Financial and other supporting measures for the sustainability of bus road transport in India - Busworld Academy
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Financial and other supporting measures for the
sustainability of bus road transport in India
›
Capt. V.V. Ratnaparkhi
Executive Director @ Association of State Road Transport Undertakings (ASRTU)
›
Capt. V.V. Ratnaparkhi,
Executive Director
Plot no-4A, PSP Block,
Association of State Road Pocket-14, Sector-8, Dwarka,
New Delhi-110077
Transport Undertakings Phone:-011-43294294,25361640
Fax:-43294242
Website -asrtu.org
Webinar on Financial and other Supporting
measures for the sustainability of Bus Road
Transport in India
Thursday, 18th June 2020 at 11.00 Hrs.
About ASRTU Association of State Road Transport Undertakings (ASRTU) is an apex coordinating body of all State Road Transport Undertakings (STUs) and the Secretary, RT&H, MoRT&H is the ex-officio President of the Association. Currently, seventy one (71) State Road Transport Undertakings are the members of ASRTU which are the back bone of mobility and provide economic transport service to sizable population of the country. Among all, about 13 STUs are operating as Companies and 7 as Municipal Undertakings.
Aims & Objectives
ASRTU serve as a forum :
→To discuss the latest developments in the field of Public Road Transport
→To identify key issues and challenges of STUs and extend all possible support
→To exchange information and learn from each other’s experiences and develop
an ambitious agenda for future.
→To liaison between various Ministries of Government of India and other
concerned departments to take up key issues concerning public transport.
→ To liaison with many overseas counterpart associations like APTA, UITP,
CODATU etc.
→ To improve the Public Transport System in the country from learning
experiences and best practices in India and abroad through its study tours.
→To provide the common procurement source for the SRTUs at most competitive
Promoting to Public Transport
rates and quality.to Public Transport
Promoting
The establishment of State Road Transport Corporations / Undertakings
The State Road Transport Corporations / Undertakings (STUs) are constituted
under the Road Transport Act, 1950 with the object of providing efficient, adequate,
economical and properly coordinated system of road transport services to the
public, trade and industry also.
While taking care of their Social responsibility by providing services to various
sections of society viz. Senior Citizens, Blind, Students, EX Serviceman etc., the
STUs are providing transport facilities in Urban, Hilly, Rural & Remote areas
ensuring last mile connectivity.
The State Transport Undertakings
:- Collectively own and operate nearly 1,50,000 buses (including hired buses)
:- Cover 148 crore passenger kilometers per day in urban, rural and hill areas
besides the inter-state operations
Promoting to Public
:- carried over Transport
6.8 crore passengers per day
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Financial and Operational Constraints
The regulated environment, in which STUs perform their operations, imposes
many qualitative as well as quantitative constraints on their operations.
Although, it is not the objective of STUs to make profit deals, but essentially to
sustain the service level without any dilution, STUs need to meet at least the
operational cost and a reasonable margin to upgrade systems at various levels
of their operations. Technological developments in the public transport have
also necessitated optimizing the operational cost as also improvise service
and comforting level to win confidence of the people at large.
The STUs are mainly combating with the issues like Autonomy in fixing of
fares, Need of Capital Contribution, High Fuel Cost, Withdrawal of charitable
status , High Taxes etc.
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Promoting to Public Transport
Present Scenario amid Outbreak of COVID-19
The operations of buses in STUs were completely suspended from 23rd
March to 1st June 2020 due to the outbreak of COVID-19. Most of the STUs
have now resumed their operations to a small extent i.e., 20-30% only from
1st June 2020.
Prior to the national lockdown, STUs were already facing various challenges
to meet out their operational costs and maintain fleet utilization. Suspension
of the operations during lockdown period has put more financial burden on
the STUs.
It is quite obvious that the STUs will be facing multiple challenges in the
coming months. On the one hand they will require to meet their operational
cost and on other hand they have to fulfil their internal and external liabilities
on wages, pending bills etc.
Promoting to Public Transport
Promoting to Public TransportASRTU has obtained and compiled the losses incurred by major STUs on various
parameters due to the outbreak of Corona Virus Pandemic. The major twenty
STUs have reported the losses (as per table given below) to the tune of Rs.6468.35
crores altogether.
Sl.No. Name of the STUs Total
(Amount in Lakhs)
1. Odisha State Road Transport Corporation 800.60
2. Maharashtra State Road Transport Corporation 84431.00
3. Telangana State Road Transport Corporation 88330.00
4. Andhra Pradesh State Road Transport Corporation 87710.00
5. Tamil Nadu State Transport Corporation (Tirunelveli) 14698.00
6. North East Karnataka State Road Transport Corpn. 22310.24
7. Karnataka State Road Transport Corporation 43145.74
8. Gujarat State Road Transport Corporation 30889.20
9. Uttrakhand Transport Corporation 6610.50
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Promoting to Public Transport10. Kerala State Road Transport Corporation 34363.00
11. Jaipur City Transport Services Ltd. 1000.80
12. Tamil Nadu State Transport Corpn. (Salem) 22937.60
13. Tamil Nadu State Transport Corpn. (Coimbatore) 32261.62
14. Metropolitan Transport Corporation (Chennai) 36714.69
15. North West Karnataka State Road Transport 20681.00
Corpn.
16. Tamil Nadu State Transport Corpn. (Kum.) 43427.25
17. Bengaluru Metropolitan Transport Corpn. 35810.18
18. Pune MahanagarParivahanMahamandal Ltd. 10360.55
19. Tamil Nadu State Transport Corpn. (Villupuram) 28194.47
20. J&K State Road Transport Corporation 2158.36
The detail from other STUs is still awaited. Total 646835.04
Promoting to Public Transport
Promoting to Public TransportThese losses are accounted on fixed cost basis only and out of this, the
biggest share of losses is on account of Salaries / Wages followed by
interest payable to banks and statutory compliance towards PF / ESI etc.
It is pertinent to note that prior to the Lock down, under normal condition of
operations, the loss per km was ranging from Rs.15 to Rs. 20/- per km
which has now gone up to Rs. 40/- per km due to restricting the number of
passengers (25-30) travelling in each bus to ensure the social distancing
amid Corona crises.
It is evident that Corona pandemic has significantly impacted the cash flow
at STUs and without adequate support and suitable measures from
Government, it is almost impossible for them to resume the normal
operations.
Promoting to Public Transport
Promoting to Public TransportThe ASRTU has already taken up the matter with MoRT&H and requested to
provide capital contribution as envisaged in the RTC Act 1950 besides
considering the following measures:
➢To release the amount of Rs.72.93 crores towards STU-wise budget estimate for
prevention and safety from Coronavirus Outbreak in the STUs as conveyed on 17th March,
2020. (Pre-lockdown)
➢To exempt the STUs for payment of toll tax at National / State Highways, for minimum six
months.
➢To take up the matter with Ministry of Petroleum for exemption of VAT and excise duty on
HSD purchases for minimum six months.
➢ To take up the matter with appropriate authorities for waiving of GST on spares and
chassis purchases.
➢To consider for waiving of Interest payable to banks and NBFCs for next six months.
Promoting to Public Transport
Promoting to Public TransportSRTU’s strategies to mitigate the losses and sustain their operations.
The STUs will also essentially have to draw an action plan both for short term and
long term to tide over the crises after the Lockdown. ASRTU also communicated a
model plan of action, focussed on the following points, for STUs.
1) Conversion and use of STUs buses for “Goods Transport”.
2) Rationalization of Routes
3) Allocation of Routes on Royalty
4) Review and restructuring of Organizational Structure
5) Adopting the financial austerity measures
6) Revenue Generation by Infrastructural development and other modes
7) Procurement of Spares through a centralized procurement system
8) Holding of the additional expenditure except for essential purposes
9) Detailed passenger demand survey to identify the actual requirement on
each route
10) Restructure the schedules
Promoting to Public Transport
Promoting to Public TransportSupport from State and Central Government
During this pandemic crisis, the respective State Government have contributed limited
funds to support the STUs for Payment of salaries to the employees and other essential
expenditure.
From the Central Government side, the Secretary, RT&H, MoRT&H and President, ASRTU
has also taken a considerate view of the situation and have suggested that, STUs may come
up with innovative IT related projects such as Intelligent Transport System, Integrated Depot
Transport Management System inclusive of EMV Compliance ETM Solutions like ORS, E-
Ticketing Application, contact less, swipes and Smart Card solutions in line with the Govt.
Program of One Nation One Card etc. and this project could be funded by the MoRT&H to
the extent of almost 50%.
To facilitate our member STUs, we have already finalized the sources for implementation of
the above solutions in STUs.
Besides this, under the dynamic leadership of our Hon’ble Minister for Road Transport &
Highways and MSME, Shri Nitin Gadkariji, the World Bank funded project involving
Transport to
Promoting forPublic
London (TFL) has been finalized for funding STUs on various innovative
Transport
schemes which would
Promoting improve
to Public the operational efficiency and leading to cost cutting.
TransportThank You
Mr. Prasanna Patwardhan
President @ Bus and Taxi Operators Confederation of India (BOCI)
›Situation of Passenger Transport due to
Covid 19.Indian Passenger Transport Scenario
• Less than 85% of Indians own vehicles and are dependent on Public
Transport.
• Passenger road transport contributes to around 6.5 % to India’s GDP
whereas Indian Railways contributes to 1.5% to India’s GDP
• Overall number of buses on road – 17 lakh
• Number of Private buses 15.5 lakh
• Direct Employment generated by BOCI members – 9.8 Million
• Dependent livelihood including their family members aprox 40 Million
• 20 thousand Plus organized Bus Operators , including cab owner cum
driver this number will go few hundred thousands.BOCI Members cater to variety of services
Various type of services offered by our members
• Intra-city or City Bus services
• Intercity Bus services
• Tourist Bus & Coach services
• School Bus services
• Employee transportation services
• Public Private Partnership
• Tourist Cab Services
• Maxi Cabs servicesIndian Passenger Transport Scenario
Mode wise share of Passenger Trips per day
Mode of Travel Number of Passenger % Share
Trips In Million / per
day
Private buses 300 74%
State Transport Undertaking 65 16%
Indian Railways 23 6%
Airlines 15 4%
Total 403 100%Issues India needs to address
• How much support & Investment is made towards Bus Passenger
transport segment including Public and Private operators which caters
to 90% of the passengers trips?
• What cascading effect it will have on other segments such as tourism,
hospitality, manufacturing & service industry, Education of children etc
if this segment collapses?
• What effect Social distancing norms will have on Public Transport? In
terms of demand & supply side and economics of the sector?
• What impact it would have on people’s access to livelihood & GDP of
the country?
• How it can have devastating impact on financial institutions?Opportunity to make Structural changes
Changes in Regulation
• Bring in Institutional reforms by forming National, State and Local level
Planning & Development Authority for Public Transport.
• Adopt 2006 Urban Transport Policy & make supportive changes in to Motor
Vehicle Act, Town Planning Act and City Development Rules
• Make Provision in the act to Provide Public Transport to citizens as
mandatory service.
• Development of Infrastructure in addition to roads
• Develop Bus & Multimodal terminals for integrated Public Transport
• Create parking lots near places of commercial and tourist interest
• Develop Rest areas on highways for busesWhat Government can do Now
Facilitation
• Euro IV vehicles registration time limit up to Sept 2020.
• Increasing validity of all documents of transport vehicles
• Give waiver to Toll for at least six months
• Create parking lots in cities & Rest areas on highways for buses
Clear long Pending Demands
• Notify One nation one Tax One Permit scheme
• Increase age of the vehicle for All India Permit buses to 12 years.
• Increase speed limit of speed governor for buses & TaxisWhat Government can do Now
Advisories to the States
• Waiver of MV TAX
• To pay PPP Operators past dues
• To give waiver on Tolls for Passenger Transport vehicles
Subjects related to IRDA
• To increase validity of insurance equal to lockdown period.
• Not to increase any premium for next one year
• To Clear pending claims without any further delay.What Government can do Now
Request to Other Ministries
• MSME benefits to transporters.
• Rescheduling of Loans & Not to charge interest in moratorium period
• Relief from Excise and CESS of diesel till Social distancing norms are
effective
• Not to levy GST on Passenger transport
• Increase in the depreciation percentage of commercial vehicles.
• In absence of taxes and duty waivers on diesel & CNG to draw a
scheme for providing viability gap funding for Passenger transportWhat Operators can do Now
• Operators needs to adopt more collaborative way of working rather
than competing within and inter mode.
• Public & Private operators should come together to provide better,
Safer and well planned Integrated service to gain confidence in the
minds of the travellers
• More digitization should happen to ensure travellers safety &
convenience and to enhance operating efficiency & reduce revenue
leakage.
• Aggregation models may work out better than unplanned,
unorganized Para transit service operations.Prasanna Patwardhan President Bus & Car Operators Confederation Of India
Mr. C.K. Goyal
Vice President Road Transport @ Delhi Integrated Multi-Modal Transit System Ltd.
›P.C: “For The First Time, Delhi Will Have ‘Double Decker Roads’ For Different Vehicles” by Samarpita Das
Supporting measures for sustainability of Bus Road
Transport in India Post Covid Lockdown
Presented by,
C K Goyal, VP ( RT) , DIMTS Ltd.
2020Challenges for Operator - Post Covid-19 Lockdown Buses under GCC Contract with Public Transport Authority (PTAs) ✓ Bank loans towards Capital cost of rolling stock-Principal and Interest ✓ Salary of driver during lockdown period ✓ Parking charges ✓ Partial maintenance charges ✓ Statutory liability towards taxes and fees ( in some states) ✓ Additional expenses over Sanitization of bus and safety measures
Challenges for Operator - Post Covid-19 Lockdown
Buses under CC Permit : Additional Challenges
✓ Restrictions on no of passengers
✓ Passenger Demand declined in PT post Covid due to working of offices
with limited staff ( Work From Home), school closure, modal shift in
initial phase.
✓ Peak will also be less served due to staggered office hours in most
placesBus Route Operation Strategy- Post Immediately Covid-19 Lockdown Bus Operation and Occupancy Management ✓ Bus Operation with 50 % occupancy to maintain social distancing ✓ Marking Active and Non Active Seats in Bus ✓ Marking Spaces for Standees ✓ Blocking Driver Cabin for less interaction
Bus Route Operation Strategy- Requirement of Support
Government Support requirement
❑ Timely payment to Operator ( applicable) under GCC Contract
❑ Moratorium on EMIs with waiver of interest during zero period
❑ Discounted Price of Diesel/ CNG.
❑ Waiver of GST on spare parts and Lubricants
❑ Extension of Fitness, Road Tax, Passenger Tax, Insurance without payment of fees and penalty
❑ Government shall explore more operation of App based services as crowd management is easy.
❑ Government may explore engagement of CC buses for government staff on fixed payment to
operatorThank You
35
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