A product of WRI Ross Center for Sustainable Cities

PRIYANKA VASUDEVAN

ALTERNATE FINANCING MECHANISMS: INNOVATIONS

FINANCING PUBLIC TRANSPORT

• Financing public transport is important to ensure that the quality of the services provided are delivered at maximum efficiency, to optimise the costs and revenues.

• One of the ongoing policy debates has been focused on how to find the necessary investment for the provision, operations and maintenance of growing transport supply needs.

Increasing fuel, fleet and staff costs are placing increasing pressures on the financial performance of transport systems.

Fares cannot be raised at will to increase revenues, affecting the ability to finance public transport operations.

ASSAM STATE TRANSPORT CORPORATION

KEY PERFORMANCE INDICATORS

Parameters Project Cost (crore Rs.)

Fleet Size (number of buses) 2627

Average earnings per month (lakh Rs) 645

Average expenditure per month (lakh Rs.) 945

Kilometers operated per month (lakhs) 23

KMPL 3.39

Monthly Ridership (lakhs) 11

Fleet Utilisation (%) 84

Staff 5,400

ASTC’S REVIVAL PROGRAM

• Repaired 235 shutdown buses with Government funds

• Replaced old buses in a phased manner by purchasing 100 vehicles out of Government funds and 200 vehicles by obtaining loans from financial institutions

• Reduced employees by 2,000 through a Voluntary Retirement Scheme

PRIVATE BUS OPERATION UNDER ASTC BANNER

• Initiated with 559 buses in 2001-02 and grew to 1,790 buses in 2005-06.

• Annual earnings increased from Rs. 2 crore to 14 crore.

Source Income (Rs. in lakhs)

Hotels 132

Cinema Halls 5

Shops 4

Parking Facilities 24

Total 165

OTHER INITIATIVES

BANGALORE METROPOLITAN TRANSPORT CORPORATION: LANDBANKING AND OTHER EXAMPLES

TTMCs IN BANGALORE

In recent years, BMTC became one of the few public transport agencies to operate at a profit. Despite its success, BMTC faced two major challenges:

• Alternate sources of revenue generation to maintain profitability and financial sustainability; and

• The provision of high quality support infrastructure to improve the level of service for bus users.

Traffic and Transit Management Centres (TTMCs)

This concept combines the development of passenger terminals, with the creation of commercial real estate space.

TTMCs IN BANGALORE

The TTMC concept consists of three main components:

• An integrated terminal with adequate facilities and amenities to cater to the requirements of all user groups;

• A mixed-use development with retail, office space and other commercial activity, to encourage people use bus for such activities.

• The provision of park-n-ride facilities to encourage the use of public transport.

BMTC has constructed ten TTMCs between 2009-2014, with initial funding was provided by JnNURM.

FINANCIAL DETAILS OF TTMCs

(Parwez 2013)

Sl No Location Project Cost (crore Rs.)

Commercial Real Estate Developed

(in sq. ft)

Average monthly rent from commercial space

(Rs.)

1

Shantinagar A Block

103.78

2,82,731 12,77,919

Shantinagar B Block 94.655 8,95,000

Shanthinagar MLCP Block 53,550 3,76,236

2 Koramanagala 64.34 3,10,785 6,81,5043 Banashankari 31.23 1,09,215 15,15,4904 Vijayanagar 56.6 1,65,799 24,27,2285 Jayanagar 13.9 61,184 13,76,3656 Whitefield 40.37 1,42,859 15,84,3497 Domlur 17 77,849 1,57,2108 Kengeri 37.5 1,09,779 2,56,7009 Bannerghatta 5.01 12,932 19,798

10 Yeshwanthpur 89.5 2,27,634 20,12,121  Total 460.15 16,00,512 1,25,79,920

TTMCs IN BANGALORE: UPDATES

• LED displays for advertising in buses • Leasing out space for installation of mobile

towers in BMTC’s 43 depots• Auction space at kiosks to the highest

bidder: exponential increase in rents from such kiosks from the earlier baseline figure of Rs. 30,000 per month to over Rs. 1.5 lakh per month

OTHER INITIATIVES

• Online Payment System: reduces delays, simplifying and expediting transactions with the Corporation’s vendors; credit facility with vendors

• Karnataka Urban Infrastructure Development and Finance Corporation Loans: lower interest rates, by swapping existing loans to the KUIDFC Fund, resulting in cash flow savings of 94.7 crore rupees per year

• Scientific Approach to Depot Provision: depot augmentation is permitted solely when additional capacity is required

• Purchase of New Buses and Tyres: based on long-term lifecycle costs, rather than short-term purchasing costs

A product of WRI Ross Center for Sustainable Cities

PRIYANKA VASUDEVAN

MORE INFORMATION: BUS KARO 2 PUBLICATION

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