PRESENTATION ON

MANAGING VOLATILE COST STRUCTURE

THROUGH ADAPTIVE BUSINESS MODEL

BMTC INITIATIVES

By

Anjum Parwez, IAS

Managing Director

BMTC , Bangalore23rd August 2013

• On 1.10.1957, it was Merged in to Mysore Government Road Transport Department.

• Became an operating Division of Mysore State Road Transport Corporation on 1st August 1961, as BTS.

• Formed as an independent Transport Corporation on 15th

August 1997

• It was first public transport company in the princely state of Mysore, established on 31st

Jan 1940 as Bangalore Transport Company.

Daily Service KM

Total Growth: 46%Annual Growth Rate: 7.97%

Bus FleetTotal Growth: 86%

Annual Growth Rate: 8.05%

Since 2004 –

Overall Increase: 64.7%

Annual Rate of Growth: 6.4%

132941309313040136571383214356

15615

1775919019

20565

25542

27644

30996

3295332297

34278

12000

16000

20000

24000

28000

32000

36000

'97-98

'98-99

'99-00

'00-01

'01-02

'02-03

'03-04

'04-05

'05-06

'06-07

'07-08

'08-09

'09-10

'10-11

'11-12

'12-13

Staff Strength

� Own 6587 Buses

� Operate 6441 Bus Schedules

� Perform 13.50 Lakh Service Kms.

� Make 83327 Bus Trips

� Earn Rs 5.00 Crore

� Carry 49 Lakh Passengers

� Bus Depots 39

� Bus Stations 50

� Manpower 35090

� Bus Staff Ratio 5.2

As on August 2013

Expenditure Component for the year 2012-13

Growth of Cost Component (In Crore)

Cost of Capital

Date Price Date Price

25-05-2011 45.36 01-04-2013 52.99

01-07-2011 45.36 17-04-2013 53.07

04-01-2012 44.88 11-05-2013 54.18

25-07-2012 44.12 01-06-2013 54.80

14-09-2012 50.25 01-07-2013 54.77

01-01-2013 50.36 01-08-2013 55.46

21-01-2013 52.06 01-09-2013 56.07

16-02-2013 52.62 01-10-2013 57.06

23-03-2013 53.17 01-11-2013 57.67

Increase in Diesel Prices (In Rs.)

• In a span of two years diesel prices has increased by 30.70%

• It is increasing almost every month

Period Staff Cost

Jan-Mar 2011 123.85

Apr-June 2011 124.48

Jul-Sept 2011 131.28

Oct-Dec 2011 148.99

Jan-Mar 2012 146.64

Apr-June 2012 149.17

Jul-Sept 2012 164.73

Oct-Dec 2012 193.28

Jan-Mar 2013 198.03

Apr-June 2013 200.39

Jul-Sept 2013 206.85

Increase in Staff Cost (In Crore)

• In a span of two years staff cost has increased by 59.10%

-74.43

-36.44-12.02

14.67

94.81

172.07

261.13

460.12

560.02587.55

625.21

675.56 663.04

515.09

-200

-100

0

100

200

300

400

500

600

700

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

Accumulated Loss / ProfitRs. Crore

2000-011999-00 2001-02

• Increase in the Price of Diesel

– F(DPA) = (F-D)+(RPD/BPD) x D) Where,

– F(DPA) is the revised fare in terms of Paise per passenger km.

– D is the earlier diesel cost per passenger km.

– RPD is the revised price of Diesel.

– BPD is the earlier basic price of the Diesel.

• Increase of Dearness Allowances rate

– FR = F+(CPKM(L)/CPKM)x P x F/100 Where,

– F is the current fare per passenger km.

– FR is Revised Fare Paise per passenger km.

– CPKM is Total cost per km.

– CPKM(L) is staff cost per km.

– P is the % increase in the staff cost due to D A increase over the previous staff

cost.

Passenger Fare Revision Policy

Date Fare Revision (Percentage)Cumulative Increase

(Percentage)

26.06.2010 8.65 8.65

26.06.2011 7 16.25

01.10.2012 10.1 27.99

16.06.2013 14 45.9

Year EPKMIncrease

(Percentage)Cumulative Increase

(Percentage)

2010-11 26.44 - -

2011-12 29.77 12.59 12.592012-13 32.68 9.77 23.592013-14 36.22 10.83 36.97

Fare Revision

Earning Per Km (EPKM) Growth

Travel Expenditure for the journey from KBS to Kadugodi for Various Modes of Transport

Sl.NoMode of

TransportType

Distance in KMs

AmountWear

& TearTotal

AmountAmount per KM

Amt per person per KM

1 BMTC BUSVolvo 28.1 90 90 3.20 3.20

Ordinary 28.1 22 22 0.78 0.78

2Personal

Vehicle (Two Wheeler)

Bike 28.1 50 15 65 2.31 1.16

Scooter 28.1 63 15 78 2.78 1.39

3 Personal CarPetrol Car 28.1 160 30 190 6.76 1.69

Diesel Car 28.1 115 30 145 5.16 1.29

4 Private TaxiSmall 28.1 600 600 21.35 7.12

Sedan 28.1 900 900 32.03 10.7

Note: 1. Diesel Rate @ Rs.57.08 KMPL for Diesel Car: 15 KMPL for Scooter: 35

2. Petrol Rate @ Rs.79.35 KMPL for Petrol Car: 15 KMPL for Bike: 45

Wear & Tear Cost Estimation: Private Taxi Charges are ascertained from Private Taxi Operators

1. For Two Wheeler : Re.0.50 per km

2. For Four Wheeler : Re.1.00 per km

There is limitation on increasing the

Passenger Tariff

Other Sources of Revenue Generation

Efficiency Improvement

Cost Cutting

Popularizing Public Transport

Operational Optimization

Traffic and Transit Management Centers (TTMCs)

• BMTC is the first urban transport organization in the country to get JnNURM funding for a national pilot project for an innovative idea called TTMC.

• Construction of 10 Traffic and Transit Management centers was taken and all have been commissioned.

TTMCs were taken up to;

•To Provide an integrated transportation facility with adequate facilities and amenities to cater to the requirements of all user groups.

•Smooth flow of all types of traffic to and from the terminal such that there is no congestion/disturbance caused to traffic along the main road.

•Minimum /no conflict between various traffic types-Passengers, buses and private vehicles and to achieve minimum passenger and vehicle processing time.

•To encourage use of public transport and provide fi rst-mile connectivity through provision of park and ride facilities.

Facilities at TTMCs• Bus terminal

• Bus bays

• Platforms

• Seating & lighting

• Public conveniences

• Information systems

• Safety and security

• Bus maintenance depot• Maintenance bays,

• Washing platform

• Bus parking

• Services and Utilities

• Fuel filling station

• Amenities for crew

• Passenger amenities• Bangalore One centers

• Other citizen amenity centers

• ATMs

• Daily needs shopping

• Park and Ride facilitiesBefore After

• Expenditure on these 10 TTMC is Rs. 425 Crore.

• Total built up area - 32.0 lakhs Sqft.

• Out of which 6.2 lakhs sft. is for Bus Terminus and Depot.

• 18.3 lakhs sft. for Passenger Amenities and office space.

• 7.5 lakhs sft. is for parking facility.

• 3715 four wheeler and 2800 two wheeler parking.

• Expected income from these 10 projects is Rs. 33 Crore per

year.

• IRR for these TTMCs varies from 12% to 26%.

• BMTC has identified 35 more Traffic & Transit Management

Centers (TTMCs) in and around Bangalore city. These will

be developed through PPP.

Chartered/Dedicated Premium Pass Service

• BMTC is providing buses on chartered services on kilometre

basis to companies/factories, schools and colleges.

• To minimize loss of revenue due to clandestine operation by

private operators, Dedicated premium passes services was

introduced for the Industrial / Company workers during the

year 1998 with TWO buses.

• At present 572 trips are operated with 285 buses to Schools &

Colleges and 1106 trips are operated with 504 buses to

companies/factories.

• 308 number of buses operated to companies on Dedicated

pass basis.

• Realizing average revenue of Rs.8.97Cr per month.

Year

Annual Revenue (Crore)

Chartered ServiceDedicated Pass

ServiceTotal

2005 14.528 13.042 27.57

2006 19.521 14.338 33.859

2007 26.738 12.325 39.063

2008 39.119 08.884 48.003

2009 38.483 07.878 46.361

2010 39.453 8.022 47.475

2011 42.337 14.891 57.228

2012 46.086 32.351 78.437

2013 (Est.) 58.510 39.478 97.988

2013 (up to Oct ) 34.131 23.029 57.16

Revenue from Chartered/Dedicated Premium Pass

Service

Growth of Revenue from Chartered/Dedicated Premium Pass Service

City(STUs) Population No. of buses Buses/Million (Millions) in STUs Population (1-3-2001)* (Dec-10)

Bangalore(BMTC) 5.69 6119 1075

Chennai(MTC) 6.42 3421 533

Delhi(DTC) 12.79 5899 461

Mumbai(BEST) 16.37 4698 287

*source: www.citypopulation.de and CIRT, Pune

(Target 1000 buses per one million population in cities)

• Compared to other Metros, the ratio of buses to population is

much higher in Bangalore.

• Do we need these many buses.

• Is bus network of BMTC is efficient.

Hosur Road Corridor Improvement Plan

Moving from the existing

‘Destination Services’ model

to an

‘Integrated Services’ model

(Direction Oriented model)

Existing Destination Services Model

� Bus services in Bangalore are based on the ‘Direct Services’

model.

� Each locality is directly connected to destinations in the city

centre with a dedicated route.

� Such system leads to inefficiency.

� As city expands and number of destinations increases, the

number of routes increases exponentially.

� It results in a large degree of route redundancy.

� Long wait times on specific routes.

� High number of routes increases system complexity for users.

� Inability to match demand precisely to supply.

Route Rationalisation

Old

Airport

Road

Sarjapur

Road

Hosur

RoadBanerghatta

Road

Kanakpura

Road

Old

Madras

Road

Mysore

Road

Magadi

Road

Tumkur

Road

Bellary Road

Tannery Road

Hennur Road

Pilot ProjectHosur Road Corridor

Existing Services:

From City Centre to

Electronics City and

Beyond

63 Routes

262 Buses

KR

Market

KBSBrigade Road

Trunk Services

Electronics

City

Attibele

Silk

Boa

rd

SBS

6 Proposed Trunk Routes.

It will serve the same travel patterns as 15

Routes in the Existing Service.

Feeder Services

Feeder Network

Improving Simplicity of Routes

Existing Proposed

Trunk Service

Direct Service

TOTAL

Big Trunk 6

Big Connect 3

Feeder Services 21

30

15

48

63

52.4% reduction in number of routes while maintaining same service coverage

Fleet Requirement

Existing proposed

Trunk Service

Direct Service

TOTAL

Big Trunk 187

Big Connect 35

Feeder Services 40

262

167

95

262

Existing Proposed

TRUNK

FEEDER

TOTAL

0

120

120

3

36

39

67.5% reduction in wait time for feeder service

Wait Time (In Minutes)

Trunk Buses

Feeder Buses

Midi BusesSame height and Width as normal Bus

120-130 HP Engine

28-36 Seater

9.5 Meter Length

Procurement Based on Life Cycle Cost

• At present the procurement of buses and other major items are

done through the process based on e-Tendering where the

successful bidder is decided based on the lowest quoted rate.

• It is quite possible that a particular brand of bus has costed less

initially but in the long run it consumes more diesel and other

consumables like Engine oil, Gear Box oil, Fuel Filter, resulting in

higher overall cost in the life cycle.

• This situation is practically happening in the present system.

• To avoid this kind of situation and from the point of view of

having low cost in terms of life cycle, tender based on life cycle

costing has been started in BMTC for two items namely bus

chasis and tyres.

Procurement Based on Life Cycle Cost for Buses

The Tenderers have to furnish complete data regarding,

•Changing period in Kms for:

• Engine Oil.

• Gear Box Oil.

• Rear Axle Oil.

• Coolant.

• Power steering.

• Fuel filter cum water separator.

• Fuel strainer.

•Projected life of the O.E. engine in Kms.

•Projected life of the O.E. Gear Box in Kms.

•Projected mileage of HSD in KMPL.

Procurement Based on Life Cycle Cost for Buses Contd…..

Life Cycle cost is based on consumption of Major Lubricants, Fuel

line aggregates, O.E. Engine life & mileage of HSD (KMPL) for a

running of 7.5 Lakhs Kms.

Subsequent deductions will be made towards shortfall in

guaranteed performance.

Considering the data submitted by the Tenderers, cost on Major

Lubricants, Fuel Line Aggregates, OE Engine and performance of

HSD KMPL of the respective type of Chassis of the Tenderer will be

evaluated.

The total cost arrived for all the items indicated for life span will be

added to the quoted rate by the bidder. The resulted cost will be

the basis for deciding the L-1.

Tyre BrandAverage New

Life

Retreading

Factor

Life after

RetreadingTotal Life

Brand 1 44142 3.71 22267 123262

Brand 2 35582 3.5 19159 101057

Brand 3 44929 4.01 23427 136266

Brand 4 85427 2.14 33401 148323

Brand 5 39323 4.67 22786 144623

Brand 6 106358 1.97 55195 192244

Brand 7 57500 4 23143 150072

Procurement Based on Life Cycle Cost for Tyre

• Life Cycle cost is based on life of new tyre, life of tyre after

retreading and number of times retreading is possible

(Retreading Factor).

• These figures are calculated based on the historical

performance of different brand tyres in KSRTC and BMTC

together.

A = TOTAL COST = NEW TYRE COST + (RETREAD COST x NO. OF RETREADS).

B = TOTAL MILEAGE = INTIAL TREAD MILEAGE + (RETREAD MILEAGE OF No. of processes).

Cost per Km running = (A)/(B)

• L1 is decided based on least cost per Km running.

Procurement Based on Life Cycle Cost for Tyre Contd…..

BMTC New website “mybmtc.com”

Commuter Friendly Initiative

Mobile version

Geo-coded Bus stops

47Non- Sheltered bus stopSheltered bus stop

Trip Planner

Route Map : Printable

Route Timings : Printable

List of Bus stops : Printable

Branding of Services

• BIG-10 Services: Introduced BIG10 services, which are operated on all

the 12 major traffic corridors of the city that connect it with the

surrounding sub-urban areas.

• BIG-Circle Services: Bus services on the ring road.

• K Series Services: For long distance travel from one corner of city to

another corner.

• Atal Sarige: Specially designed bus provided to cater to the needs of

Economically backward commuters of Bangalore city at 50%

concessional rates of ordinary buses.

• Vayu Vajra Services: A/C Buses for airport from different part of city.

• Vajra Services: A/C Buses for different part of the city.

High End Buses

• Adaptive maintenance

• Modification in the buses to cope with changes in requirement.

• Corrective maintenance• Daily Maintenance.• Alternate day maintenance.

• Preventative maintenance• 10 day maintenance. • Docking maintenance.

• Docking-01 After covering 20000 kms.

• Docking-02 After covering 40000 kms.

• Docking-03 After covering 60000 kms.

• Docking-04 After covering 80000 kms.

• Perfective maintenance

• Annual Fitness Maintenance.

Maintenance Practices

• Reducing the variation in the availability of vehicle is extremely

important.

• It needs rigorous regime of vehicle maintenance.

• Earlier the vehicles were send for fitness certificate at workshop

by Depot as per its convenience resulting in huge fluctuation in

number of vehicles coming for fitness certificate to the

workshop.

• Now an annual calendar has been finalised keeping in view the

streamlining the process for all the depots. A very

comprehensive annual plan.

• All depots have to follow this calendar.

Streamlining the Process of Fitness Certificate

Streamlining the Process of Fitness Certificate

On-going Initiatives

ITS : Intelligent Transport System

Vehicle Tracking System & 2 Way

Communication

• Operations Monitoring

• Incident Management

• Real Time ETA/D

Electronic Ticketing Machines • Revenue Monitoring & Management

• Ticket and Smart Card

Passenger

Information System

• Revenue Monitoring & Management

• Applications

6500

10000

35

Data & Command Control Centre

• Monitoring & Reporting

• Communication

• Call Centre

1

Depot Management System

• Crew Management

• Vehicle Management

• Scheduling

1

Takes Care the Concerns of :

•Commuter.• Which bus should I take to reach my destination?

• What is the bus route between my origin & destination?

• When should I reach the bus stop to take my bus?

•Management.• Revenue earned, Targets Met & Exceptions Reported.

• Duty/Depot management, Scheduling, Fleet Usage, Crew Appraisal.

•Operations Manager.• Is any of the bus over-speeding?

• Has there been any accident?

• Are there any breakdowns/ Idling/ Bunching?

•Crew• Control Centre Support for incident management.

• Easy reconciliation and end of duty process.

Vehicle Tracking System

• Location, Time & Speed Monitoring.

• Based on above Driver Appraisal Card.

• Incident management through two way

communication system.

• Tracking on GIS maps @ 1:2500 scale.

• Various graphical, tabular and spatial

reports on important parameters.

• Alerts on exceptions (reporting) – missing

targets.

Smart Card Fare Collection System

Mobile Application

Mobile Application for iOS, Android and Windows 8

Find Nearby Bus Stops

• The user can use the app to

find nearby bus stops using

integrated Google Maps with

Geo-location of the user.

• The bus stops will be marked

with icons as as a overlay on

the map.

• User can also search for nearby

bus stops by keying in the area

or the address.

� Installation of Passenger information

KIOSK at ten Major Bus stations.

� The web based information is

displayed in these KIOSK.

� More useful for new passengers who

want to use public transport and old

passengers as well.

CCTV with live monitoring at all major bus stations

In Bus Camera with Recording

Free Wi-Fi in A/C Buses

Leave Management System.

Training Information System.

Human Resource Management.

MIS

Estate & Land Information System ( EIS )

Inventory Management System

File Management System ( FMS )

Other Applications

Challenges and Way

Forward

Distance Travelled by BMTC Buses in an hour

Fuel Efficiency

Type of Bus Average Cost (in Lakhs)

Difference of Cost

with BS-IV (In

Lakhs)

BS-II 22.75 6

BS-III 24.25 4.5

BS-IV 28.75

Bus Cost

• These technological changes has happened mainly because of stringent

emission norms, substantially adding to the cost of operation.

• However STUs have not received any support from Government to

compensate these additional costs due to environmental norms.

• STUs are not even allowed to take this component in the tariff fixation. It is

resulting in reducing the margin of operation drastically for BMTC.

Sl. No ServiceNo of Schs

No of schedules

EPKM less than Rs 25.00

% of schs

No of schedules

EPKM less than

Rs.30

% of schedules

1 General Shift 1695 115 6.78 593 34.98

2 Night Out 2884 330 11.44 1564 54.23

3Double Day

Shift1349 41 3.03 388 28.76

4 Night Shift 51 13 25.49 40 78.43

TOTAL 5979 499 2585

Low Earning Schedules

Area of Higher Focus

� Complete shifting to direction oriented service.

� Integration with Metro.

� Enhancing women safety.

� Introducing Semi Low Floor buses in Non/AC sector.

� Workshop automation.

� Moving towards mixed fleet.

� Robust passenger information system.

� Modernisation of call centre.

� Route rationalisation.

� Introduction of vehicles based on alternate fuel.

� Further unlocking the land potential.

� Shifting from Capex to EMI/Annuity based projects.

Not only be best in the country but bringing the service

to international level