OWNERSHIP AND REGULATORY OPTIONS FOR URBAN BUS TRANSIT SYSTEM IN INDIA

Abstract

Urban public transport in the Indian context is the bus transit except in megapolis like Bombay, Calcutta and Madras where track based systems exist. Out of total travel by urban public transport modes, 69 per cent was the share of the buses alone in 1985. In 2001, there will be three-fold increase in the demand for urban bus transport. To manage such large volume of passenger nx>vement of bus, it is the right time to design apolicy for bus transport such that it provides efficient and adequate bus services in terms of quantity and quality. The present ownership structure of urban bus transport is a mixed one with major thrust on public sector monopoly. Single public entity (Munici pality or State or Central Government) is responsible for all functions of bus service provisions. Thus planning, design, coordination as well as operation and control, all have been with one agency even wnen the system has a few thousand buses as in case of Delhi, Bombay and Madras. The present ownership structure came into existence after the Central Road Transport Corporation (RTC) Act, 1950 or local Municipal Acts of different cities. In some of the cities (like Calcutta and Delhi) public and private bus operators coexist on a part of the network. However, there has not been a formalised and well defined licensing system for controlling quantity and quality of bus transport which can involve both ownerships (public and private) in a competitive environment for producing efficient and effective services. The present policy of public sector monopoly has not been able to any credibility through its existence for four decades. Large public agency as owner and operator of the system could not deliver cost-effective products. Also, the users were not at all satisfied because of overcrowding (iii) (load factor about 2.0 during peak periods) and poor quality. In bus service industry, the performance in terms of efficiency and effectiveness is directly related to the structure of ownership-operation (monopoly versus competitive) and the regulatory mechanisms (quantity and quality control methods) provided under various legislative Acts. The public transport can remain as social service not only by keeping the fares unexpectedly low, but by providing innovative services of different quality to different groups of travellers with appropriate fare structures. The evidence from UK, USA and Australia as well as developing countries like China, Korea, Argentina, Sri Lanka, Israel, and others on the productive efficiency of bus opertions suggests for abondoning the policy of gross nationalisation. Also, comparison of existing patterns of bus operations in India provides a case for urban bus services being best supplied by many small but coordinated public and private operators. Therefore, it has been clearly established by this and other research findings that basic criteria for viability of urban bus services is centered upon the single most important criterion i.e. ownership. All other criteria like competition, vehicle size, different qualities of service, organisation by cooperatives and adequate regulation are related to the ownership-operation-regulatory strategy adopted. There is wide scope of developing alternative scenarios of ownership - regulatory policies for urban bus transport provision. This complex planning problem has been tackled by stratifying it into different levels from strategic emphases (highest) to operational level (lowest). For shaping the various alternatives, relevant decision areas are identified and defined in each of the levels. Different scenarios of ownership - regulatory-operational strategies are developed with the help of decision graphs by mixing the various options logically from different decision areas. (iv) The second part of the thesis provides a theoretical framework for evaluating basic ownership options. Relevant indicators of efficiency and effectiveness were selected to evaluate public and private ownerships from the existing cases in India. The available data from public sector undertakings were utilized and the sample surveys were conducted in Delhi, Calcutta and Mangalore to obtain the data for privately produced bus services by interviewing selected private operators. The data for quality of service were collected in Delhi by interviewing the regular commuters on sample basis who had enough experience of services provided by different operators. Public ownership was evaluated at system level by examining the performance trends for four years for ten selected cities. The performance of public and private operators were compared for operation in the same city (Delhi) under two different regulatory scenarios. In prenMarch 1988, when private operators were under full control of the public agency (operator) the performances were compared at regional and route levels using the data available from public agency. Sample surveys were conducted for comparing the performance of public and private operators for the post-March 1988 scenario when private operators' objective has changed completely from just operation of paid kilometers (in pre-March 1988) to maximizing the revenue by maximizing the passengers (while fare is controlled by public authority). One of the important aspects of the performance of urban bus services is the production cost. To develop a comprehensive analysis of all costs (to operators, user and society at large) under different ownerships is beyond the scope of this study. Therefore, the thesis focusses mainly on the resource costs of providing stage-carriage service under public and private ownerships. Cost structures under both ownerships were analysed (v) for developing two types of cost models. The descriptive screening model was utilized to study the non-uniform variables which explains the basic differences existing in the cost structures of the public and private ownerships. The quantitative models have been developed to study the effects of various cost items which contribute to the increase or decrease in the operating cost over time. Minimizing the cost of producing the service is the main objective of the operator, while users of the system are interested in good quality of service. Six aspects of a quality were considered and a quantitative evaluation of the quality has shown the credibility of public and private ownerships. Sample surveys of bus commuters were conducted at two different times (pre and post March 1988) for studying two different regulatory setups. Opinions in the term of order of preference/importance for aspects of quality and attributes within an aspect were obtained alongwith performance rating for each attribute. Psychometric analysis were carried out on the responses obtained in the questionnaires to derive a single value of the weight for the attribute and the aspect of quality. The cumulative weighted sum of performance scores of all the attributes for each provider produced acomprehen sive quality score which can be compared among the providers. The analysis of the performance under public and private ownerships has established the fact that the ownership pattern in the form of Corporation or Municipality under public ownership is not the only arrangement for the provision of urban bus services. On the contrary, individual private operators without any financial support from the Government have produced comparable services. However, adequate regulation and effective enforcement are required to increase the welfare facilities for the private bus crew and to ensure a good quality of service in terms of reliability and safety. Moreover, a shift from the monopoly setup to competitive environment is (vi) quired to produce services efficiently as the performance over years has shown decreasing trend for most of the bus systems under public ownership. In a competi tive environment, multiple providers can deliver a variety of services with differ ent size and design of the vehicle (body) which are needed to the different groups of urbanites. The final part of the thesis develops a technological policy framework by examining the existing supply mechanisms and based on the performance of bus servi ces under public and private ownerships. The provisions in the two Central Acts- Motor Vehicles Act of 1939/1988 for the regulation; and Road Transport Corporation Act of 1950 for the organisation of bus services were analysed. Various shortfalls were identified and suggestions made for necessary modification. Three distinct technological policy packages have been suggested to obtain the desired product for urban bus services. The first package is designed for sep arating planning and design from operational functions of urban bus services. Single public transport authority at local level plans, designs and coordinates variety of bus services; while public and private operators are involved through competitive tendering process to the services specified by the authority. Speci fications for equipment, crew and service quality were developed for competitive contracting. Three types of contract mechanisms were developed for an urban bus network. The selection of the contractor has been recccrmended to be based on the objective assessment of vehicle, operator and crew as well as physical verification. To regulate and organise the operations of various services on different routes by multiple providers, the mechanism of route association and rotative cooperative system have been illustrated. Three techniques - preventive, persuasive and punitive have been suggested to enforce the various provisions of the Act and the specifications in the contract. The other two carmitment packages for interim arrangement were designed to enhance the performance of existing State Transport Undertakings (vii) re (STUB). The second package for immediate action aims to improve the performance of STUs without any significant disturbance in the organisational structures or changes in the Motor Vehicles Act of 1988. The other in:erim package is the strategy of decentralisation of STUs by forming cooperatives within the management of STUs. This research, being first of its kind, has contributed a major step in the direction of creating competitive environment (for providing urban bus services) from the monopoly setup that is existing (since four decades) in India. The perceived efficiency and effectiveness tradeoffs in regard to involve private sector can not be settled by research and scientific knowledge alone. They involve legitimate questions of national preference and values and therefore, must be genuinly supported by political process. Nevertheless, this research has established definitive assessments and findings in order to fulfil the responsibility of providing technical support to policy makers in the field of urban bus transport. Policy is not unchangeable, but rather a consequences of mutually interactive learning process between Government, users and providers of services - both public and private. (