Eleven ideas to revive TSRTC, Prof. Nageshwar's talisman for ailing transport body

Hyderabad: Telangana cabinet appointed a committee of IAS officers to hold negotiations with RTC trade union leaders. The Joint Action Committee of RTC Trade Unions gave a call for a strike on the eve of festival season to force the government to heed to their demands. The on-going row between unions and the government/TSRTC management brings to the fore the vexed question of reviving the state transport undertaking.

There was no shortage of committees and studies. However, what is lacking is the political will to lift the government transport undertaking from the financial mess. If the government initiates action on the following eleven points, it can not only resolve the impasse but put TSRTC on firm financial footing.

1. Reduce the Tax Burden

TSRTC is running in losses to the tune of Rs 720 crore with accumulated losses of around Rs 2,000 crore. This is despite RTC demonstrating efficiency in fuel, human resources, tyre-use and better occupancy ratio (OR). Then why is RTC running in losses?

RTC is a public service like education, health, drinking water, sanitation, etc. Yet, public transport, an essential public service, is heavily taxed in the state. Robust public transport will contribute to social and economic development. World over, public transportation is considered critical infrastructure for growth. Quite surprisingly, instead of investing in this vital infrastructure, governments have been considering RTC as a revenue-earning sector, thereby condemning it to sustained losses and deliberate witch hunt.

The major component of RTC expenditure is on fuel and manpower. The public transport is a manpower-intensive sector and obviously cannot escape spending on human resources. However, official data suggests that the manpower cost as a proportion to the total expenditure of the corporation increased only marginally despite the expansion of services. This indicates the human resources efficiency of RTC workers. On the other hand, the cost of fuel has been rising over the years. So are the taxes on fuel — total diesel cost for RTC per year accounts to Rs 1,300 crore. Over half of the fuel cost is essentially the tax component. The central and state governments share these taxes on fuel. The tax on diesel is one of the highest in Telangana. Thus, at least Rs. 300 crore RTC spends on diesel goes to state government back in the name of taxes. If this is transferred to RTC, the corporation’s losses will be wiped out to the extent of over 40 per cent. Even a reduction in the taxes as in the case of Railways would benefit RTC to a significant degree. The successive state governments in both Telangana and united Andhra Pradesh have been paying deaf year to this long-standing demand. A committee comprising of experts from Indian Institute of Management (IIM) Bengaluru, had submitted a report to the united Andhra Pradesh government. It recommended that at least the taxes on loss-making routes be scrapped, as the RTC is discharging social responsibility on behalf of the government to provide connectivity despite being commercially unviable.

Besides, the taxes on diesel, the RTC pays Motor Vehicle Tax to the tune of Rs 290 crore per year. Similarly, the RTC pays Rs 150 crore on spare parts. Taxes on these three heads itself accounts for Rs 740 crore while losses are only Rs 720 crore. Therefore, excessive taxes imposed by the state government itself are responsible for the losses. Besides, there are taxes by the central government as well.

2. Relieve the diesel Cost Burden, follow the TN model

Diesel accounted for around 20 per cent of the total expenditure of RTC in 2015. Now it stands at 32 per cent. On the contrary, the cost of salaries and allowances of RTC workers and employees increased from 54.85 in 2015 to 56 per cent in 2018-19 as part of total expenditure. The higher expense entailed on diesel is not within the hands of RTC.

To protect RTC finances from ever-increasing fuel costs, the Tamil Nadu government froze the fuel cost at 2011-2012 prices and the subsequent hike in prices was reimbursed by the state government. Why can’t Telangana follow the Tamil Nadu model?

3. Provide Budget Support

Advanced capitalist nations have enacted laws to provide budgetary support to public transport. However, governments in India are neglecting their responsibility in this regard despite recommendations by several high power committees in India and abroad.

4. Provide Viability Gap Funding

The government provides viability gap funding for infrastructural projects taken up even in Public Private Partnership (PPP). The L&T Metro is one such example. When can public transport like the Metro get viability gap funding but not the government-owned RTC? Nowhere in the world, will the ridership account for the total cost of public transport.

5. Commercially Exploit the Assets

The state government allocated valuable land parcels to Hyderabad Metro, which is developed commercially on a long term lease basis. This would offset the cost of Metro transport. The same facility can be extended to RTC. The RTC can float a Special Purpose Vehicle (SPV) and use this allocated land and commercially exploit the already existing assets. In fact, the state government had toyed with this idea. The government has to release the data in this regard.

6. Manufacture Components

The RTC spends enormous sums on purchasing components and spare parts. In fact, the United Andhra Pradesh government led by NT Rama Rao acquired land near Mangalagiri for setting up a tyre manufacturing unit. This would not only provide cheaper components for RTC, but it can even sell them in the open market as additional revenue.

7. Burden of Hired Buses

The RTC is bearing the burden of buses taken on rental basis. Politicians and RTC employees provide buses on hire for RTC under benami names. The RTC is losing revenue from this as indicated by official data. For instance, on average, RTC earns Rs. 2,577 more per bus per route per day as compared to hired buses. This reveals how much RTC is losing due to hired buses. The RTC authorities should explain the reasons for this huge discrepancy in the average earnings of own and hired buses.

8. Permit Cargo Transport

It has been a long-standing demand to allow cargo transport in a full-fledged manner. RTC has necessary infrastructure like buses, buildings etc. The Andhra Pradesh government has recently permitted parcel transport and is earning Rs 120 crore per year. The Telangana government can make more by allowing cargo transport as well. The RTC has to discard a bus after it travels over 10 lakh kilometres, as it is not suitable for passenger transport anymore. These buses can be used for cargo transport. The state government can provide RTC with orders to transport civil supplies.

9. Integrated Transport Management

RTC can increase its revenue by streamlining its services, especially by linking with Metro by running minibuses between nearby colonies near the metro stations. This can be a win-win situation for both RTC and Metro.

10. Improve Road Infrastructure

The poor quality of roads and improper traffic managements result in a slow pace of public transport causing low fuel efficiency, especially in city transport. The TSRTC is losing Rs 400 crore per year in Hyderabad city transport. The maintenance of quality roads is not the responsibility of RTC. It is the state and central governments that have to maintain this necessary infrastructure.

11. Control Illicit Private Transport

The state government remains a passive spectator even when illicit private transport is thriving on the roads. Private buses are not permitted to run as stage carriers. They should only operate as tourist carriages. More than one bus is running on a single permit. Private operators are allowed to run buses on profit-making long-distance routes. This is nothing but privatisation of profits and nationalisation of losses.