Role of Private Operators

in Improving Efficiency

CityCost of operation Excl. conductor

Rs/KM

Cost of operation Excl. conductor

Rs/KM

Difference

Rs.per KM

Difference in

amount Per

Annum

Purple (200) PMPML(300) Saving due to 200

PPP buses

Pune 35.60 51.38 15.78 26,51,00000

Pune Case study for CNG,

JnNURM buses ( Gross cost )

Pune 35.60 51.38 15.78 26,51,00000

Total buses 1798 buses ( including 575 private plus 200 operations outsourced on PPP )

Reasons Purple PMPML

Buses on road 91% 62%

Staff to bus ratio 3.2 ( Excl. Conductor) 8.4 ( incl. Conductors)

PM Avg. Salary/ person 13,700 45,350

Cost of maintenance/KM Rs. 5.60 Rs. 13.90

Finance year 2013-14 Rs. In Lac

No of Income to

Investment pattern towards bus procurement:

Purple 38% | Govt. grant 62% : AICTSL : NIL

Case study Indore& Bhopal

( Net cost)

CityNo of

BusesRevenue

Income to

OperatorIncome to AICTSL / SPV

By RoyaltyPass share

20%

Advt share

40%Total

Indore 78 1901 -148 97 38 28 163

Bhopal 150 3161 -171 76 0 27 103

City No of buses Revenue Cost % Profit / loss

Delhi 5200 1200 4407 367% -3207

Mumbai 4332 1463 2140 146% - 676

Kolkata 747 60 228 370% -168

Chennai 3645 1327 1462 110% -135

Statistic of major State Transport

Undertaking operating City busesRs. In Crore

Bengaluru 6543 1907 1984 104% -77

Ahmedabad 271 34 73 213% -38

Thane 313 79 93 118% -14

Pune 1798 571 578 101% -8

Indore 125 29 Admin cost Not

known3

Bhopal 205 43 Admin cost Not

known1.5

Source :CIRT Vol 37 – six monthly 2014 fig extrapolated to annual amount.

Investment

Cost reduction

Why do you require

private participation

Entrepreneurship

Efficiency

Outsourcing Manpower

Customer focus

• With private participation additional

investments can be brought in

without following a long procedure

to get government funds.

Investment

• Private resources can be utilized by

raising equity or debt or leasing

vehicles & equipment

• Improved efficiency

• Lower manpower cost

• Lower operating cost

Cost Benefit

• Lower operating cost

• Higher ridership due to Improved reliability

and well maintained better looking buses

• Overall higher revenues with reduced cost

of operations will make system sustainable.

• Ability to take risk

• Quick decision making

Entrepreneurship

• Close monitoring

• New ideas of revenue generation

• New innovative services

• Improved utilization of assets by improving

on road bus percentage.

• Improved fuel efficiency by maintaining

buses and training manpower.

Efficiency

buses and training manpower.

• Flexibility of providing incentives for

better performers.

• Early adoption of technology

• Close monitoring of operations

• More efficient due to close

monitoring.

• Combination of fixed and

performance linked variable

Manpower

Outsourcing

performance linked variable

pay.

• Less expensive due to short

duration of service.

• To provide reliable and attractive service with better maintained neat and clean buses

• To understand requirement

Customer

Focused

• To understand requirement of travellers and accordingly make changes in service offerings

• Fast response to customer requirements & grievances

Type of contract Gross cost Net cost

Service Planning STU STU + Operator

Infrastructure provision STU STU/ Operator

Coordination with other departments STU STU / Operator

Comparison of

Public Private Partnership types

Teriff determination Govt/ STU Govt.

Revenue risk STU Operator

Cost Inflation linked risk STU / Operator Operator

Cost control risk Operator Operator

Providing quality service STU / Operator Operator

A more balance type needs to be designed to make partnership sustainable

Thank you !!