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BMTC's business-oriented outlook
Written By murali772 - 8 September, 2008
Bangalore Infrastructure BMTC Bus Privatization Analysis competition public transport
To compensate for the losses in the regular operations, BMTC is now having to look at newer and newer avenues, though in the process they may be deviating totally from their original mandate. The increased contract services for schools and IT sector companies, etc are a part of all that. In addition now are the grandiose schemes of building the so-called TTMC's, again through a totally non-transparent process, with the main object of earning revenues through lease to Big Bazaar, etc, but camouflaged as passenger amenities.
The idea of nationalizing public services like bus transport, banking, insurance, etc, by the Indira Gandhi government, was supposedly to serve the Social objectives of making them readily available to the common man. While the objectives were certainly laudable, how things shaped up eventually, only went on to re-enforce the adage that 'Socialism can only be preached, but not practised', particularly in India. The governments that followed slowly began realising the mistake that had been made, but, instead of reversing the policies in toto, they allowed the babudom to bring-in the 'license-permit raaj', which proved even more disastrous than Socialism.
With the economy on the verge of bankruptcy, the Narasimha Rao government (with Mr Manmohan Singh as the Finance Minister) was forced to take on a few bold measures. The opening up of the economy that followed started showing results immediately, and there was no going back from then on. With the Vajpayee government furthering the process, India was actually beginning to shine, as they had claimed at the time of going to the general elections. However, a few critical areas, particularly agriculture, and key infrastructural sectors power, bus transport services, etc had remained neglected, and the Vajpayee government was forced to pay the price for it all inspite of having done comparably well otherwise.
The present government, though ideologically aligned with the Vajpayee government on economic issues, has not been able to make much progress on reforms in these critical areas, because of its dependency so far on the left parties. With the situation changed now, how far they can move in the remaining nine months is to be seen.
But, the irony of it all is that most of these services are in the hands of the state governments. But, with Socialism remaining too steeped in the minds of the run-of-the-mill Indian politician, whether from Congress or BJP, nobody was prepared to stick his neck out and take the necessary step forward. It finally required a Mayawati to do it - to dismantle the monopoly of the government in providing the services, to begin with in the bus services sector (this). And, now, the Congress government in Maharashtra has taken bold to privatize water supply services in the city of Nagpur (this).
The government service providers, including our own BMTC, have been seeing the writing on the wall, and are trying to change their outlook to becoming business oriented. Now, this is where a new set of problems have cropped up. Whereas, when there is competition, business orientation results primarily out of customer orientation, in a monopoly situation, the customers generally end up getting a raw deal.
Now, even with the proposed fare increases, BMTC will hardly be breaking even on its regular services, and consequently their progressive neglect at considerable cost to the common man. Though these services can also become profitable with improved operational efficiencies, and increased ridership through route rationalization etc, as recommended by various experts, BMTC cannot be bothered with implementing any of them due to its typical public sector approach. In addition, it is in effect keeping the huge non-Kannadiga resident as well as floating population out of its purview because of its having to pander to the language chauvinists by providing only Kannada destination boards, due to political considerations.
To compensate for all these losses, BMTC is now having to look at newer and newer avenues, though in the process they may be deviating totally from their original mandate. The increased contract services for schools and IT sector companies, etc are a part of all that. In addition now are the grandiose schemes of building the so-called TTMC's, again through a totally non-transparent process, with the main object of earning revenues through lease to Big Bazaar, etc, but camouflaged as passenger amenities. All that it is typically resulting in is a bus from J P Nagar, instead of going straight to Majestic via the Minerva circle, being routed through the K H road TTMC in order to provide more custom to Big Bazar, but in the process causing delay and resultant hardship to the passenger. In the very first place, BMTC's rights over these huge chunks of valuable real estate in the heart of the city are themselves questionable. To add to that, is the matter of taking BBMP's permission for constructing them, and paying of property taxes, which have been conveniently ignored.
Before the Vayu Vajra services started, the BMTC was already operating about 50 VOLVO buses on 10 different routes. With close to Rs 1 crore investment on each bus, and proportionately costly spare parts, added to their own natural public sector operational inefficiencies, the services were incurring huge losses. Under the circumstances, the only reason they took up the Vayu Vajra services, was to thwart the entry of the private sector, which they realised if allowed to gain a foot-hold, will eventually prove their nemesis, unless they learn to compete. But, competition will mean the undermining of the many long existing vested interests, and the babudom involved is desperate to protect them. The politician, being new, has either not realised this, or has been co-opted by the babudom, as in the earlier dispensation.
The scenario is as straight-forward as that, and the challenge before the public, particularly the civil society, is to have this whole monopoly regime dismantled. After all, what government should be bothered about is providing a fair deal to the common man, and not the survival of a public sector undertaking at the cost of the common man. And, if they can compete, they can not only survive, but even flourish.
(Also Related - this poll)
Muralidhar Rao
COMMENTS
murali772 - 8 September, 2008 - 17:26
This blog was provoked by a string of postings on the subject in the Hasiru Usiru Yahoogroup, starting with the following by NJ, under the caption 'Carrying capacity of a capitalist society'.
While waiting at the bus stand, I recently experienced some of the resentment commonly voiced against the 'greater mortals' - the IT folk! Half an hour had passed without a single bus stopping by as the numbers of the waiting lot multiplied. Public buses were plenty but they were all ferrying the folks from Infosys, Wipro, etc. Should public property be used to serve private companies?
For the comfort of a miniscule percentage of Bangaloreans travelling by air, trees have been massacred, roads widened and special AC buses pressed into service. The pricing is so exorbitant that no ordinary commuter can afford it. As a result these vayu vajras and suvarnas run mostly empty or occupied to not more than five per cent capacity.
But what else can you expect in the new capitalist India? Truly, there is no value for life here, specially if you happen to be poor.
SI responded with:
I am not able to enter into the sentiments of this email. I do sympathize with the fact that there is a shortage of buses and that the frequency is poor, but if Infosys and Wipro did not provide buses, all those people would be in cars and the situation on the road would be much worse!
Also, by this logic, if I can afford to not travel by bus, I should not take them so as to leave them free for the greater public. Isn't this against wider usage of public transport?
The real answer of course is more buses, better frequency, generally improving the standard of bussing in the city so that more people are motivated to take them.
The villains in this case seem to me to be the administration more than the IT folk travelling in buses.
KRC added:
The real question is this: were these buses BMTC buses leased to companies or their own chartered buses? While employees travelling in a company bus rather than taking out their car is a good thing, it is also valid to question whether it makes sense for BMTC, which is not able to provide good frequency to its existing customers - the larger public, to lease out its precious vehicles to private parties.
If the BMTC stops providing these buses to companies, they will definitely find other bus-owners to fill the shortage. The same cannot be said of the regular commuters, who have no choice but to use whatever shoddy service the BMTC extends to them.
SS added:
Coming to the problem that BMTC buses are given to Infosys and common people are suffering because of this. Let me as "what is wrong with it?" If you dont know, every infosys employee pays close to 1500 Rs for using company bus. In a route there will be a minimum of 50 people to use the bus service. So total Rs 75000 for 20 days service being paid to BMTC. That means Infosys is paying close to 5000Rs per day per bus, for 8 hour service (morning 4 hours and evening 4 hours). If I have to draw an analogy its similar to many people taking KSRTC bus on one day lease basis for marriage or any other reasons. So its just that Infosys is taking service from BMTC and its paying more than the actual cost. So this deal is actually a profit maker for BMTC and no where its like 'BMTC is compromising on public money to serve a small group of people".
Secondly, Infosys employees are just like anybody else who need transport to go to regular work. So its like all employees do a kind of 'car pool' (rather bus pool here) and take BMTC's service. So they avoid more vehicles on the road and avoid traffic jams.
Thirdly, if not BMTC buses, infosys could have hired buses from private vendors, and in that case all the above said profit would have gone to private bodies and not to a public body like BMTC. And there is no point in arguing that BMTC should not go for profit and just it should keep serving common people. Because unless the public company is making profit, it can not serve people properly.
Now the question is, isnt it BMTCs obligation to use this profit and make sure that the common people are not suffered because of this? Just with few months profit from these deals, BMTC could easily buy new buses. Then why isnt it doing so? How many of those people standing in bus stop, waiting for the bus have raised a complaint with BMTC authorities saying 'there is no frequency of buses in this route?'
Well, Its unfortunate that we have to fight here for each of our right. But now it is unavoidable. People have to fight for the right. But the only thing to note is, our efforts should be in proper direction!
AP wrote:
In April 2005 when few of us gathered to protest against chopping of trees opposite Bishop Cottons Boys School the handful of traffic police who wanted the trees to be chopped said they are supporting widening of the trees because of the hell they experience when the school reopens. One of the Sub Inspectors said many attempts made with the school management to make use of BMTC buses for the kids, instead of parents dropping kids by cars have yielded no results. Many of us felt (and still feel) that this was a good idea. Today the school bus scheme of BMTC is a success and schools wants more buses. Before the schools used BMTC, it was some of the IT companies who used these buses to a great extent and cut down private vehicles at the same time providing a safe mode of commuting to the employees. Then, the state run HAL, BEML, et al too followed suit. Absolutely nothing wrong with this practise.
BMTCs inefficiency in covering most parts of the city is due to lack of any study in passenger traffic while running buses on certain routes. Buses are made to ply on routes that are existing for more than two decades with no flexibility to alter the routes. For e.g., if I have to reach MG Road from Basavanagudi, I have to take buses that showcase Wilson Garden. The grid wise movement which has been talked about for long should be put into use. The existing fleet, though not sufficient to meet the needs of the entire city, can still be more efficiently put to use.
As far as the opinion of Ms.N is concerned, she is right when she says the Government is spending too much to meet the needs of small percentage of the city accessing BIAL. Had the Govt planned in advance, a better and a cheaper link to BIAL would be been in place by making use of the existing rail link. This is an option which could still be considered and implemented in a few months' time.
But her frustration against a particular sector makes no sense.
tsubba - 8 September, 2008 - 15:51
thanks sir, for all bringing out all these angles. need some more time with it.
confirms my earlier suspicion that big bazaar could be a big distraction.
Will private players really make a difference?
Rithesh - 9 September, 2008 - 03:29
Murali Sir, before I start – I am strong believer in market regulated economy. But I have my reservations with what you are proposing.
My basic apprehension - when we have not been able to influence or change the behavior of a public sector utility (BMTC) on how it should operate, how can we be so confident that we can achieve this with private players. Private players are profit oriented – and that is how they should be. Considering that, if the field was open to private players, they would no doubt concentrate only on profitable routes and completely ignore the non profitable ones. You could say that we could have contracts which will ensure that they also operate in non-profitable routes. But then we know the history of enforcement of such contracts in our country. Consider the case of Delhi bus system (which to an extent is partially privatized). The private players in an effort to get more passengers driver recklessly between stops putting at risk the lives of other road users and pedestrians - just one of the drawbacks of private players.
Again when you bring in privatization we can’t expect the Tatas or the Infosyss or the Wipros of the world to come in and operate these services. It will be players like the SRS or National Travels. Looking at the way they operate currently (rash and reckless) they will turn the roads into death zones.
The best way forward would be to completely revamp the operations of BMTC. They should be forced to change their mind sets. As Mr Gaurav Gupta mentioned (in the BMLTA meeting) that they are too afraid to experiment with change – they feel that they will lose their customer base (I don’t understand to whom they will lose!!). The way I see it – Bangalore has just grown too big for the current bus model and BMTC is equally confused on how to go forward. This is where I see the role of private organizations. The planning should be outsourced to private players (or even the academia) and BMTC should be the implementer. The TTMCs with commercial space (other than parking areas/towers) is a bad idea, unless there are enough checks to ensure transparency and that money generated is actually ploughed back into the system.
Rithesh
Prajasevaka :)
murali772 - 9 September, 2008 - 05:07
Swami
Ramayana ella mugida maele', Sita, Ramanige' yaaru-ntha kaeltha iddiralla?
I suggest you read my blog http://bangalore.praja.in/blog/murali772/2007/12/12/better-bussing-green-bangalore thoroughly, particularly the policy listings.
Please also read
http://www.praja.in/bangalore/blog/murali772/2008/06/01/bus-services-a-different-approach
Delhi's Blueline, and Bangalore's National Travels types are the result of the 'license-permit raaj'. And, that's why the policy needs to be revised to facilitate the entry of image-conscious Corporates like TVS and TATAs.
Yes - private players are profit oriented, and therefore will not operate on uneconomical routes. But, in such a high demand situation, why do routes have to become uneconomical. They become that way only because of government imposing an uneconomical fare regime. If you allow the operators the freedom to charge according to their discretion, market forces will bring about the necessary checks, and in addition you you will have reliable services.
Today, if you take a flight to Mumbai from Bengaluru, the lowest charge is Rs 4,800/-. But, the lowest charge for a flight to Kozhikode, which is less than half the distance, is Rs 7,250/- (I just checked with Yatra. com). And, why not? Likewise, the bus fare from Koramangala to Majestic (through the densest areas) may become say Rs 15/-, and travel for the same distance on the ring route (assuming movement is relatively faster there) may be Rs 10/-. Again, why not? And, when more players come in, the rates may drop. Cut throat competition can be avoided by regulation, where essential. Besides, the image conscious players will go about attracting custom in more sophisticated ways.
Having worked with BMTC very closely (as the co-Chairman of their CCTF), and having managed businesses hands-on, I can tell you with a fair amount of authority that the best remedy for sloppiness is competition. Granted that's not the only remedy, but that's what produces results fastest.
Artha aaithaa?
Muralidhar Rao
KSRTC bags Apollo-CV Award for Mysore ITS- Reality check
Vasanthkumar Mysoremath - 13 February, 2013 - 06:18
http://articles.timesofindia.indiatimes.com/2013-01-08/bangalore/36215929_1_award-event-traffic-congestion-bags
"Karnataka State Road Transport Corporation (KSRTC) bagged the Apollo-CV awards as the best public fleet operator of the year 2013 for its innovative project of Intelligence Transport System (ITS) implemented at Mysore recently. KSRTC competed with 500 participants to win the award".
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