MSRTC is tapping new opportunities to keep growing, and to improve its ability to sustain.

Story by: Ashish Bhatia

The Maharastra State Road Transport Corporation (MSRTC) bus stop at Dadar is always crowded. People board ‘Shivneri’ air-conditioned buses from the cramped stand under the Dadar TT flyover to go to Pune. One bus leaves every 15 minutes, and is destined to Pune station bus terminus or the Swargate bus terminus. Named after a historic fort in the state of Maharashtra where Shivaji was born, the Shivneri buses make a promising mode of travel; they are comfortable and fast.

Archana, a frequent traveller, is headed to Pune for her training, and has just bought a Shivneri bus ticket for Rs. 520. Her bus will leave in another 10 minutes. Not more than 50 m away, Mr. Kulkarni is standing in a queue to buy a ticket to go to Pune for the non air-conditioned Hirkani bus of MSRTC. The ticket costs Rs. 240. Another 50 m away from Archana is Rajesh. He is on the way to Uran, and is waiting for a ‘red’ ordinary bus. Catering to the transport needs of the people of Maharashtra, MSRTC operates 18,150 buses out of 607 bus stations and 3632 pickup sheds.

Some 20 minutes later, daftly cutting through Mumbai’s traffic, the Shivneri, with Archana onboard, is cruising on the creek bridge leading into Navi Mumbai. Kulkarni’s Hirkani semi-luxury bus has just left the stand and is taking a U-turn under the Dadar TT flyover. Rajesh’s bus for Uran has arrived, and he is boarding it. Having got down from the suburban train at Dadar railway station, Savita has walked for two minutes to where Rajesh is boarding the bus. Her ‘red’ ordinary bus to Dapodi is expected to arrive in another 15 minutes. The ‘red’ ordinary buses, fondly termed as ‘Laal Daba’ in Marathi, have been the identity of MSRTC from the time the organisation came into existence. Established in 1948, MSRTC, called as Bombay State Road Transport Corporation initially, runs 15,962 ‘red’ ordinary buses. They form the core of MSRTC’s opration even today. Starting operation with 36 Bedford buses in 1948, MSRTC operates 18,150 buses. Besides 15,962 ‘red’ ordinary buses, it operates 23 Shivneri Volvos, 949 Hirkanis, 592 Yashwant midi buses, 13 Sheetal AC luxury buses, two Ashwamedh Volvos, 73 hired Volvos and 536 city buses. It also operates 35 auto-transmission Scanias as Shivneris, and five multi-axle Scanias on long routes.

The bus Savita boards for Dapodi is a Ashok Leyland. Its body was built at MSRTC’s Aurangabad (Chikalthana) bus body shop. Building most of the buses it operates, MSRTC has bus body shops at Pune (Dapodi) and Nagpur (Hingna) besides Aurangabad. It is only the new breed of buses, the Scanias and Volvos, which come in a ready to operate form. Feeling cold, Archana looks up to the AC louvre built into the hat rack. She tries to turn it away, but it fails. The charging socket on the bus isn’t working either. For the money she has paid, Archana expects better service. To improve the service standards is one of the challenges that MSRTC is facing. Transporting 67 lakh people per day, it recorded a drop in the passenger count in FY2014-15 over FY2010-11 at 245 crore people and 253 crore people respectively. Operating 37416 routes, the drop is attributed to the arrival of private players. Ironically, the last time Archana took a private Volvo to Pune her experience was far from good. It felt like she was on a tour of the two cities as the bus took a circuitous and slow route out of Mumbai and into Pune.

The challenge of sustenance

MSRTC earned a revenue of Rs. 7038.43 crore in FY2014-15 from travellers, Rs. 23.26 crore was from other traffic revenue streams, and a sum of Rs. 196.97 crore was the non-operating revenue. The total earning for FY2014-15 was Rs. 7,258.66 crore. Not bad, but not the best, claim industry experts. They draw attention to the fact that MSRTC is incurring loses since 2012. The last time MSRTC made profit was in 2012. The year 2012 was the sixth year the organisation made profit. The loss in FY2014-15 was Rs. 391 crore.

While the arrival of private players, and their capability to offer better service may be a reason for travellers migrating away from MSRTC, the fact is, the organisation has seen a rise in employee expenditure and fuel costs. The total employee strength of MSRTC is 1,07,500. Inclusive of in-house and external training costs, expenditure on staff amounted to 38.76 per cent in FY2014-15; 34.01 per cent expenditure was on diesel and engine oil, and 4.85 per cent was on stores, repairs and reconditioning. Expenditure amounting to 11.81 per cent was incurred on passenger tax, motor vehicle tax and other taxes. Expenditure of 10.57 per cent was on account of depreciation, interest, insurance among other miscellaneous expenses. Paying Rs. 5.5 lakh tax per bus per year as compared to Rs. 2.5 lakh paid by a private operator, MSRTC has seen the running costs for the fleet per kilometre double. The costs have gone up from Rs. 19.39 in FY2005-06 to Rs. 37.89 in FY2014-15. Hinting at the social obligation his organisation is expected to fulfill, Ranjit Singh Deol, Vice Chairman & Managing Director, MSRTC, avers that his organisation has earned the loyalty of its passengers, especially rural passengers. He adds, “We cannot overlook our priority to fulfill social obligations towards the welfare of the people from different stratas of the society.” Offering concession to travellers from different stratas of the society during FY2014-15, over 50 per cent of the seats on a given route are reserved for various categories of passengers. This translates into 22 seats out the 44 seats a bus has. Some 625 buses operating in 125 tehsils of 22 districts are said to provide free of cost travel to school girls up to 12th standard under the ‘Manav Vikas Yojana’. The government reimburses for such allocation but at a later date. Till then, the MSRTC has to bear the costs.

Manpower

MSRTC employees make it what it is. Wages of MSRTC employees are claimed to be not on the higher side of the industry standard. MSRTC employees find it difficult to sustain, yet their dedication does not waver. Contributing money towards the ‘welfare fund’, and towards ‘family welfare’ scheme, the employees have seen their workload rise. A committee under a retired secretary level officer to study the wage structure has been constituted, claim industry sources. Awareness about difficulties the employees face is growing. The rupee-one lakh financial assistance given to the legal heirs of a deceased employee is looked upon as a good development. During FY2014-15, an assistance of Rs. 3.73 crore was given in 373 cases. Over 44 driver counselors are working on a honorary basis. In FY2014-15, 4820 drivers were counseled.

Apart from employee satisfaction and care, MSRTC is working on enhancing organisation efficiency without losing the ‘value for money’ proposition it offers. Expresses Deol, that there is a need to offer services that are comparable with some of the best private players in the industry, and at an affordable price. He adds, “Service at a tangible cost could be a simple math for a private operator, for us it is not. We are a ‘no-profit-no-loss’ undertaking, and therefore cannot engage in dynamic pricing like a private operator would.” MSRTC’s road toll expenditure amounts to a significant Rs. 142 crore. It has been a bone of contention between the STU and the state government. Consuming 10 lakh litre of diesel per day, which is supplied by Indian Oil Corporation at market rates, the operational cost of MSRTC for FY2014-15 was Rs. 7893.66 crore. Non-operational cost was Rs. 69.05 crore, and loan outstanding was in the region of Rs. 236.02 crore.

Claimed to be one of the largest STUs in India, the initial ratio of capital investment from central and state government in MSRTC was of the ratio 1:2. This operative model was scrapped in 1994. From 1994, the entire capital investment was converted into equity shares. Says Deol, that the corporation, as of current, is not entitled to any capital investment. Ten per cent out of the 17.5 per cent passenger tax collected, he adds, is ploughed back. Earlier it was five per cent. Cumulatively, Rs. 3000 crore has been the investment of the state government till now. Informs Deol, “The inflow and outflow in terms of cash management is neck-to-neck.” To ensure that loyalty towards its buses is not lost, MSRTC is reviewing its polices and contemplating their quick implementation. The idea is to increase the traveller count. Under the ‘Balasaheb Thakare Apaghat Sahayyata Nidhi, accident insurance will be increased to Rs. 10 lakh from rupees two lakh. To win more travellers, early this year, a decision to operate 500 air-conditioned buses was taken. These buses, states Deol, will ply under the ‘Shivshahi’ scheme.

Shivshahi

The 500 air-conditioned buses under the ‘Shivshahi’ scheme will be leased from private operators. They are expected to be deployed on routes leading into and out of Marathwada and Vidharba. Other regions will be also visited, but the priority is on these two regions. Shivshahi fares are expected to be 20 per cent cheaper than those of the Shivneri. They will be higher than the non AC Hirkani. Considering the significant expenditure MSRTC has made a representation to the government for exemption from road toll. Road toll in Maharashtra is among the highest in the country, and their number is also quite high, claim industry sources. Giving an example of the stretch between Pune and Satara, they add, the quality of road is also bad. Even highways like the Mumbai-Goa highway, where a bridge washed away in the rains, and took with it two MSRTC ‘red’ buses, are in bad shape. Citing that the roads connecting smaller towns and villages in Konkan and many parts of Maharashtra are in a highly deplorable state, sources mention that for an organisation like MSRTC it should be painful. They incur toll costs and high maintenance costs.

To ensure that its buses meet the Bus Code norms that have been implemented, MSRTC has fitted new Hirkani buses with comfortable 2×2 reclining seats. There’s more space between two rows. Rear suspension is pneumatic. Likely to provide women a reservation of 10 seats in the Shivneri, MSRTC, to reduce fuel costs, is taking measures like route-wise fixation of vehicles, speed governance, driver incentive and training drivers, and better maintenance of the vehicle. It is aware that a 10 per cent fuel saving translates into Rs. 259 crore worth of savings. A simulator training centre at Nagpur with the help of Western India Automobile Association has been established. For Bus Code compliance, MSRTC has entered into an agreement with CIRT, Pune. MSRTC constructed two bus bodies on Tata and Leyland chassis each and obtained the (Bus Code) type approval certificate from CIRT. Additional bus bodies are being built in compliance with the AIS:052 code in the three MSRTC facilities.

Other revenue sources

Tapping into additional revenue sources including ads on the back of the bus ticket, renting out hoardings and bus banners, 20 second slots per minute on passenger information screens, and display of two wheelers and farm equipment on specially designated platforms, MSRTC is looking at 30 bus terminals to take the lead in helping it to generate additional revenue. States Deol, “The extra revenue measures we are looking at will be not on Build Operate Transfer (BOT) basis.” BOT, he feels, will shift the focus from enhancing passenger amenities to exploiting depots for commercial interests. An estimated Rs. 2000 crore will be allocated towards building 13 new bus ports in-line with the Ministry of Road Transport and Highways (MoRTH) plan to build multi-storeyed bus ports that are expected to replace existing bus terminus. A project management consultancy firm has been appointed for the same and the Request For Proposals (RFP) are expected to be out by May 2017. The ports will be built on a Public Private Partnership (PPP) basis according to Deol. Some 30 architects have been given a free hand to plan what should make ports that are attractive to travellers. They should be future-ready too. A sum of Rs. 100 crore has been assigned for redevelopment of 41 bus stations. Other expenses that MSRTC will incur, include fitting of CCTV cameras, passenger information systems, workflow automation based on Enterprise Resource Planning (ERP). Buses would be fitted with GPS to optimise their utilisation; they will be also equipped with in-house Wi-Fi entertainment pack. Considering the pan-India implementation of BS IV emission norms by April 2017, MSRTC is inducting new buses. The cost of these buses will be inclusive of training drivers and mechanics to deal with the electronics and other advanced systems onboard the buses. Rear air suspension has been successful in Hirkani buses. Their success is encouraging MSRTC to extend them to the ‘red’ ordinary buses.

Opportunity for growth

MSRTC buses cover 57.12 lakh kilometres per day, a fact that is unknown to Vivek who is waiting for a bus to Gondakhairi at the Ravi Nagar stand in Nagpur. Ashok, waiting for a bus to Tuljapur at the Latur Bus stand is unaware of this fleet as well. So is Manisha, who is at the Islampur bus stand to take a bus to Kolhapur. Neither does Bhiku, who is waiting for a bus ride to Jawhar from Mokhada. Over 67 lakh people ride the MSRTC fleet every day. The buses operate at 70 per cent capacity according to Deol. He avers, “The challenge we face is like the chicken and egg story. If we should wait for the traveller count to go up and then add capacity, or should we add capacity for the passenger count to go up.” Deol is expecting the fleet count to increase to 25000 in the next three years. This is inclusive of a fleet that will be dedicated to offerings like logistics services. Load utilisation can go up to 90 per cent from the current 70 per cent. The organisation is currently plying up to 14-tonne vehicles. It is now looking at elevating this number to 17-tonnes.

Over 92.41 per cent of the MSRTC operations were by the ‘red’ ordinary buses; 6.57 per cent were by the semi-luxury Hirkani buses, and a mere 1.01 per cent were by the AC buses. Decommissioning 13 per cent buses on an average every year, in FY2014-15, MSRTC commissioned 675 new buses, re-body built 117 buses and reconditioned 1506 buses. Of the 1329 chassis that were purchased in FY2014-15, 768 were of Tata make and 561 were of the Ashok Leyland make. According to Deol, the organisation will purchase 244 bus chassis from Eicher in 2016 to build ‘red’ ordinary bus bodies. Rural focus continues to be the motto of MSRTC even as it invests in a modern bus fleet for inter-city and long distance services. Concludes Deol, “We are confident of negating competition from private players. Our endeavor is to take a holistic approach, and to address all the touch points.”

CAPTION

ð The ‘red’ ordinary bus of MSRTC has been its prime identity. These buses number 15,962.

ï Ranjit Singh Deol, Vice Chairman & Managing Director, MSRTC.

ò Hirkani is MSRTC’s semi-luxury service. On the Mumbai-Pune route it is called as ‘Nim-Aram’.

ñ Under the ‘Shivshahi’ scheme 500 air-conditioned buses will be leased.

ñ ‘Ashwamedh’ marks the premium luxury service brand of MSRTC.