Calling BMTC fare hike bluff

Why is BMTC raising ticket prices? Is it that they are not managing their revenues or functioning efficiently?

While BMTC has started some good initiatives like introducing new routes and Bus Day, there was a huge blow to the corporation – rise in diesel rates by Rs 3 per litre. Immediately BMTC announced a bus fare increase – was this hike seriously necessary?

Bus tickets. File pic.

The diesel fares rose by Rs 3. An average BMTC bus gives about 4 km/litre and some new ones go up to  5 km/litre. That means an average increase of about 75 paise per kilometre. The number of passengers travelling in a bus averages 40-45, meaning there is absolutely just less than 2 paisa increase per passenger. But BMTC  has increased the fare by Rs 1 per kilometre on average which means it has just increased BMTC’s profit per passenger.

Volvo buses were supposed to be incurring losses in the beginning; now they are breaking even. Tech parks like Manyata and associations like ORRCA have started hiring them too which means there is assured revenue there too.

Now where does BMTC use the revenue-apart from regular administrative expenses?

1. Replacement/procurement of buses – this wasn’t done last year according to news reports; In earlier years, JNNURM funds were used for buying new vehicles.

2. Construction of bus stands/TTMCs – mainly again through JNNURM funds.

3. School concessional passes are subsidised by Government – BMTC’s website says this is not taken into consideration in financial statement.
BMTC has failed to look at the following aspects.

* Day passes and other passes- It was a good initiative by BMTC, but there is a catch here. Even if you need to change just two buses, you are forced to use a day pass because the ticket fares are so high. These also encourages illegal re-use of day pass tickets. This is cutting down BMTC’s revenue.

* The ticket rates for first few stages have jumped by `2. If a person has to shell out `8 for travelling 3 kms, a two-wheeler becomes a cheaper option. People may even prefer to walk the distance, and others may team up to take an auto. These are going to be revenue losses for BMTC.

* The scheduling of depot trips is not proper. Buses often run empty to the depot from the nearest bus stop, meaning diesel is consumed but there is no revenue. This is generally noticeable in afternoons. Additionally there are only four depots that handle Volvos, so these buses often have to travel long distances from the last stop to the depot.

When a vast public service organisation like the railways has not raised the fares, why is BMTC doing so? With already high fares, where is all the revenue going?

Comments:

  1. Vaidya R says:

    From what I read recently Volvos have been making steady profits for sometime now. Either way, they’ve increased the monthly Golden pass rates by Rs. 100 which is just ridiculous. Come to think of it, this is public transport run by the Govt and not some private enterprise run business answerable to shareholders or focused on profits. That itself should have kept the prices in check.
    We can only hope that this current increase in rates will take care of future diesel price hikes too. It surely can’t be that every diesel hike gives them opportunities to raise ticket prices unreasonably to maximize profit.

  2. Deepa Mohan says:

    I too would like some more transparency from BMTC about why the increased fares are needed, when the organization is a profitable one..and if they are needed, where they are being allocated. It might not be a good thing to have a high profit motive for a public transport organization.

  3. Balasubramaniam Meganathan says:

    A public transport should never be run as a profit organisation. Profit should be incidential, the organisation goal should be to lure people to use public transport as much as possible.

    I have made an RTI application to transport authorities across prominent metros to compare fares with BMTC. The information is sought on various parameters and once available I will compile it and file a PIL, having travelled most metros,I have not seen fares anywhere as high as in Bangalore.

    I have written a blog on this,dont know if I can post the link here.

  4. Editors says:

    And meanwhile: BMTC increases short-distance travel ticket fares by 5 Rs from Aug 4th – for Vayu Vajra buses. See report.

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