What should BMTC prioritise – public good, or profit-making?

BMTC is one of the few profit-making public services. However, the public see the decision to buy high-end buses and hike prices according to the change in oil prices problematic.

The BMTC has been the city’s lifeline for many years carrying about 40- 45% of its commuters. With a fleet of over 6000 buses, the corporation can claim to have a significant presence in comparison to other city bus providers. The BMTC is also a monopoly in the sense that private bus companies are not allowed to ferry passengers on a mass transit basis.

Significantly, one of the strongest points of BMTC has been that it has largely been a profit-making body since its inception in the late 90s (when it was created out of the then BTS which was run by KSRTC). That profitability could probably be attributed to reduced legacy cost (reduced pensions), though in the past couple of years, the profitability has reduced.

However the notion that a mass transport service provider can make a profit is something that BMTC prides itself on and in fact been mentioned several times in the media by different officials. It certainly seems to have helped BMTC garner significant resources in terms of buses under JNNURM funding.

Decisions against poor commuters?

In terms of governance structure, BMTC is a transport corporation and runs pretty much autonomously, though technically there is some reporting to the Transport Department of the Karnataka government. This autonomy has allowed it to run without significant political interference, plan new routes, acquire new buses, and make changes to the fare structure linked to oil prices.

It is the last two points which have caught the attention of a few individuals and groups (Bangalore Bus Prayaanikara Vedike) according to whom the decision to invest in air-conditioned luxury buses (whose fares are significantly higher) or the decision to hike bus fares frequently goes against the grain of a public transport bus provider and is a disincentive to the government’s plan to strengthen public transport. It also leaves those sections of society who solely rely on bus services and affects their monthly budgets. These groups want the BMTC to be more considerate towards the needs of such sections of the population.

BMTC making profit where other transporters fail

If one compares the governance structure of the BMTC to a couple of other significant city bus service providers like the Bombay Electric Supply and Transport Company (BEST) of Mumbai or the Ahmedabad Municipal Transport Services (AMTS) of Ahmedabad, some key changes can be noticed. The most primary among them is that both the BEST and the AMTS have some form of reporting structure to their respective elected local municipal body.

The Bombay Electric Supply and Transport Company is managed by the Municipal Corporation of Greater Mumbai (MCGM) under a ‘BEST Committee’ which comprises of elected municipal councillors. Similarly the AMTS is managed by a ‘Transport Committee’ under the Ahmedabad Municipal Corporation (AMC). In both these instances, the elected municipal councillors have a significant say in the running of the public transport system.

Having mentioned the above, it is also important to mention that unlike the BMTC which has managed to make profits till recently, both the BEST and AMTS are loss making entities. In the case of the BEST bus service, the profits made by the electricity division of BEST cross-subsidise the losses incurred by the transport wing (though even the electricity wing has been incurring losses and has recently requested the state government to create some kind of bailout package for the entity; while in the case of the AMC, the state government is supposed to make good the loss incurred by the AMTS. However, recently these losses are being temporarily covered by loans granted by the AMC; as a result AMTS services have suffered significantly. As per latest public records available for 2009-2010, AMTS losses stood at Rs 120.68 crores and it was indebted to the tune of Rs 705.59 crores upto March 2010. For the year 2011-2012, the transport wing of BEST incurred a loss of Rs. 534 crores.

Significantly, there is not much to choose from in terms of fare difference with respect to the BEST and BMTC. BMTC and BEST charge Rs. 6/- respectively for the first stage of 2kms, while AMTS charges Rs. 3/- for the first 2 kms which then increases to Rs.7/- for the next stage. However, all three bus service providers plan to increase the fare structure to keep up with the increasing oil prices and to limit their losses.

Change needed, to benefit the poor

Given that the fares seem to be similar and that the administrators of each of these transport companies plan to increase fares, one might ask what a change of governance structure specifically in the case of BMTC would bring about. While there is no guarantee that anything might change, in terms of governance it would formally allow for elected representatives to have a say in matters relating to the BMTC. Presently, no such formal mechanism exists.

Thus if a certain municipal councillor would want an extension of a bus route to his/her constituency, or if certain sections of the society are affected by a fare hike, they could seek formal recourse through their elected representative who might take it up with BMTC officials. One will not know till different governance structure possibilities are explored.

Of course, such moves might also come with potential risks, like political interference, decisions to keep fares low/constant (populist moves) which might affect not only the profitability but also the operations itself.

The larger question though is what is transport meant to achieve? Is profitability meant to be the main aim of a public transport company, or is it a kind of public service – a means to an end. If fares keep on increasing, would it not eat into the budgets of middle and lower middle class families who rely on the BMTC to reach their place of work, schooling, residence etc? Can we find ways to balance the profit and public service aims?

Countries like Brazil have recently declared urban mobility to be a ‘social right’, something which is required to have access to other basic rights. It would mean an emphasis on affordable public transport, non-motorised transport and other such measures. While Bangalore or India for that matter need not go to such lengths, a open discussion on what do we want our public transport system to achieve, what should be the means and the ends, and other such important points is definitely required.

Related Articles

BMTC fare hike is irrational
Is the BMTC indulging in price-gouging?
Stage distance <2km: BMTC ends up charging higher ticket fare


  1. Vaidya R says:

    Profitability is important. Going after the government for dole-outs would mean bankruptcy for sure. One issue is that on one hand BMTC tries to model itself as a profit-making corporation when it comes to pricing, while on the other it functions like a slow-moving Govt department. This means that in many routes, more than connectivity, reliability is the issue which leads to lesser revenue and eventual cancellation. No efforts are being made to increase their profits through basic things like ensuring a better service so that more people would use it. Routes are added, schedules are printed which exist only on paper while the crew runs the buses as per their whims. No word on better maintenance to reduce breakdowns is heard either.

  2. Sunil Reddy says:

    If they can’t afford let them use Bicycles, Only Volvo’s should ply in the city. BMTC’s prime focus should be providing Luxury travel to S/W employees and higher middle class people.

  3. Arpit says:

    Need to reduce the rates. Bus fare in Hyderabad is nearby 40% less than Bangalore I don’t know why? BMTC should start Non Ac buses for Bangalore airport. Because http://www.olacabs.com and other cabs in Bangalore reduce the rate and offer Bangalore airport drop in just Rs 399 also for 4 people and BMTC charge 155 to 215.

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