BMTC plans to procure 1,500 buses through PPP model
BENGALURU: In a first, the cash-strapped Bengaluru Metropolitan Transport Corporation (BMTC) is planning to procure 1,500 buses through a PPP model.
Although the proposal is in its nascent stage, the new scheme is part of State Government's recent budget and the purchase is to be made in 20172018.
So far, the transport utility has depended on financial assistance from the State and Central governments, besides using its own funds, to procure buses. The new scheme allows capital investment from a private party . The cost of each bus is anywhere between Rs 25 and Rs 30 lakh.
BMTC MD Ekroop Caur told ET that the corporation is working on the scope and modalities before floating a tender."We are trying this concept for the first time but some other state transport corporations already follow this method. It will reduce the capital burden on us," she said.
BMTC chairman Nagaraj Yadav indicated that revenue-sharing with the private investor could be based on kilometres covered by the bus rather than a percentage of fare collection."The details on who bears operation and maintenance costs is yet to be finalised," he said.
Welcoming the move, World Resource Institute's Pawan Mulukutla said bus manufacturers should be part of the new business model. "It will help BMTC with maintenance, which usually sucks up a lot of money. As the life cycle of buses is anywhere between 8 and 12 years, repayment will not be a burden," he added.
Transport expert Ashwin Mahesh, however, raised a point of order: the government's unwillingness to fund public transport. "The government had money to construct a steel flyover but not to buy buses. Bengaluru needs at least 14,000 buses but government finds no money for this," he wondered.
Although the proposal is in its nascent stage, the new scheme is part of State Government's recent budget and the purchase is to be made in 20172018.
So far, the transport utility has depended on financial assistance from the State and Central governments, besides using its own funds, to procure buses. The new scheme allows capital investment from a private party . The cost of each bus is anywhere between Rs 25 and Rs 30 lakh.
BMTC MD Ekroop Caur told ET that the corporation is working on the scope and modalities before floating a tender."We are trying this concept for the first time but some other state transport corporations already follow this method. It will reduce the capital burden on us," she said.
BMTC chairman Nagaraj Yadav indicated that revenue-sharing with the private investor could be based on kilometres covered by the bus rather than a percentage of fare collection."The details on who bears operation and maintenance costs is yet to be finalised," he said.
Welcoming the move, World Resource Institute's Pawan Mulukutla said bus manufacturers should be part of the new business model. "It will help BMTC with maintenance, which usually sucks up a lot of money. As the life cycle of buses is anywhere between 8 and 12 years, repayment will not be a burden," he added.
Transport expert Ashwin Mahesh, however, raised a point of order: the government's unwillingness to fund public transport. "The government had money to construct a steel flyover but not to buy buses. Bengaluru needs at least 14,000 buses but government finds no money for this," he wondered.
