fare policy for transport.pdf

8/14/2019 fare policy for transport.pdf

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FARE FIXATION POLICY FORPUBLIC TRANSPORT SYSTEM

Presentation by

.Member Secretary

NATIONAL CAPTIAL REGION PLANNING BOARD NATIONAL CAPTIAL REGION PLANNING BOARD NATIONAL CAPTIAL REGION PLANNING BOARD 1

NATIONAL CAPITAL REGION PLANNING BOARDWebsite: http://www.ncrpb.nic.inFax: +91 11 2464 2163

December 2009


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poor connectivity to jobs, services,

Lack of access to services leads to ,learning, health care, food supply etc.

mprov ng access a mus u as o eaffordable



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.

,

consumes less fuel, causes ess po u on,

Less congestion and Less accidents than private motorized

trans ort in terms of assen er-km.



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Rail vs. Road Transport

Year Mode % share in Total Transport Demand (Approx.)

re g assenger

Road 1950-51 12% 32%1999-2000 60% 80%

Rail 1950-51 88% 68%

1999-2000 40% 20%

ROAD TRANSPORT

freight traffic is likely to be in the range of 5000 to 7000 billiontonne kms by the year 2020 against 1100 bnkms in 2000.


10,082 billion pkms in 2020.


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Bus vs. Car/ Two wheelers

Vehiclekm

Passkm

Vehiclekm

Passkm

Vehiclekm

Pass km(billion)

Vehiclekm

Pass km(billion)

Bus 18.6% 87.4% 17.1% 86.5% 15.7% 85.4% 14.6% 84.2%

Cars 22.9% 4.2% 23.2% 4.4% 24.6% 5.0% 25.4% 5.5%

TwoWheelers

58.5% 8.4% 59.7% 9.0% 59.6% 9.6% 60.0% 10.3%

Total 118(100.0%)

984(100.0%)

181(100.0%)

1442(100.0%)

280(100.0%)

2074(100.0%)

417(100.0%)

2899(100.0%)


Source: 'Vision 2020 - Transport', Prepared for the Planning Commission by Mahesh Kapoor, October 2002


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Bus vs. Car/ Two wheelers Contd.

Share of Passenger Km

80

100

m (

% )

e es ma e s are nvehicle km, bus transport isserving 84% of passenger trafficthat justifies its prime importance.

0

20

40

60

h a r e o f P a s s

.

But, the share bus (road basedpublic transport) is founddecreasing over the years (from

Year

Bus Cars Two-Whelers

growth in private vehicles.

Reversing this decreasing trend

transport has become a necessityin solving many transport relatedproblems.

Public transport requires lessinfrastructure, consumes less

fuel, and causes less Pricing Policy is one of the major

tool towards this objectivepollution, congestion andaccidents than privatemotorized transport in terms


o passenger- m


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http://vorg.ca/2585-Cars-vs-Bus-vs-Bikes


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transport by addressing the existingissues a ro riatel coupled with need based

investment olic to createinfrastructure; and

a ro riate ricin mechanism tosustain the investment.



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What is appropriate Pricing Mechanism ?

Affordabilit to serve the urban oor with cross-subsidy element

and comfort level more than price. The cost ofproviding public transport to them need not be

.

Sustainabilit so as to meet the O&M and ca italrecovery with reasonable return through user faresand charges.



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Mandate - NUTP, 2006 Those who place a premium on cost are the poorest sections of

society and need to be given affordable prices. The cost forrovidin ublic trans ort for them needs to be subsidised b other

sections of society. However, there is another segment that values time saved and

comfort more than price. This segment is comparatively better offan wou s o pu c ranspor g qua y sys ems areavailable to them. The cost of providing public transport to them

need not be subsidised and can be met from the fare revenues. ,

different levels of services a basic service, with subsidised faresand a premium service, which is of high quality but charges higher

fares and involves no subsidy. In brief, the objective of this policy is to ensure safe, affordable,quick, comfortable, reliable and sustainable access for the growingnumber of city residents to jobs, education, recreation and such


.


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Mandate Contd. -

The objective is to introduce mechanisms and investmentstowards trip reductions (frequency, Trip length) and modalshifts in favor of buses and NMVs.

JNNURM and City Development ReportsMandatory Reforms:

with the objective that full cost of operation andmaintenance or recurring cost is collected within nextseven years.

security of tenure at affordable prices,

Optional Reforms

Encoura in Public Private artnershi Achievements: Rs 38,956 crores (January 2009) worth of projects were

got approved and Public transport component has received


the total JNNURM assistance.


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Demand Mana ementOptimise Demand:

-

priorities. Safe pedestrian and bicycle facilities r ce roa usage Parking policy Modal integration

Sustainability:

Economy cost effectiveness and affordability Adequacy feeder services



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Cost Components Policy Options1. Internal costs- infrastructure construction and maintenance(variable and fixed costs)- transport equipment construction andmaintenance

User charges

public procurement

2. External costs-Congestion - congestion charges

- parking fees- traffic management

-accidents (material, persons, animals) - road safety policy (standards, traffic management,education)- risk-related insurance premiums (= specific user-charges

- emissions/pollution (air, water,soil, climate change, acid rainetc.)

- environmental standards (vehicles, fuels)- traffic management (e.g. speed limits)- cess on fuel- specific urban measures (e.g. parking policy,

-noise nuisancerestricted access)- standards


- visual intrusion- ecosystem fragmentation - landscape and city planning


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basis of input costs, it does not consider itsaffordability by the commuters etc.Optimal fare: is arrived at after considering

system profitability, customer convenience. 100 % recovery of O&M cost in the short

run 100% recovery of capital cost recovery with

acceptable profit in the long run.



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O timal Fare

financial sustainability on long term basis optimal fare shall consider the following : be computed on regular basis for effecting changes in customer

fares;

Creation of contingency fund to meet all deficiencies in revenue, ,

parameters etc; passenger friendly fare system;

of inputs but should also cater to wild fluctuations therein, for itslong term sustainability;

should also not be so hi h as to cause hardshi s to low income


commuters and in turn cause socio-political problems.


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Cash in-Flows Fare Box Collection -

Property Development Advertisement

Charges from increased FSI along thecorridor Remittance by the concessionaire

Congestion taxFuel CellShare of Local taxes/Stamp duties/ External

NATIONAL CAPTIAL REGION PLANNING BOARD NATIONAL CAPTIAL REGION PLANNING BOARD NATIONAL CAPTIAL REGION PLANNING BOARD 17eve opmen arges


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If fares are set below cost and operating deficits covered from,

will be positive. In case such deficit is not funded , the long-termeffect will be to reduce the quality first and the quantity later

considerable evidence, even in relatively poor countries that thepoor are willing to pay more for a better service than provided at

existing controlled fares with bad service.

the trade-off between the controlled low price and affordability by thepoor actually has to be tackled with adequate care supported byscientific management decisions.

Appropriate cost reduction measures for Public Transport will help toreduce the fare level



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Fare Revision Sustainability for the system requires periodic revision to

Creates confidence among the operators; transparencyin future fare levels; avoids uncertainty & Generates-

Critical Factors: Increasing level of cost inputs Inflation level Time interval

Subsidy available, if any Affordability Acceptability Simple method & transparent approach



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Fare Revision Contd.

Revised fare = Existing fare + x + y where, x=a xe oy=a % of CPI or WPI efficiency factor

Examples:1. Toll Rates - NHAI

x=3%, y=40% of the Wholesale Price Index (WPI)Growth Rate

-.Y= 90% of the CPI Growth Rate (10% for efficiency)



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The Delhi Metro O&M Act, 2002 provides for fixation of

fare by a fare fixation committee.1 st Fare Fixation Committee was constituted in Dec 2003to recommend fares for the sections to be opened by Dec2004.

2nd Fare Fixation Committee was constituted in Oct 2005o recommen ares or e sec ons o e opene y ec

2005. At the request of DMRC, the Government has constituted

June 2009.



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BASE 1982=100

YEAR March

2004 204

2005 525BASE 2001=100

2006 119

2007 127

2008 137

2009 148

** Linking Factor for 1982 to 2001 prices is 4.63.

BASE 1982=100

2006 5512007 588

2008 634

2009 685

22

Source : Labour Bureau Government of India


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April 2005 525

Escalation Apr '05 to Mar '09 30.48%Extrapolation till Mar 2010 6.88%

Total escalation to arrive at March 37.35%

Average yearly escalation 7.47%



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A com arisonExisting Proposed

DistanceZones

MeanDistance

Fare (Rupees)ProposedDistance

zonesMean

DistanceFare

(Rupees)(KMs) (KMs) (KMs) (KMs)

0-2 1 6 0-2 1.00 8

2-4 3 8 2-4 3.00 10

4-6 5 9 4-6 5.00 12

6-9 7.5 11 6-9 7.50 15

9-12 10.5 12 9-12 10.50 16

12-15 13.5 13 12-15 13.50 18

- . - .

18-21 19.5 15 18-21 19.50 21

21-24 22.5 16 21-24 22.50 22

24-27 25.5 17 24.27 25.50 2327-30 28.5 18 27-31 29.00 25

30-33 31.5 19 31-35 33.00 27

33-36 34.5 20 35-39 37.00 29


- . - .

>39 39 22 >44 44.00 32


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.

the year 2010-11 when the Phase-II isfully operational. Maximum distance traveled shall go up to

44 KMs from 39 KMs earlier.KMs from 11.5 KMs earlier.

Increase in the ridership is estimated @per annum.



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O &M Ex ensesStaff Costs

.o Break up: 27 Subordinate staff, 17 Supervisory staff and

I Executiveo Salar as er revised scales & erks.o Staff Cost calculated for 164.335 KMs of Metro network

excluding the Airport Line.

a n enance cos so U/G: Rs 3.70 crores/KMo Elevated: Rs 2.78 crores/KM (75% of U/G maintenance

o This is based on Phase-II DPR estimates whichassumed a uniform figure of Rs. 3.70 crore per km for both underground as well as elevated sections.



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Contd.

Energy costso 22.39 crore Units consumed for 75.55 KMs in 2008-09.o x rapo a ng e a ove or . m s. un g ves e

estimated energy cost for 2010-11.

the Loan Agreements.

.cost of project for Phase- I & II (less cost of land)



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Maintenance Energy Total

Expenses (Rs In crore)

2010 - 2011 301.99 487.48 197.42 986.892011 - 2012 324.55 523.90 212.17 1060.61

- . . . .

2013 - 2014 374.85 605.10 245.06 1225.00

2014 - 2015 402.85 650.30 263.36 1316.52- . . . .

2016 - 2017 465.29 751.09 304.18 1520.57

2017 - 2018 500.05 807.20 326.91 1634.16

2018 - 2019 537.41 867.51 351.33 1756.242019 - 2020 577.55 932.32 377.57 1887.44



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rpor xpress e ro ne

The Airport Express Metro Line is being developedon a unique PPP model.The cost of civil structures is being borne by DMRC.The cost of systems including Rolling Stock is beingborne b the concessionaire.The concessionaire will operate the system for a 30year period after which the same will revert back to

DMRC.



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WPI in 2003-04 175.90

WPI in 2007-08 215.90

Escalation 2003-04 to 2007-08 23%

Average yearly escalation after deduction of 5.12% or e c ency



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Fare Structure of DTCPast Present

OrdinaryService

Fare OrdinaryService

Fare

Upto 4 Kms Rs.3/- Upto 4 Kms Rs.5/-

4-8 Kms Rs.5/- 4-10 Kms Rs.10/-

8-12 km Rs.7/- 10 km onwards Rs.15/-

12 km onwards Rs.10/- - -ow oor

Busesow oor

Buses

Upto 8 Kms Rs.10/- Upto 4 Kms Rs.10/-

8-16 Kms Rs.15/- 4-8 Kms Rs.15/-

16-24 km Rs.20/- 8-12 km Rs.20/-

- -

35

.kms

.


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Thank You

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fare policy for transport.pdf