Competition Reforms in Bus transport sector
(Madhya Pradesh & Gujarat)
National Advocacy Plan (CREW Project)
Shreya Kaushik, CUTS International
CREW NRG-IV Meeting, 8th April, New Delhi
Outline
• Key Issues (State Level)
⁻ Development of ‘Madhya Pradesh Transport Regulatory
Authority’
⁻ Advocating for bus transport reforms in Gujarat
• Key Issue (National Level)
⁻ Making Public Procurement of Bus Transport Services
competitive
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State-Level Issues
Development of ‘Madhya Pradesh Transport
Regulatory Authority’
CURRENT SITUATION
• Liberalised public transport sector after MPSRTC’s
disbanding in 2005
• DOTs function more as administrative body than performing
regulatory functions (limited to licensing and fare regulation)
• Fare determination mechanism: RTA decides the fares that
lacks an inclusive approach
• Low accountability of private bus operators: Gap in transport
availability on non-profitable routes and off peak hours
• Provision under the Planned Road Transport & Safety Bill
2014
3
State-Level Issues
Development of ‘Madhya Pradesh Transport
Regulatory Authority’
EMERGING ISSUES
• Low access to passengers on non-profitable routes (~ 60%
respondents complained about availability in intercity services)
• No accountability mechanism for private operators by the state:
Delayed or cancelled bus trips (grievance mechanism absent)
• Lack of route rationalisation  unequal distribution of routes
• Lack of mechanism of PPP in intercity segment
• Intra-city transport: BCLL acts as both operator and regulator,
creating a conflict of interest
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Work Plan & Envisaged Outcome
KEY QUESTION: Need for a body having the authority and
knowledge for regulating MP’s bus transport sector (economic and
administrative)
• Govt. interested in developing a ‘Madhya Pradesh Intercity
Transport Authority’
• MPITA in the inception stage and need refining (functional and
administrative)
• CUTS to provide ‘knowledge partnership’ to DoTransport (Govt. of
M.P.) to incorporate key functions like route rationalization, fare
setting, better public private partnership, etc.
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State Level Issues:
Advocating for bus transport reforms in Gujarat
CURRENT SITUATION
• Stage carriage monopoly to GSRTC on intercity routes (1994
Govt. Gazette)
• Shrinking fleet size of GSRTC, led to the entry of private
operators
• High operational cost of GSRTC (about US$47mn in 201213), burden on the state exchequer
• Private operators deemed illegal on the stage carriage routes
(Only 2%-18% respondents found service of the public
operator significantly better than private competition)
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State Level Issues:
Advocating for bus transport reforms in Gujarat
EMERGING ISSUES
• Decline in GSRTC’s passenger carrying capacity from 1.27
billion in 2003 to 0.84 billion in 2013
• Private operators incurring additional transaction costs and
‘rents’
• There is need to let private operators enter inter-city market
• Intra-city Transport:
⁻ AMTS enjoys a monopoly, even though incurring high operational losses
(Rs1.7bn in 2012-2013 alone)
⁻ Shrinking fleet size and private players are sub-contracted for fleet
operation
⁻ They have to attach their fleet to AMTS with no individual recognition
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Work Plan & Envisaged Outcome
KEY QUESTION: Need for policy refinement for an efficient
bus transport sector in the state
• Political Economy Analysis of continuing 1994 Gazette order?
⁻ Primary and secondary research (winners Vs losers)
⁻ Evidence to sharpen advocacy efforts
• Need for a ‘State Road Transport Regulator’
⁻ Development of ‘Concept Note’ in line with MP’s experience
⁻ Covering issues related to route rationalisation, better PPP
mechanisms, fare setting etc.
• Reducing revenue burden of AMTS with better PPP mechanism
8
National-level Issue:
Making Public Procurement of Bus Transport
Services competitive
• Ahmedabad (Gujarat) and Bhopal (MP) have one operator
each in the BRTS segment
⁻ Chartered Speed Carrier (Ahmedabad) and Capital Roadways (Bhopal)
• Does ‘eligibility criteria’ for BRTS bidding, limits the number
of worthy operators hence limiting competition (lack of an
institutional guideline on competitive procurement process)
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Work Plan & Envisaged Outcome
KEY QUESTION: Need for infusing competition principles in
public procurement of buses in BRTS
• Plans of liaising with CCI: Need for inducing competition in
public procurement with evidence from the DCR
• CUTS to facilitate discussions between CCI and relevant
departments/officials in the two states to develop ‘institutional
guideline on competitive procurement’ of bus services
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Thank You!!
shk@cuts.org
www.cuts-ccier.org/crew