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DTC bus fare hike boosts project to involve corporate sector

Last Updated: Sunday, November 8, 2009 - 17:36

New Delhi: The recent bus fare hike
announced by DTC has given a fresh lease of life to the
government`s ambitious cluster bus fleet project in which a
world class bus system will be operated by the corporate

The project was almost shelved two months ago as it
was found inviable because of the then existing fare structure
and to start the project the government would have required to
provide huge subsidy to the private sector.

Describing it as his "pet project", state transport
minister Arvinder Singh Lovely said the government will
finalise the model to corporatise the private bus system in
next one month.

"We have not shelved the project. It may be finalised
in next one month," Lovely said.

Almost a year ago, the transport department had
finalised a plan dividing nearly 650 bus routes across the
city into 17 clusters, each comprising profitable and non
profitable routes to be run by one a private operator.

The government wanted to do away with competition
and that is why they sought to give one cluster to one
corporate entity.

As per the plan finalised by the Delhi Integrated
Multimodal Transit System (DIMTS), the transport department
will finalise the bus fares, which will go to the government,
while the private operator will be paid a fixed amount on the
basis of every kilometre travelled.

The government floated a global tender in February
this year to award the first cluster and accordingly, the
lowest bidder Star Bus Ltd, which quoted a rate of Rs 47.50
per km per bus (Rs 85.87 crore per annum) to run 231 buses,
was selected.

However, when the matter came to the Delhi Cabinet
for final clearance, Finance Minister A K Walia opposed it
saying the government will have to shell out Rs 85 crore per
annum to a single operator, which would not be viable
considering the financial resources.

He argued that the government will have to spend lot
of money on infrastructure projects for the Commonwealth Games
and thus it would not be viable to go ahead with the bus
cluster project.

As per calculations, if the government had accepted
the Star Bus Ltd’s bid, it would have to give a subsidy of Rs
25 to Rs 27 per km per bus as expected revenue from ticket was
estimated to be in the range of Rs 22 to Rs 25 per km per bus.

But, as the bus fares have been increased sufficiently
recently the government may not require giving subsidy and the
fixed annual contract amount may come from revenue collection
through tickets issued, officials said

Lovely said during next year`s Commonwealth Games,
the DTC will have a fleet of 5,000 low floor buses and 2,000
general buses.

Bureau Report

First Published: Sunday, November 8, 2009 - 17:36
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