Aug 2, 2008

India - DTC,Low Floor Performance

The Delhi Transport Corporation (DTC) has a fleet of some 3,600 buses. In two years, it will have 80 per cent more buses, despite retiring about half of today’s fleet. That is not because the existing fleet is old — most of the buses were inducted only a few years ago when DTC switched from diesel to gas as fuel. But DTC is buying 5,000 new low-floor buses (of which a quarter will be air-conditioned), for Rs 1,800 crore. The first few of these are already in operation, and have given the city’s streets a noticeable face-lift with their bright colours, hi-lux lighting inside the buses as well as on the display panels, and contemporary styling. Already, the existing CNG fleet looks as though it belongs to the last century. By the time the Commonwealth Games come around, Delhi will have the country’s largest and finest city bus service.

DTC does not have the money to finance this dream, since it has the distinction of losing more money than the rest of the country’s city bus systems taken together. Last year, it lost more than Rs 1,000 crore, with total costs being four times revenue. Even its operating costs are twice revenue. And its employee bill alone is more than the revenue it earns. With those numbers, it is a disaster on the road, in more ways than one.

What is the problem? DTC has 10 employees per bus on the road. So does Mumbai’s BEST, but Mumbai with slightly fewer buses carries 75 per cent more passengers. To be sure, the average trip length in Mumbai is shorter, but even if you count seat-km per bus, there is a huge difference in productivity. Bangalore even managed to run its bus service at a profit for some years, and now has only a marginal loss; Chennai has far better operating efficiencies. From whichever angle one looks at it, DTC brings up the rear.

It is an old problem in India’s public sector. Services have to be provided to citizens, the chosen vehicles for doing the job are run badly, but more money is shoved down the same pipe while nothing is done to improve performance. Delhi’s citizens feel chuffed about the new buses on their roads, but this is a gift to them because DTC’s finances will get hobbled even more when it has to service the capital cost of its snazzy new fleet. The capital’s already pampered citizens know none of this, of course — in part because DTC’s last available annual report is three years old.

DTC is now busy getting into side activities. It is re-designing its 4,500 bus stops so that advertising space will fetch many crores every year — in the fullness of time, perhaps as much as it gets from passengers. It wants to develop its 35 depots, many of them in prime locations, as real estate projects, complete with budget hotels and perhaps shopping malls. All of which is fine, but that should be icing on the cake, not a substitute for operational efficiencies.

Fixing a bus service is not rocket science. Bangalore’s bus service was set right because a dynamic officer teamed up with a good minister to do all the right things. DTC, in contrast, once had a minister from a neighbouring state who ordered that thousands of voters in his constituency be hired as employees. The official who was the DTC boss (he went on to become a prominent minister in the central government) duly obliged, and destroyed DTC’s finances — not for the first or the last time. The question is, when will Delhi be lucky to get the accidental concatenation of forces that Bangalore did?

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