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Bengaluru Commuter Rail Service can be profitable within a year!
Written By kbsyed61 - 5 May, 2011
Bangalore CRS Bengaluru Transportation Namma Railu Profit Operational Cost Revenue Generation
Any public service entity would attract a microscopic view of its financial viability. Given the poor performance of many state run transport services and even Delhi Metro, it is not unexpected for somebody to question the financial viability of proposed Bengaluru Commuter Rail Service (CRS), aka Namma Railu.
After doing some in-depth reading of Hyderabad MMTS RTI information available on web (scribd and slideshare) and extrapolating the same to Bengaluru CRS, it can safely be said that Bengaluru CRS would be financially viable and marginally profitable within year of operations. It goes without saying the need for excellent execution of SPV and operational skills.
Based on the computed numbers, Bengaluru CRS would earn about 30 lakhs to 37 lakhs daily, depending upon avg ticket price against the daily operational cost of about Rs.26 lakhs to 29 lakhs. Isn't it a great proposition? In addition, more revenue can be earned via advertising, parking, sponsors, more ridership etc.
One may ask how could this be? Hopefully the below computations would answer that question.
Bengaluru CRS
Total # of Proposed services per day = 160
Total # of Rakes (6-Car) required to cover 6 routes = 24
Then, each rake would do = 160/24 = 6.66 services per day.
The average distance per route per each service is = 376/6 = 63 Kms ~= 65 Kms.
Therefore each rake per day would cover a distance of = 65 x 6.66 = 433 Kms.
Operational Expenses
Based on Hyderabad MMTS RTI Information, the avergae cost of fuel per KM per rake is = Rs. 44.
Based on Rs. 44 pkm rate,
Fuel Cost for one rake per day = 44 x 433 = 19052.
MMTS reports the per rake total per day operational cost excluding the Fuel cost is = Rs.88,553
Assuming this to be the same for Bengaluru CRS,
Total cost of operation per rake per day including Fuel cost = 88553 + 19052 = Rs. 1,07,607
For 24 rakes, total operational cost would be = 24 X 107607 = Rs. 25,82,568 ~= 26 Lakhs
If an additional 15% is added to the Non-Fuel operation cost = 15% x 88553 + 88553 = 13282 + 88553 = Rs. 1,01,836
Adding the fuel cost of Rs. 19052 to the above cost = 101836 + 19052 = Rs. 1,20,888.
For 24 rakes, total oeprationla cost would be = 24 X 120888 = Rs.29,01,312 ~= Rs. 29 Lakhs
Revenue Generation
In the Namma Railu call to action report, a figure of 1.5 lakh ridership is mentioned.
Per MMTS RTI reply, for 6-Car Rake, maximum capacity given is = 1972
Looking at the 1.5 Lakh ridership with 160 services, the ridership per rake come sto 50% = 937.5
At 50% ridership,
@ Rs.20/- as average ticket price, daily earnings would be = 150000 x 20 = Rs 30,00,000 = Rs. 30 Lakhs
@ Rs 25/- as the average ticket price, daily earnings would be = 150000 x 25 = Rs.37,50,000 ~= Rs. 37.5 lakhs
Revenue From other sources:
MMTS reported the daily earnings from Advertisement = Rs. 55,000
MMTS reported daily earnings from Parking = Rs.65,000
Note: Have not computed the comparable earnings for Bengaluru CRS.
Conclusion
The above computations are based on 50% occupancy and MMTS costs. This goes without saying that if the SPV for Bengaluru CRS is executed and operationalized right with good integration with other Public Transports services and last mile connectivity, higher ridership revenue can be achieved. Along with aggressive marketing approach non-ridership revenue can be exploited.
The word 'Profit' here doesn't mean to be exorbitantly high which could put a burden on ridership cost. Here profit is meant to be very modest that would take care of any additional expenditure like higher fuel cost, service improvements and technological improvements. Basically service to be financially independent.
On top of it the immense socio-economic benefits CRS would bring in would be a WIN-WIn situation for governments, public and the city.
http://praja.in/en/projects/3110/announcement/socio-econmic-benefits-bangalore-commuter-rail-service
COMMENTS
idontspam - 6 May, 2011 - 09:36
The imp thing which you have taken taken into consideration is ticket price.
Because of the tkt prices in MMTS it is actually undergoing a loss & is being used as a stick to beat up the concept altogether. Discounts on tickes should be given in the form of special pass to the EWS folks. People like me who can afford R25 should be allowed to pay for it. Also distances in the proposed Bangalore commuter rail suburbs are more than double the maximum distance in MMTS. Do go thru the call to action report in the project thread.
srinidhi - 5 May, 2011 - 23:52
Yes Syed..the ticket costs will make CRS a very goo option for all..as we know trains are way cheaper then bussess too!
Was looking at the current scenario itself..as I understand CRS type train lines currently active in blr are:
1. YPR- CHikkaballapur - almost not used at all
2. YPR - Hosur(Salem Passngr included) - moderately used
3. SBC - Bangarpet(marikuppam?) - popular
4. SBC - Nelamangala - Will be introduced this month
I was wondering if 'Bus Day' style promotion is necessary for these commuter rails too..not many people know that such option exisit currently..that the train winding through their locality stopping at some derelict station eventually travels to their work place..
ticket cost is the usp...this along with 'fast' 'safe', 'no traffic' kinda definitions shd drive CRS I guess
Good Calculation but ticket price is a bit expensive!!
aniketh1987 - 6 May, 2011 - 08:19
Hi Syed You really did your homework very well and u seem to be good at Maths ;)
The imp thing which you have taken taken into consideration is ticket price.
Just refer below the prices of MMTS in hyderabad:
Distance(km) Rate(INR) 0-10 2 10-15 2 15-20 3 20-25 4 25-30 5 30-35 7 35-40 9
This is what i feel the ticket price should be as it plays a vital role.
Secondly There should be enough stations in Sub-urbs to make it Effective.As MMTS(Hyd) has approximately 40 Stations in Sub-urbs at important junctions.This will also attract a large no of commuters.
Thirdly all the Sub-urb Stations should be connected using double rail lines. As i am from hyderabad and have been in Bangalore for the past 10 months ,i really dont know whether the Sub-urbs have double rail lines.As this also plays vital role in maintaining the frequency of Trains.
Aniketh
naveen_blr - 6 May, 2011 - 07:56
i guess giving 1 rail a day wont help,
12255 Yesvantpur Puducherr... GR YPR* 23:15 HSRA 00:26 1h 11m F 3A 67 km n/a 17m late 16527 Yesvantpur Kannur Ex... Exp YPR* 20:00 HSRA 21:23 1h 23m S M T W T F S II SL 3A 2A 67 km 7m late 7m late 56242 Yesvantpur Salem pas... Pass YPR* 16:05 HSRA 17:31 1h 26m S M T W T F S Unreserved 128 km on time 27m late 06593 Yeshvantapur Hosur P... Spl YPR* 15:35 HSRA* 17:05 1h 30m S M T W T F S Unreserved 128 km n/a on time 06591 Yesvantapur Hosur pa... Spl YPR* 06:20 HSRA* 07:55 1h 35m S M T W T F S Unreserved 128 km n/a n/aThese are all the trains to Hosur from YPR ,none of them are convenient. How do you expect to be profitable?
We need 1 train every 30 mins or hour for anyone to switch from bus to train or even call it a commuter rail.
idontspam - 6 May, 2011 - 01:14
Good calculations Syed. 30 lakhs operating expense on the rolling stock can be recovered by ticket costs. Other capex on stations & tracks can be met by commercializing the stations & allowing ads on trains etc. At full occupancy this system will pay for itself many times over.
Sri, I guess we can try to take up a bus day type proposition to the DRM. We have the list of currently running 28 up-down services in the report. Also a couple of up-down trips got added in the new Nelamangala segment.
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