HOT TOPICS

SPOTLIGHT AGENCIES

BMTC and Rs 750 crores

116

Written By silkboard - 7 August, 2008

Bangalore BMTC Citizen Reports competition public transport

BMTC has postponed its Rs 750 crore IPO for the time being due to volatile market conditions. But its never too late to look at their plans. BMTC had submitted a Rs 3000 crore plan tothe center under JNNURM to "modernize and expand its network to meet the public transport demands of a growing city.". The plan is (source: Livemint) "to raise money from the public to add luxury buses on newer routes".

Going by the year old LiveMint article, BMTC certainly has a good image:

  • only profitable public transport company in india
  • earned a profit of Rs224 crore on an income of Rs887.59 crore for the year to March 2007
  • employs around 6 people for each bus, as against 10 people per bus at the loss making BrihanMumbai Electric Supply and Transport Undertaking (BEST).

Now, as per another news sources (Hindu), here is how BMTC plans to use this money:

The capital raised from the IPO is to be used for fleet acquisition, including buying 1,000 Volvo buses, 500 other buses (for “Suvarna Karnataka Service” that will have no standing passengers), bus shelters, and other expansion plans of the corporation

Now, for me as an investor, I need two critical pieces of information before rating this IPO.

  1. What is BMTC's track record in modernization efforts? To be more specific, how are their Volvo services faring (overheard - not good)? How are their Suvarna services doing (overheard - okay)? How much investment do these bus shelters need, and do they have the required jurisdiction to design bus shelters (we know via some recent news sources - BBMP is building bus shelters for BMTC, and they are running late).
  2. Using public money is a good idea - adds the pressure of performance to BMTC. But I wonder if the present tightly monopolized setup guarantees that the public money will be put to the best use. Perhaps the monopoly is required to ensure the success of this IPO - we will have to use BMTC for lack of choice. But if public transport sector in Bangalore is opened for competetion later on, will that be akin to cheating those will buy into the BMTC IPO today?

I wish BMTC all the success, so don't get me wrong. But success of BMTC as a public entity, and with the shield of monopoly, is first in making sure it can carry 50% of city's commuters on its buses. Whether it makes money or loses some, that comes next (sorry to say this, but a public body exists for service first, profit later). And thus, its financial restructuring requires a closer scrutiny from us - the people. I was not sure if that is happening today, and thats why this post.

cheers,

Pranav.

COMMENTS

departments not necessary

tsubba - 8 August, 2008 - 09:24

actual departments with specific labels are not necessary. what is necessary is the attitude to think through the problems. to respond to a problem with a response that is not ad hoc. i said academicians because they tend to be systematic. and tend to build on knowledge. in any case, for the types of problems BMTC has generic departments suffice. some statisticians, some communication-walas(signals not jhola), some algorithm-kaararu, some HMI-types and so on... all these in abundant supply in bangalore.

how about basics?

tsubba - 7 August, 2008 - 14:03

the bread and butter of this type of company is routing and planning. how about hiring knowledgeable heads who can make educated decisions? they need not hire full time, they can seed some professors/students the tata institute and iim, rvce and isi etc. to brainstorming bmtc operations during summer, when the colleges are in recess. i am pretty sure there are enough problems that can fund atleast a few master's thesis at these colleges. how about investing in systems that will help gather the various parts of bmtc are performing. automated counters, automated time logs, analysis software, linear solvers. how about the most basic of them all. a truely useful website? no jingchak and chamku stuff with flashing images and zooming text. simple. solid. info rich. useful website.

Transportation Engg?

rkay - 7 August, 2008 - 19:21

Where does one find "knowledgeable heads" on Transportation Engineering?  I have not come across any Engineering college offering that as a major.  I presume most people with any academical interest in Transportation would be glorified Civil engineers at  best.  In US schools, it is very common to see graduate level programs in Transportation.  Are there equivalent ones anywhere - IISc for instance?  What practical projects have they undertaken?

Dear RKay As far as I know,

Sudhirgota - 7 August, 2008 - 23:05

Dear RKay

As far as I know, many universities offer such courses. Your reference to “Transportation Engineer” as of “Glorified Civil Engineer” indicates such myth about what exactly constitutes Transportation Engineering. Transportation engineering in itself is a big stream with various subcomponents. In India, in majority of good universities it is offered as a Post Graduate course. Many universities concentrate on various sub aspects of it. If you go to the UVCE you would know that they are very good in pavement engineering. If you go IIT-Bombay they are good in planning and in Operations and management. If you go to IIT Delhi they are good in sustainable transportation (because of its Proffs). IIT-Roorkee is very good in Air and Noise Modelling, IIT Karagpur has one of the best courses in pavement engineering in the world..Universities like CEPT are designing one of the best BRTS in Asia. You should meet some of the good proff’s in India and abroad to know more about the Indian expertise in such matters. Please mail me so that we can discuss further (sudhirgotaatgmail.com). I am working as a transport specialist in one of the best NGO’s in Asia. After spending five years completing my post graduation in the field I still feel that there is so much to learn... such is the depth of the subject…

 

 

BMS College

s.yajaman - 8 August, 2008 - 08:40

rkay,

BMS College of Engineering used to offer Bachelor in Transportation Engineering and I am one of those who passed out. Unfortunately due to university grants, aids and other issues they do not offer this course anymore but have started a Masters in Traffic Engineering.

Regards,

Suhruta

PRAJA.IN COMMENT GUIDELINES

Posting Guidelines apply for comments as well. No foul language, hate mongering or personal attacks. If criticizing third person or an authority, you must be fact based, as constructive as possible, and use gentle words. Avoid going off-topic no matter how nice your comment is. Moderators reserve the right to either edit or simply delete comments that don't meet these guidelines. If you are nice enough to realize you violated the guidelines, please save Moderators some time by editing and fixing yourself. Thanks!