State RTCs reported losses of Rs 13,957 crore in 2016-17

A review of 56 state road transport undertakings (SRTUs) by the ministry of road transport and highways (MoRTH) revealed that 49 of them were in the red in 2016-17. Also, the cumulative losses of the SRTUs mounted to Rs 13,957 crore in 2016-17, up 24% over losses reported in 2015-16.

The top five SRTUs that incurred losses in 2016-17 was DTC (Rs 3,832 crore); Kerala SRTC (Rs 1,770 crore); BEST Undertaking (Rs 990 crore); Telangana SRTC (Rs 749 crore) and Haryana ST (Rs 598 crore). These five SRTUs together accounted for about 69% of the total losses reported by SRTUs.

The SRTUs which made a profit in 2016-17 are Andhra Pradesh SRTC (Rs 299 crore), UPSRTC (Rs 97 crore), Kanpur City TSL (Rs 8 crore), Bihar SRTC (Rs 7.8 crore), PUNBUS (Rs 4.3 crore), Sikkim NT(Rs 3.6 crore) and Odisha SRTC (Rs 1.8 crore).

“An examination of the loss-making SRTUs shows that costs are much higher than the revenue earned in loss-making SRTUs mostly because fare revisions have not kept pace with cost increase. Other challenges include competition from the private bus operators and social obligation to ply on uneconomic routes as well. There is a continuous need for route rationalisation to enable SRTUs to cross-subsidise their operations,” Giridhar Aramane, secretary, MoRTH, said in the “forward” note of the report released last week.

To improve the performance of the fleet, there is a need to improve the technology of vehicles, change fleet composition through purchase/hiring of buses. There is also a need to deploy IT services and Intelligent Transport Systems such as Electronic ticketing system; GPS vehicles tracking system; online bus reservation system etc to make the bus services more responsive to the needs of the customer to improve bus occupancy ratios and make bus-based transportation a preferred mode of travel to private transport, he said.

MoRTH has engaged the World Bank in collaboration with Transport for London (TfL) for making policy recommendations for improving public transport undertakings. The SRTUs in the state of Maharashtra and Andhra Pradesh have been taken as a pilot for this study. The report is under process and is expected to be finalised shortly, Aramane said.

Of the 56 SRTUs reviewed, 26 stated road transport corporations (SRTCs), 10 companies, eight government departmental undertakings and eight municipal undertakings. These SRTUs provide passenger transport services for rural, inter-city and urban areas.

Total revenue of SRTUs including traffic earnings, non-traffic revenue and subsidies of the 56 SRTU’s increased by 1.96% to Rs 55,821.95 crore during 2016-17 from Rs 54,747.69 crore in 2015-16. Traffic revenue constitutes about 81% of the total revenue.

Total expenses of all the 56 STRUs taken together has increased by 5.72% from Rs 66,003.96 crore in 2015-16 to Rs 69,778.71 crore in 2016-17. The operating cost in 2016-17 which accounts for a share of 74.17% recorded an increase of 6.83% over 2015-16, while non-operating cost has increased by 2.66%. Staff cost accounts for about 44.58% of the total cost followed by the cost of fuels & lubricants of 25.96% with the cost of tyres & tube accounting for only 1.5%.

The non-Operating cost which accounts for about 25.83% of the total cost, has interest payments as the largest contributor as it accounts for about 8.88 % in the total cost, followed by taxes (5.65%).