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Role of Private Operators
in Improving Efficiency
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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
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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
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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.
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Investment
Cost reduction
Why do you require
private participation
Entrepreneurship
Efficiency
Outsourcing Manpower
Customer focus
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• 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
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• 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.
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• Ability to take risk
• Quick decision making
Entrepreneurship
• Close monitoring
• New ideas of revenue generation
• New innovative services
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• 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
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• 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.
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• 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
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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
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Thank you !!