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P R E P A R E D B Y :
A D N A N A L I
A R S H A D K H A N
A D I L K H A N
S A M A N N A A Z
Rajasthan State Road TransportCorporation
C GOPALAKRISHNANG RAGHURAM
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RSRTC : An Overview
Established on 1st of October 1964
Objective was to provide reliable, adequate, and efficient
transportation service to the public
Headquarter at Jaipur.
Primarily operates on the trunk routes
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A Senior IAS officer
Belongs to RajasthanState Cadre
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Prior Conditions
Prolonged strikes deteriorated the conditions
Continuous decline in productivity
Trust of the public had faded significantly
Urgent need of effective managerial intervention
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Measures Applied By Kaurani
Transformed the organization from three-tiered totwo-tiered
Assigned crucial powers to Depot Manager
Introduced a profit linked incentive scheme
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First 25 years
Years 1964-65 1968-69 1989-90
Fleet size 421 536 +3000
No. of Depots - 10 39
Passengerstransported(perday)
- 43175 634227
Divisions - 1 8
Buses/division - 536 393
Routes operated - 81 1676
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Contd
Gradual increase in fleet utilization, vehicleutilization, km/ litre etc.
Load factor remained more or less constant
Improvement in service figures
Profitable in initial years and incurred losses thereafter
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Change of chairman
In April 1991, Mr. Kaurani appointed as a newchairman
Also headed the organization between 1981 1984 asmanaging director
Determined to give overall boost to the corporation's
functioning productivity
Felt RSRTC having financial viability
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Strike(sep-nov 1990)
Reason for the strike:
Demanding benefits up to Rs 5 Crore
Wage structure higher than that of Government scale
Managements discontent with the amendment
Lasted for 72 days
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Strike contd...
Impact of the strike:
Load factor increased
Corporation incurred the loss of Rs 1209.7 lakh
Fleet utilization decreased from 90 to 75 percent
Strike called off on november 30th:
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PROBLEM ANALYSIS
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Three-tiered organization structure
CHAIRMAN MANAGING DIRECTOR DEPARTMENTAL CHIEF
1st tier
DIVISION CONTROLLER DEPUTY GENERAL
MANAGER2nd tier
ASSISTANT DIVISIONALMANAGERS
DEPOT MANAGERS3rd tier
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Two-tiered organization structure
CHAIRMAN MANAGING DIRECTOR DEPARTMENTAL CHIEF
1st tier
CHIEF MANAGERS
(Traffic/Accounts/Operation workshop)2nd tier
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Problem of Redeployment
Restructuring of the organization
Problem regarding the utilization of relieved manpower
Existence of vacancies enabled easy redeployment
Officers to opt for position of Chief manager or to join
Head office
Many of them opted for head office except few.
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Responsibility vs Authority
Depot managers Division managers
Report to division manager Report to chief manager
Administrative reporting Functional reporting
Vested with entire operational
responsibility
No responsibility in operations
Hardly had any disciplinary/financialpower
Vested with all disciplinary/financialpower
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Fare structure
Last fare fixed at an average of 13.65 paise/passengerkm on 3rd aug,1989
Substantial increase in input cost leading tocorporations loss
30 percent increase in fares rose the fare level to 17.6paise/passenger km
Kauranis comment on fare hike:
This fare hike was different in that it was granted withthe presumption of earning Rs 7 crore profit during1991-92. The past fare hikes generally covered onlythe cost increases and didnt lead to profits
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Age Of Fleet
Buses (%) Age of Fleet
45 > 6 years
32 > 10 years
17 > 12 years
Kauranis perception:
High Operation cost High Maintenance cost Breakdown of services Cancellation of schedules
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Comparison with other STUs
viz-a-viz GSRTC, UPSRTC, APSRTC
These STUs were better than RSRTC in terms of fleetand vehicle utilization
In terms of load factor and punctuality RSRTC ismuch better
M D Kauranis decisions:
Strengthening of depots to increase operationalefficiency
Abolition of divisions
Integration of command at depot level
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Integration of Command
Empowering depot managers
Depot managers designated as Chief manager
Transfer and removal power given to Chief manager
No involvement of Chief manager on issues relatedto deployment
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Other Related Reorganization
Workshops at Division level were abolished.
New workshops were made at depot level.
Garages and workshops were upgraded.
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Other Related Reorganization
No. of central workshops increased from 1 to 3
Major bus stations were made independent entities
Collaboration with Sulabh international for toiletcomplexes.
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Profit linked incentive scheme
Each Depot was declared as an independent profit centre
There were Monthly action plan.
The targets in action plan were considered as minimumrequirement.
The depots which earned more profits than the targetwere given 50 per cent of the excess amount earned.
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Profit linked incentive scheme
The profitability target was fixed based on three majorparameters
load factor.
earnings per kilometer (EPKM)
cost per kilometer (CPKM)
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Additions/Modifications to the Incentive Scheme
Sick Depot Rehabilitation:
Incentive for Depots Achieving Profits, but not
Targets
Incentive for Depots Achieving Targets, but not
Profits
Revision of Incentive Amount to the DepotOfficers.
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Additions/Modifications to the Incentive Scheme
Production Incentive for Central Workshop Employees
Special Cleaning Drive for Bus Stands and Buses
Incentive for Ticket Booking
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Reorganization and After
During 1991-92 and 1992-93 corporation hasshown a profit of Rs 13.6 crore and Rs 6.1 crorerespectively
Improvement in physical parameters.
daily kilometers operated fleet utilization,
vehicle utilization, and
passengers transported per day
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conclusion
Corporation was in turbulent phase and there was a needfor strong leadership.
Mr. Kaurani emerged as an effective leader for the
organization.
He proved that even loss making organizations can beturned into profit making entity without compromisingwith quality.
Mr. Kaurani get the full support from the government formaking reasonable changes.
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conclusion
He reorganized the corporation for better control.
Performance linked incentive schemes boosted the
employee motivation and sense of belongingness.
These changes resulted in organizations visibility
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conclusion
There was fair improvement in customer service.
This became an example for other state transportcorporations to follow.
Many magazines praises these phenomenal changes andrecommended for other PSUs.
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conclusion
Strong leadership can help achieve even so
called unrealistic and unachievable targets.
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