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City buses and Privatization - Punjab way
Written By silkboard - 31 July, 2009
Bangalore BMTC Bus Privatization Reforms Citizen Reports competition Transportation public transport
We have talked about some models for BMTC to outsource or competize some parts of its operation. (Reforms around BMLTA...). We had seen UP government try this, thought not for city buses. Now last week, I see this notice from Punjab goverment wanting to introduce privatization for city public transport. the best part is, they are doing it under JNNURM!
The notice, called expression of Interest (EOI), invites "Bus Operators" to help with:
"part financing & procurement, Operation and maintenance of city buses on specified Routes under City bus services project in Amritsar & Ludhiana under JNNURM".
You can read the full EOI press release here (TOI epaper link). It talks of
- 150 buses for Amritsar, 200 for Ludhiana
- Three categories: Low fllor, Semi-low floor, and mini-bus
- I see AC as well as non-AC mentioned for all bus types
- 15 routes in each city (total 30)
- Project being implemented under a "sustainable PPP" model.
Exact model is not clear - will they hand out each (of total 30) route to best bidder, and have one operator per route on a "performance based renewal basis", or will they have multiple operator per route?
And what could BMTC do? It has two options:
- Try to bid for this EOI, and do business in Punjab
- Learn from Punjab (and UP in recent past), and think about some outsourcing or privatization for its own operatons as well.
There is no website mentioned by Punjab government, hope papers will carry more than just tenders to help us track how their experiment goes.
COMMENTS
Learn from UP and Punjab? be careful what you want... :)
s_yajaman - 31 July, 2009 - 04:39
SB,
Be careful what you want. You might get it. :) Last time it was Hyderabad's Metro that we were supposed to learn from :)
Can you identify about 5 operational issues in BMTC that arise out of it being a govt held company and not because of anything else. There should be a fairly strong causative relationship between govt ownership and those issues.
E.g.
a. Revenue loss at ticketing. Private company means that conductor can get fired if he is caught stealing. Or that private company will mean adoption of cashless transactions at ticketing via card readers+cards. Or that private companies will pay their conductors/drivers better so that they don't need to do it.
b. Coverage ---
c. ...
Srivathsa
Naveen - 31 July, 2009 - 06:10
This concept seems to be an extension of "Licence Raj".
Rithesh - India's famous "License Raj" is commonly associated with the unneccessarily large chain of requirements involving multiple govt agencies wherby prospective applicants had to spend months, if not years & pay bribes at multiple points to be conferred licenses for operation. I dont think this will be case with the Punjab public transport initiative.
Regulation by government is very much necessary, particularly for operation of public transport since safety & lives are involved + it is a social service sector which is the reponsibility of the govt, in any case. The development process to get reliable & responsible private parties is essential for various transport & related services as also to actually operate the services, provided social goals are met in harmony & with at least the same degree of efficiency as public operators - sadly, this has not been the case in India so far, but things might change with the likes of Indore & Punjab taking some bold steps toward this.
The cities that are being covered are smaller & never had public transport before. Therefore, this initiative must be commended. I think we also need to closely watch how it progresses, as Srivathsa has cautioned.
Further, the high networth criteria, I think is acceptable as the quality of transport operators has been pathetic. This is an invitation to the bigger players to bite & take the plunge into public transportation. The chances of seeing some good evolving here might be better.
murali772 - 31 July, 2009 - 13:27
Yajamaanre' - I'll complete the list for you:
b. Coverage - they will run various kinds of services, covering every nook & cranny, unlike in the case of BMTC, where the driver/ conductor mafia decides which are 'profitable' routes.
c. Destination boards in English, apart from Kannada - Here again the politicians in-charge of BMTC have to pander to the language chauvinists, whereas the private operators have no such compulsions.
d. Route rationalisation - bringing down the current number of routes from the present 2000 odd to some manageable number, making it easy for commuters to comprehend the system at one single glance of a route map.
e. Three shift operations, even if the third shift is skeletal.
f. Yi service.
g. Courteous behaviour even towards non-Kannada speaking passengers.
saakaa???
s_yajaman - 31 July, 2009 - 14:57
b. They will cover every nook and corner. BEST covers every nook and corner inspite of being a govt run service. Is this just poor design or is it because it is a govt run orgn? You make it sound like this is a given!!!
c. Destination boards... Hope you've been reading the paper. Very soon your menu cards in restaurants will be in Kannada. What makes you so sure that a couple of burnt buses will not make any private operator put only Kannada boards. Anyway BMTC now has bilingual with LED boards.
d. Route rationalization. Right on that count.
e. Three shift operation. Possible. Not necessary.
f. YI possible. But BMTC is coming out with its own PIS.
g. Courteous behaviour. This is not the exclusive right of private operators. BMTC conductors on the VV service are pretty courteous.
Srivathsa
Rithesh - 31 July, 2009 - 03:58
There is an EOI document on IL&FS which states the following - Each of the 15 routes will be "monopoly" and "exclusive" routes and will be allocated to only one operator (no competition). The EOI document can be accessed from - http://www.iidcindia.co.in/invitationlist.aspx This concept seams to be an extension of "Licence Raj". From what i understand, currently there is no urban public transportation system, in these two cities and this is an effort to solve this problem. But instead of considering a holistic approach of auctioning transportation for the whole city to one operator (and gradually open it up for competition), they have identified 15 different routes and in the worst case there could be 15 different operators - one operating on each of the 15 routes. It would be interesting to find out, if they conducted any traffic studies to identify these routes and how they plan to achieve inter-operator co-ordination. The "High networth criteria" condition for identifying qualified bidders, is also a cause of concern, it dilutes the technical requirements criteria -
- Ticket tariff details - Rs.5 - for upto 5Km, Rs.10 for distance between 5 and 10Km, Rs.15 for beyond 10Km.
- Special purpose companies will manage the sale of the passes and advertising rights. The operators will get a share of these revenues.
"The bidders, single entity or jointly as consortium, having a Minimum Net Worth of INR 1 Crore per route as on March 31st 2009, are exempted from the Technical Criteria mentioned at (a) above."
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