus route should be relatively less "painful" & easy for the unions & also for BMTC since it will only be an increase in scale of such leasing.

However, the difficult part is to get them to see the wisdom in leasing out buses for various zones /sectors or routes, etc, as the case may be & convince them that commuter interests come foremost (& not employee interests).

tsubba's picture

user perspective

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i will have to read a bit more carefully at all the proposed models.

meanwhile as a first hand user for atleast the last 10 months, some non technical user psychology inputs:

mobility is incredibly important! sounds like a cliche and statement of the obvious. but i experienced what it means. mobility directly impacts your life experiences and growth. it determines, what you can and cannot do, whether you can attend that lecture or not, whether you can take those classes or not, whether you can attend that cultural event or not, whether you go hungry or not, whether you can go to the doctor or not, whether you can meet your buddy or not, whether you can go get the kirani necessary to make that delicacy you are craving or not and so on. i am fairly sagely in my desires, but even i have needs and wants. and i discovered what i can have is a direct a function of mobility.

and the distance that separates you from these need not be great at all. even 1-2 miles (1.6 - 3.2 kms) is a lot of distance especially when you translate that distance in time. things beyond that are not even accessible without motorized transport.

despite knowing all this, when travelling long distances, i used to find it annoying when buses used to stop to pick up folks who just like me needed access and i am pretty sure there were many others who felt the same when the bus stopped to pick me up.

i have become a great fan of shuttles - short user centered quasi point-to-point transit. over short distances stops dont matter. over long distances, stops matter and when you are travelling long distances, frequent stops are incredibly annoying.

point: when travelling long distances i wanted non-stop services. when travelling locally, i wanted stops on my demand and didn't mind stops requested by others. and surprisingly, i didn't mind changes. to get groceries for example, i had to change between local and long haul. and as long as the connection was made in reasonable time, i actually didnot mind getting off one bus and getting on the next. having said that, i avoided >2 changes. prolly because of my bias reading surveys in TRP etc.

bottom line as a user, i wanted to feel as if i was constantly on the move and a sense that i was moving in the direction of my destination efficiently.

 

 

s_yajaman's picture

Not sure if I want to mandate frequencies

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Naveen,

I am not sure I want to stipulate how frequently buses ought to run on a particular route.  If I say that you should run this every 10 mins, then I will also need to guarantee demand.  If he runs safe reliable services, sooner or later there will be enough demand for his services and he will increase the frequency.

What we have to mandate is no more than 20 standing passengers or whatever.

Time of operation - again leave it to him.  If he is smart he will try and run night services from cinemas, etc to keep his asset utilization up.  What we should ensure is that drivers are not overworked.

Srivathsa

Drive safe.  It is not just the car maker which can recall its product.

s_yajaman's picture

What areas should we regulate

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Before we reach the how of regulation what aspects of PT do we want to regulate?

a. Safety - of primary importance.  Will include roadworthiness of buses, driver training and licensing, how buses are driven, maintenance of buses

b. Fair competition - no playing dirty.  no damaging others' equipment, etc.  Can become very ugly if not taken care of properly.

c. Pricing - do we want to regulate or will the operator be forced to charge reasonable prices to ensure demand

d. Coverage - again should we leave this to the operator? 

Anything else?

Srivathsa

Drive safe.  It is not just the car maker which can recall its product.

abidpqa's picture

Regulate from passenger's side

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Frequency should be mandated. Without guaranteed frequency PT is meaningless. They can say there is no demand between 1 pm to 5 pm and they can run no buses. Or if the viable frequency is determined to be every half an hour, if I reach the bus stop 2 minutes after the bus leaves, I have to stand there for 30 minutes.

Public transport cannot work without subsidies, so there should be proper procedures for disbursing them without much scope for manipulation.

There should not be monopoly in any areas. Even in electricity supply technologies are being developed so that multiple players can operate in same area.  If multiple players cannot be regulated better not have privatization.

People wont shift from private vehicles to public transportation just by providing Volvo etc. People have to change the attitude, so there need not be different classes of buses.

blrpraj's picture

I think we are jumping the

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I think we are jumping the gun here. Yes, regulation needs to be there and the details need to be chalked out, but can be done later. 

 Also, the question of the bus service providers being private or public or a combination of both can be addressed later. Public or private will work equally well if executed properly. But, first and foremost the underlying infrastructure needs to be addressed; first by coming out with detailed specifications of the underlying infrastructure and then building up the infrastructure to those specifications.

I am making an attempt to document something which has been on my mind for quite some time, hopefully i will be done with it this weekend.

The PT subject needs to be addressed from the bottom up with a complete infrastructure  revamp in coordination with -> 1) the metro AND most importantly 2) proper urban planning. Once the proper infrastructure is in place any number of services - private/public/premium/economy etc. can be added as per market demand and needs. Othwerwise, just by adding regulations OR by privatizing bus operations OR just by planning a proper route map will not make a dent in how things are currently.

murali772's picture

model M1

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@ Naveen

Good to have you continuing the debate even while 'off-shore'.

I think the point raised by you at (1) has been adequately addressed by Tarle. Also, I am projecting the future commuting scenario as at here, which I believe is the most equitable in terms of connectivity. Any effort to improve the 'through connectivity', will necessarily be at the cost of others, and will not be equitable in the larger sense.

As to the point raised by you at (2), perhaps we can have an additional stipulation requiring that the operator should start with a minimum of 3 buses, and should add a minimum of another 3 buses within a maximum of 6 months. He can even hire buses, the only additional stipulation being that they should not be more than 10 years old. The Kochi/ Mangalore scenario of rash driving will not be there, since there's no direct competition.

And, like Yajamaanru has rightly pointed out, unnecessary constraints should not be imposed in the name of regulation, while safety should be the prime criterion. Any good entrepreneur should make the best of the opportunity and get to become a major player eventually.

I'll call this model-M1

Muralidhar Rao
sanjayv's picture

a small digression

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Sorry for digressing a little bit off topic - It looks like there are several schools of thought here.  Does all this finally get archived in a gyaan section as something like PT privatization options with a nice summary of the discussions and conclusions here documented.  It need not just cover one school of thought.  Multiple schools of thought can be summarized as options with pros and cons.

It would be good if something like that happens so that discussions can be built upon with additional analysis and case studies.   That will be a good knowledge building exercise and something valuable for the future.

Just a thought I am throwing out there.

Naveen's picture

PT has social obligations too

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What we have to mandate is no more than 20 standing passengers or whatever.

Time of operation - again leave it to him.  If he is smart he will try and run night services from cinemas, etc to keep his asset utilization up. What we should ensure is that drivers are not overworked.

I think good /frequent PT services during off-peak hours is also necessary though it might not be profitable + there will always be some users to whom the service will be of great value. There is thus, a social obligation to meet citizens' need too.

 

As to the point raised by you at (2), perhaps we can have an additional stipulation requiring that the operator should start with a minimum of 3 buses, and should add a minimum of another 3 buses within a maximum of 6 months. He can even hire buses, the only additional stipulation being that they should not be more than 10 years old. The Kochi/ Mangalore scenario of rash driving will not be there, since there's no direct competition.
 

Any stipulation/s that ensure progress /improvement in the quality of our private bus operators & gets them to eventually become responsible city bus corporates is what I have been suggesting. It may even be possible for a single bus owner to become socially caring, but the chances of this occurring are rare when compared to larger operators. 

 

And, like Yajamaanru has rightly pointed out, unnecessary constraints should not be imposed in the name of regulation, while safety should be the prime criterion. Any good entrepreneur should make the best of the opportunity and get to become a major player eventually.

You have missed out the social need for PT - see my comment above.

murali772's picture

model-1A

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@Naveen - Agree with you. An additional stipulation of maintaining minimum frequency during off-peak hours (general operation hours being say from 5.30 AM to 11 PM), and on Sundays and holidays, can also be incorporated. That makes it 'model-1A'.

So, are we all set to make an application to the government?
 

Muralidhar Rao
Naveen's picture

Improving Efficiency thro' leasing of buses

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Mr Murali – to summarize :

1)      It may be best to begin a process of city bus privatization by initially leasing out all types of BMTC buses to private operators based on pre-determined zones, with only one operator in each zone. This is the best possible course to begin the process since we already have a vast no. of buses, staff & maintenance /depot infrastructure, but lack an effective system that recognizes & responds well to commuter needs. Left entirely to a public entity such as BMTC, it is bound to burden & overwhelm them excessively & not provide the best in efficiency to meet commuter demands.

2)      To move towards this, it is essential to have only a single operator in each zone to prevent any sort of wrestling between operators for passengers since it will lead to unsafe roads & chaotic street conditions, as highlighted previously.

3)      In order to minimize inconveniences to commuters, zones & routes must be planned to minimize the number of transfers on commuter trips. This emphasizes the need for long routes across the city. However, overlaps with other routes (operated by different operators) must be minimal & avoided, as far as possible.

4)      All revenue generated must be returned to the regulator (ie. BMTC). To prevent revenue leakages & malpractices, effective systems must be developed including electronic ticketing, frequent ticket checking by BMTC appointed surveillance team/s & incentives offered to passengers to travel with tickets, heavy penalties for ticketless travel, etc..

5)      Operator compensation can be based on multiple criteria, such as actual trips performed (or distance covered along designated routes), punctuality in operations & number of passengers carried. All of these are necessary since it would offer incentives to operators to perform more trips, meet schedules & also carry more people. Thus, they would also police their zones & this will minimize operation of other sub-standard services within their zone/s. There may be some risks – they may operate trips with empty or near empty buses or stop in between bus stops to pick up passengers, but these can be weeded out easily after some experience with operations & making adjustments on the weightage provided to each form of incentive.

6)      Minimum operation of schedules (in peak & non-peak hours, holidays, late-night or early hours, etc.) must be clearly spelt out to make services dependable for commuters, especially non-peak hour commuters. Operators can have the liberty of operating more schedules than the minimum specified. In fact, inputs based on observations will be pushed forward by private operators for enhancement of services based on demand since their incomes would be higher.

7)      When the Metro becomes operational, some of the zones will fall within where the metro operates & such operators could also be roped in to perform feeder services.

 

tech's picture

sanjay - noted

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Just added this post to a "book" (see left hand side, top of this pae).

Since we know not many will have the time to actually prepare summarize these discussions, or merge such discussions into nice summaries (exception - blrpraj, n, tarle, etc), an easier way is to outline post that carry analytical content into books.

See if it helps. If you would like to help outline and club together analytical posts into books, let us know - will give you the needed administrative rights.

Fairly easy to do (this book outlining business) - whats neede is some harhs analytical judgement on whats geeky and worthy and whats not.

Vijay44's picture

Mangalore & Kochi has had

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Mangalore & Kochi has had private operators for decades.  Did they produce responsible corporate entities in these cities ? All that we have seen are rash buses & a killer blue line, so far. Whilst KTC /ABT /TVS may be good corporates for inter-city movement they might not jump in for city operations. They may have probably stayed away since city bus operations are seen generally as low class.

You are correct.  If  for example, the Alwaye-Fort Kochi route is auctioned to one or two private operators, i am sure there will be lot of interest from big corporates. The corporates dont want to compete with the small (1,2 bus) operators. That is exactly the reason we are talking about zones and dedicated operators (1,2 max 3) per zone. But i am not sure this is done in any part of India now, but it is a common practice in developed countries.

By the way, nothing wrong with the Transport system in Kochi, except for the rash driving of the buses.

 

idontspam's picture

@Murali

kbsyed61's picture

City is divided into clusters!

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IDS, Murali,

"..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.

The cluster system has been modelled on the lines of services in countries like Britain and France..."

I believe this is done according to a plan and according to which the city is divided into clusters. This could be the highlight of this news item.

-Syed

 

murali772's picture

time PRAJA took charge

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The corporate buses will have government drivers and conductors and also be controlled by the DTC, but the maintenance work will be done by the companies themselves, the official said.

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.

Asked about the possibility of DTC going into losses, Transport Minister Arvinder Singh Lovely said: "Why losses when the whole amount for ticketing will come to the DTC?"


Sure recipe for disaster. While, the talk of getting big players like Kingfisher, etc, into the picture is welcome, I can't see them being interested when so many things are under government control.

But, this much is becoming clear - public bus transport services are the emerging as the next big business opportunity. But, left to a 'Lovely' of even a 'Ashok', it's going to take its time, delaying the process of finding solutions to cities' burgeoning traffic problems (and myriad others resulting thereof). Time PRAJA took take charge.

A good solution as far as Bangalore is concerned, at least to begin with, I'll insist is Model-P (described here).

Muralidhar Rao


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