Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,921.50-96.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

What ails state-run bus operators in India?

The crisis in Telangana is a reflection of the precarious position of state-run bus operators in India, which have seen their losses swell every passing year. This is particularly worrying since buses undergird India’s public transport system, and...

, ET Bureau|
Updated: Dec 01, 2019, 09.56 AM IST
0Comments
BCCL
1
Two years ago, T Sridhar Reddy relocated with his family to Hyderabad from Alair, his hometown 70 km away, so that his two daughters could go to college in the city. A 48-year-old supervisor at an explosives factory on the Hyderabad-Warangal highway in Alair, he relies on Telangana State Road Transport Corporation (TSRTC) buses to get to work every day.

But ever since TSRTC workers went on strike on October 5, he has been making the commute on his two-wheeler, a dangerous proposition on the highway. “I had shifted to Hyderabad hoping to commute to the factory daily on TSRTC buses using a monthly bus pass and never expected the strike to last such a long time,” says Reddy, who has spent an additional Rs 5,000 on his ride to work over the past month. The strike by TSRTC’s 48,000 employees ended on November 25 and the government agreed to take them back on November 28.

2

3


Reddy was one of lakhs of commuters severely inconvenienced by the protest, which called for a merger of the ailing TSRTC with the state government, a wage hike pending since 2017 and introduction of new buses, among other demands. The government, though still noncommittal on these demands, has made some concessions. As of August 2019, TSRTC, which operates around 10,500 buses, had accumulated losses of Rs 5,270 crore and loans of nearly Rs 1,800 crore.

The crisis in Telangana is a reflection of the precarious position of state-run bus operators across the country, which have seen their losses swell every passing year. This is particularly worrying since buses undergird India’s public transport system, and cash-starved state governments and municipal corporations have done little to shore up the transport corporations, which have to deal with unrest in their ranks every now and then.

4

5


During the strike, four TSRTC workers took their lives — including one who set himself ablaze — but Chief Minister K Chandrasekhar Rao refused to yield, saying the protestors would be dismissed if they did not return to work by November 5. The 52-day strike crippled bus services in the state and reportedly tripled TSRTC’s daily operational losses to Rs 6 crore. Rao on Thursday said Rs 100 crore would be released to TSRTC immediately and fares would be raised. He asked the employees not to follow the unions and that he would set up worker welfare councils. The CM is meeting the staff on Sunday and could announce more sops.

K Sandhya, wife of a TSRTC bus conductor in Hyderabad, was rushed to a hospital on November 17 after she complained of breathlessness and dizziness. The doctor told her to manage her stress. But that may not be easy since her husband has not been paid for two months. “We are finding it very difficult to manage our expenses and pay the instalments of our home loan and our son’s education loan. The bank is now threatening to declare us defaulters and auction our house,” she says.

E Ashwathama Reddy, convenor of TSRTC Joint Action Committee, which spearheaded the protest, says the Telangana government owes TSRTC subsidies worth Rs 4,000 crore. “And the government neither allowed the corporation to hike fares nor supported it with any grants to meet the rising fuel costs since most of the buses are plying in rural areas and carry passengers with subsidised bus passes.”

Telangana Chief Secretary Shailendra Kumar Joshi has said the strike was an attempt to “coerce the (TSRTC) management and diminish the image of the government to bargain in an illegal manner”. The government had hired drivers and conductors on contract to operate some of the buses.

The TSRTC strike is not the first by road transport workers this year. In January, employees’ union of the Brihanmumbai Electric Supply and Transport Undertaking (BEST) went on a nine-day strike, debilitating Mumbai. BEST’s transport division reported operational loss of Rs 265 crore in 2018-19. Earlier this month, one of the two unions of the Kerala State Road Transport Corporation called a one-day strike demanding a wage revision and payment of outstanding allowances.

There are 62 government-run state transport undertakings (STUs), and their combined losses in 2016-17, the latest year for which figures are available, were around Rs 16,400 crore, nearly a third higher than in the previous year and eight times the losses in 2006-07, according to the Central Institute of Road Transport (CIRT).

STUs carried 68.5 million people in 2016-17, three times the number transported by the Indian Railways. STUs operate inter-city and intra-city buses and also connect towns and villages. STUs owned 1.4 lakh buses and employed around 7.2 lakh people as of March 2017. State-owned buses as a share of the country’s total bus fleet were just 8% in 2015-16, down from 55% in 1980-81, according to the ministry of road transport. Only seven of the 47 STUs that reported their financials in 2015-16 made profits, including the ones in Karnataka and Odisha.

“You cannot evaluate STUs in terms of profits. They are service-oriented organisations and have contributed immensely to the development of states,” says VV Ratnaparkhi, executive director of the Association of State Road Transport Undertakings.

6

7

8

9


Raising fares is often contentious, and so many STUs have not done so for years. “It is impossible to raise revenues by increasing fares because a lot of commuters will then switch to two-wheelers, where the operating cost is as much or less,” says Sanjay Kumar Singh, professor at the Indian Institute of Management-Lucknow, who has studied STUs.

In many major cities, buses are the most used mode of public transport. For example, they account for 46% of all motorised trips in Bengaluru, 39% in Chennai and 29% in Delhi, according to 2018 World Resources Institute estimates based on government data. In Mumbai, the share of buses in motorised trips is 18%, second only to trains. In the National Sample Survey of 2014-15, buses were the most reported mode of transport, with two-thirds of respondents in both urban and rural areas saying they used buses.

Unlike metro rail services, buses are affordable to a wide cross-section of people, making it vital for commuters. “If you want to provide equitable access to buses, government will to have to subsidise operations,” says Madhav Pai, India director at the WRI Ross Centre for Sustainable Cities.

Subsidies and reimbursements from the government to STUs in 2016-17 were Rs 5,700 crore, but fare concessions to students, the differently-abled and others were nearly Rs 6,000 crore. This gap is further exacerbated by rising costs, which are not passed on to passengers.

Prasanna Patwardhan, chairman and managing director, Purple Mobility Solutions, a private bus operator in Delhi, Pune, Mumbai, Indore and Surat, says with the current fare structure and congestion in cities — which means fewer trips — it is not possible for STUs to be viable without help from the government. “Their salaries are 75% of their revenues, while they should only be 20-25%.” He says bus services within cities in Europe and the US are subsidised by the government so it is not unreasonable for entities like BEST and Bengaluru Metropolitan Transport Corporation (BMTC) to expect the same. “But buses are not a priority for the government.” He says thousands of crores are being spent on metro projects around the country, while STUs need a fraction of that.

C Shikha, managing director, BMTC, says that besides funding by the government, dedicated lanes for buses and a bus rapid transit system (BRTS) could give public transport a much-needed push. Some cities like Pune and Ahmedabad have BRTS and several other cities are implementing it. Bengaluru recently got its first — a 22 km bus priority lane. BMTC reported losses of around Rs 330 crore in 2018-19.

Anil Ramchandra Patankar, chairman, BEST Committee, says STUs’ dependence on the government should reduce and they should increase their non-fare revenues, including from advertising on buses and at bus stops and leasing out space in depots. Non-traffic receipts accounted for just 5% of STUs’ revenues of Rs 46,950 crore in 2016-17.

The other way for states to spend less on road transport is by bringing in private operators, as London, Singapore and Perth have done. “Based on global experience, operations should be given to the private sector, with regulations on routes, types of buses and fares,” says Pai. A lot of other cities are also experimenting with it, but it has still not attained critical mass.

Private-sector participation could also improve the quality of services. The poor condition of STU buses, along with overcrowding and lack of air-conditioned buses on many routes, has given risen to companies like Shuttl and CityFlo, which provide AC coaches for urban commutes. Ridesharing is also an increasingly popular way to get around in big cities. There is a concerted push towards electric vehicles in public transport, with the Union government sanctioning 465 electric buses between April 2015 and March 2019, and another 5,095 buses for intra-city operation and 400 for inter-city services since then. While this is a welcome move, the operational and financial challenges of running a large bus service persist, and state and city governments need to find a way for bus transport to be sustainable in the long run.

Also Read

Srinagar-Muzaffarabad bus operates despite LoC tension

Switch to electric or ethanol, Nitin Gadkari tells bus operators

Rameswaram bus operators offer free rides as tribute to APJ Abdul Kalam

Bihar truckers, bus operators put off April 30 strike due to earthquake

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service