Private buses have played a very crucial role in the social and economic development of Kerala. The State had, in the past, a unique and enterprising model in providing public transport services. But unfavourable policy decisions taken by the government against private operators resulted in a drastic reduction in their numbers. The recent notification No. B1/13/2016/Tran published by the Kerala government on September 14, 2020 is a take back on the idea of incorporating private players in public transport. The article attempts to look deeper into this issue.
Sreya Vaidyan and Praseeda Mukundan
Public transportation is an integral contributor to economic development and urban sustainability. It needs to be a holistic system, addressing accessibility, affordability and connectivity. Travelling by public transport needs to be a convenient choice, rather than a restricted mechanism.
The State government has been focussing on route nationalisation since a few years and this is done by restricting the private operators to function smoothly. From taking away their permits for Super-Fast and Super Deluxe buses, to the recent route length curtailment, all lead to a monopoly over public transport. Nationalisation is an injustice to the existing entrepreneurs and the public.
The Motor Vehicles Act, 1988, Section 99 does empower the State with ‘special provisions for State Undertakings’, provided that the undertaking is for public welfare or to specifically quote Section 99 from the Act, “State Government is of the opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service…” And, it is in this regard, the State is glorifying the role of Kerala State Road Transport Corporation (KSRTC). The Sushil Khanna Report, 2017, submitted by the Sushil Khanna committee tasked by the government to prepare the “crisis and turnaround strategy” for KSRTC, throws some light on the existing administrational capacity and operational efficiency of KSRTC. The report clearly points out that the corporation has failed to utilise the existing fleet and is functioning with no updated route rationalisation. Though the study was initiated by the government, what further actions were taken on this report are not brought to the public attention.
What does the New Notification Say?
Private sector is a key stakeholder and major contributor to the economic development of Kerala and the State should come up with more amicable proposals in public transport to facilitate private operators to participate and cooperate more efficiently. The recent notification No. B1/13/2016/Tran published by the Kerala government on September 14, 2020 is a take back on this very same idea of incorporating private players in public transport.
According to the notification, the trip distance of private buses is limited to 140 km. The limit will be applicable along 31 partially nationalised routes which were meant to be used by the KSRTC and private operators. 241 Ordinary Limited Stop Service private buses will have to limit their services to 140 km and this will have a huge financial impact on the private operators, who are already running in loss due to COVID-19. From around ₹8000 per bus per day, currently their collection is just ₹300-₹500 per bus per day and many operators are struggling to make ends meet. This is the second move to regulate private operators, after the 2013 notification (G.O(P) No.73/2013/tran) in which the government has taken over Fast Passenger, Super Fast, Super Express, Super Deluxe, etc. from the private operators, claiming to save KSRTC from loss, and stating vaguely on how economic KSRTC service can be for the commuters. In this regard, around 247 permits got cancelled. Now, 7 years down the lane, no profit has been made by KSRTC by this enforcement, apart from huge amounts that the private operators paid to the government in the form of taxes.
The new notification has put private operators’ business in a tough situation. More conditions such as ordinary limited stop private buses should stop at all the existing stops on their route and private operators are restricted from adding additional trips, are mentioned in the notification. These conditions can affect their existing permits and trips, inducing financial losses and thereby leaving no assurance of a profitable business in future for private buses. The highlight of the notification is that the right to operate any new service and to increase the trips (excluding the existing and operating permits under the above conditions) will be reserved exclusively for KSRTC. This will not just shut down the business of private operators but restrict the public from having a choice in the type of public transport they wish to avail.
KSRTC: A Loss-making Business
According to the 2019 data from the official KSRTC website, KSRTC has 5526 schedules and 5662 buses. The average earnings per kilometre (EPKM) is around ₹37.71 and the average earnings per bus (EPB) comes around ₹12,688. This was in the pre-COVID days, and yet KSRTC was running on an irreparable loss of ₹508.22 crores. COVID scenario cuts down the daily revenue to 50% and since then a stagnant graph in passenger numbers is seen. In this context, how KSRTC can take over the existing services of the private sector is a big question to be discussed in depth. The Sushil Khanna committee report is substantial enough to question the new decision of the government to take up more services at this point. Moreover, control over more routes means more buses and manpower, and how can KSRTC afford to add more burden to its existing crisis. KSRTC has availed a total loan of ₹3250 crore from the State till the last financial year, and got tax exemption till March 2021. The State needs to look into these and evaluate the capacity of KSRTC to take up more services. Currently, the State is providing financial support to KSRTC to pay salaries and pensions to their staff. Considering the current situation, KSRTC should concentrate on its existing services and try to improve, rather than limiting private operators from the public transport sector itself.
Public transportation should be looked in from a larger perspective, primarily considering the user needs. The State proposals should be in line with urban growth and the requirement varies from north to south. Even with the new initiative — the ₹4,500-crore e-mobility project to introduce electric buses in association with a Swiss major — the State should justify the need of such a large-investment venture, considering the amount of money it has already invested in the transportation sector. This also puts the State in question as it had shelved a Union government scheme offering 250 such environment-friendly vehicles. Committing to more initiatives without any feasibility studies can only bring more loss to the State. In 2019, a few AC low floor buses operated using electric power were taken on wet lease by the government from Maharashtra-based Maha Voyage LLP. This was an initiative to control atmospheric pollution, and the buses were launched under the zero-carbon emission label. But as expected by the experts, electric buses failed to operate efficiently in Kerala due to many reasons mainly pointing to the topographical challenges. Misguiding the public with “claimed profits” might help in justifying new investments, but if these do not yield good results, ultimately the government will be accountable.
Public transport should be open for private players as well. Encouraging the private sector to serve the public in an efficient manner should also be the focus of the government, rather than controlling the entire service in the pretense of public good. Instead of restricting them, the government could facilitate private operators to come up with better service strategies and economical options for the public.
Having monopoly over public transportation will yield no good. The direct impact of reducing public transport options will be the presence of more private vehicles on the roads. Public will opt for convenience and resort to private modes of transport. This will lead to more traffic congestion and ultimately pointing to bigger problems like air pollution, greenhouse gas emissions and so on. Any policy or rule to be enforced needs to give grounds for introducing it. Here, the government has clearly failed to explain the needs of this abrupt change in the existing transport service. To justify this, the government needs to produce a financial and performance assessment of KSRTC, the recent ‘route rationalisation’ reports and a survey to understand the actual needs of the public.
The State has a rich experience of having private buses on the Kerala streets for many decades, serving millions every day. Now, with no reason, the government — through the new notification — has decided to cut back the role of private operators while the State-owned KSRTC continues to make huge losses. Private players were also substantial contributors to the State exchequer. Not to forget the job losses (both direct and indirect employment) that would incur with the withdrawal of the private buses. Private bus operations were under strict regulatory mechanisms of the State, and now that structure will also fall apart with the new changes in the system. Ultimately, the regulator also becomes the operator.
Sreya Vaidyan was Project Assistant and Praseeda Mukundan is Senior Research Assoicate at CPPR-Centre for Urban Studies. Views expressed are personal and need not reflect or represent the views of Centre for Public Policy Research.
Featured Image source: OnManorama