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Private sector challenge
Written By murali772 - 27 October, 2008
Bangalore Infrastructure Privatization Analysis Economy monopoly competition
“If you need to understand the difference between STUs and private operators, you need to compare the services provided by private operators in districts like Dakshina Kannada and Udupi, and those offered by STUs in fully nationalized districts like Gulbarga and Raichur", says Rajavarma Ballal, president of the state federation of private bus operators.
The government cannot go on with nationalization for long. It has to open up this space for private investment. Mr Ballal feels government-run corporations will never be able to invest as much money as needed in the sector, and run as efficiently as they do.
According to him, the government discriminates against private operators. The tax the government levies on KSRTC is different from what it extracts from us, he said. Ballal said KSRTC and other STUs pay a fraction of their earnings to the government. NWKRTC and NEKRTC have been exempted from tax till they break even. BMTC pays 3% of its earnings as tax and KSRTC pays 5%.
However, private operators are made to pay advance tax of Rs 550 per seat per quarter, irrespective of whether the bus operates and makes money or not. He said STUs suffer losses due to their inefficiency, but blame it on competition from private operators. “Worse still, the STU staff are bleeding them. They clandestinely own 75% of the 38,000 maxicabs in the state,’’ he said.
He rubbishes the argument that private operators will not ply buses to villages. “Each village with a road is covered by us in Dakshina Kannada and Udupi districts. No such private operator has ever made losses. If you offer prompt service, people are willing to pay for it,’’ he said. “If they privatize KSRTC and let us run it, we will show them 10-fold profits,” challenges Ballal. Is the state ready for such a challenge?
For the full story, click on:
http://epaper.timesofindia.com/Repository/ml.asp?Ref=VE9JQkcvMjAwOC8xMC8yNyNBcjAwNjAw&Mode=HTML&Locale=english-skin-custom
Muralidhar Rao
COMMENTS
kbsyed61 - 29 November, 2011 - 17:55
SB,
You are absolutely right about what prayer should we be making in the PIL. Certainly the PIL should be praying for equitable mobility than clamoring for privatization of just the bus service. Call for my right to a decent commuter service would be the right call. Because decent means of transportation is a means for citizens to earn a living and sustain self and the family, thereby a indirect right to LIFE which is guaranteed under the constitution.
Private Players and all other solutions would revolve around that entitlement. It is a multi-aimed shot.
Murali Sir, let us move on this suggestion - My right to equitable Mobility.
-Syed
Naveen - 29 November, 2011 - 16:13
concept having lost its relevance in today's world
As the name suggests, Public transport is not a profiteering nor a lucrative business. It is for providing subsidised transport to those that need it - like office goers, students, factory staff, etc. No private operator can invest the huge sums needed for land & infrastructure such as depots for parking buses, maintenance facilities for buses, etc, & still be able to make substantial profits if the tickets rates are to be kept affordable for these sections of society, particularly in larger cities. In smaller cities like Mangalore, most private operators use road sides for parking buses overnight & for servicing & washing them to make ends meet !
The concept has thus not lost relevance & will remain so since there will always be those that need subsidised transport, & cannot pay enough to allow the bus operator/s to make sizable profits - this is so, even today & even in the developed world.
At the same time, public monopolies are known for inefficiencies & well-known problems such as graft, which need to be tackled periodically by citizen groups such as praja.
Cities such as Seoul, Bangkok & Santiago have graduated out from the tens of thousands of private buses that were causing havoc on the streets & now have better, more disciplined govt owned /regulated services, whilst streets of cities like Manila & Mexico city continue to suffer.
City road transport, due to it's inherent nature is a resource that, if allowed for commercialization, would greatly inconvenience all other road users.
What we need to pursue must be a course along the lines of a welfare state as suggested by the news article, & not encourage more chaos on an already congested city road network. One blueline service was enough to prove this for India. We do not need to test again what has already been proven all around the world several times over.
Wonder why this is so hard to understand & accept !
silkboard - 29 November, 2011 - 17:03
I would think that the PIL that asks for "my right to equitable mobility" has better chances of gaining broader acceptance as it would be about an objective that every citizen connects with - I want to move faster. While I see that many see that the way to get to this objective may be private sector participation, a PIL targeting that subject directly would be a prescription, and not a "I need a service, I am not getting" thing.
Lets say we work on that "right to equitable mobility" PIL, your motives would certainly, and naturally come into the scope if the PIL gets acceptance.
meekly suffer inefficiencies - not for me, any way
murali772 - 4 December, 2011 - 14:50
They do not endanger pedestrians or other vehicles on the streets in any way like private buses have proven to do everywhere in the world. - - - Traffic management and policing has limits - traffic Policemen cannot be posted on every bus all the time to ensure that they do not speed to beat the competition. Other sectors are policed by the consumers for cost & service delivery. In the case of city transport, consumers actually encourage speeding since they will want to reach destinations faster - this is why it is different from other sectors & becomes unsafe. - - - in Delhi & the fact that all large cities have had terrible experiences with private city bus transport cannot be ignored.
Even today's newspapers have reported some 3 fatal accidents involving BMTC buses. While rash driving because of competition among players is reportedly the bane of private operators in Kochi, Mangalore, etc, in the case of BMTC/ KSRTC, very often it is because of racing between their own buses, just for the thrill of it (check this, for instance). And, there are ways of getting over that problem, like in the case of the Bhubhaneswar model (here), or even our own model-M1 (here). But, if one goes about with a belief that bus services are ordained by the Gods to be provided only by the government, then I guess one can go on inventing enough arguments to counter the opening up of the sector.
The comment by the Ministry of Petroleum above does not refer to competition as a possible solution - they only speak of improving efficiency.
Your own statement - "public monopolies are known for inefficiencies & well-known problems such as graft". Like Mr Swapan Dasgupta stated in a T V debate, in the 'FDI in retail' context, "we are required to suffer inefficiencies in order to support the government's idea of a welfare state"
If with only one operator per zone, it will work safely & well
That's more or less the Bhubhaneswar model, as also the London model, and even our own model-M1. So, let's atleast pursue that. Essentially, the monopoly has to go.
The fact is the city has grown too large & needs Metro
Metro is costly, and takes huge time to implement. So, why shouldn't we be talking of these different PPP models for cities like Mysore, straightaway, like SB has suggested? And, even when you have the Metro, you need 'efficient' feeder services.
If the debates suggest that there is enough support, why are there so few signatures ?
I had explained in my 2nd post itself that that was due to a mistake made by me in the formatting of the petition. I'll start a fresh petition and let's see how it goes. Whatever, even as of now, there are enough voices supporting competition.
@ abidpqa -
For example, there are not enough interstate trains because of the interference of private bus operators.
Holding bus operators alone to blame for the iadequacies and unaccountable ways of the Railways, is plain naivity.
They may be welcome if they could rationalize their behavior wherever they are present now.
Read the first para above, as also the opening post of this blog, and this blog. And then, try reasoning out things.
murali772 - 24 November, 2011 - 15:16
I was in Mangalore last week, and took the opportunity to meet Mr Ballal. Amongst other things, he stated that he was headed to Delhi the next day to prevail upon the Transport ministry at the centre not to allow amendment of a certain section of the Motor Vehicles Act, which, if allowed, would empower nationalisation of routes by state governments without reference to the centre.
After having revoked the notification issued by the S M Krishna government, allowing for stage carriage service operations in cities other than Bangalore (which paved the way for the birth of Bendre Nagara Saarige in Hubli-Dharwar), the present Karnataka government has apparently been pursuing this. The aim plainly is to hold out a constant threat to the private operators, and thereby extract money from them. Mr Ballal couldn't put it as explicitly as that for obvious reasons, and, as such, these are my conclusions from the talk.
I suggested to him that he should instead be demanding scrapping of the power to nationalise itself, with the concept having lost its relevance in today's world.
He appreciated the support, and offered to team up with PRAJA in helping liberate the bus services from the stranglehold of the government.
Very clearly, as I can see it, it's perhaps time for a PIL, along the lines detailed here.
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