Financial Daily from THE HINDU group of publications
Wednesday, Mar 20, 2002
TN omni-buses morph into transport fleet
A row of buses parked in Chennai.
CHENNAI, March 19
YOU see them zipping past on Chennai's roads and highways ... gleaming coaches, emblazoned with reflecting stickers that catch the eye air bus, high-tech, air-suspension, semi-sleeper seats, the stickers say.
These are the omni-buses, the privately operated services that carry thousands of travellers everyday to major cities and towns within Tamil Nadu, and to Hyderabad, Bangalore, Thiruvananthapuram and Ernakulam in the neighbouring States.
But what is surprising is that the fleet of 750-1,000 buses, run by more than 170 operators, is yet to gain official recognition. The operators, who are not licensed to operate transport services, often operate under the garb of package tour operators, with a contract carriage permit.
This ambiguity gives the State machinery room to exploit them, allege the bus operators. In the absence of Government recognition and guidelines, surplus capacity has been created on most routes. Thus, only 20 per cent of the operators are able to sustain in the long run, say the operators. The Government is losing out on revenues, they add.
According to the Secretary, Tamil Nadu Omni Bus Owners' Association, Mr A. Afzal, the lack of legislative recognition allows the officials to exploit the operators, who in turn exploit the public.
Even established operators with a fleet size of between two to 60 buses, and who have been in the business for a few decades, have not been accorded official recognition.
This, despite the fact that successive State Governments have acknowledged that the private sector provided a much-needed service, he said. On the other hand, the Government operated services, though overloaded, were running at a loss.
The private operations, which essentially started as tourist package services, have evolved over the last two decades into transport services. The change was driven by the business opportunity such a service presented as well as the fact that tour packages were unviable, he said.
What is needed, according to Mr Afzal, is a change in the mind-set among the officials, who should realise that omni bus operations are "not illegal''. Further, the service only complemented the Government-run operations and was not a competing service.
Omni-bus tickets cost twice as much as that on the State transport corporation services. The real competition was from the Railways, he said. The fares on private buses were higher on account of the high overheads, including taxes and the more comfortable seating reclining and semi-sleeper seats, plush upholstery and air-suspension.
Also, the private operators' vehicles cost more. While an un-airconditioned omni-bus can cost up to Rs 18 lakh, including the chassis cost, a transport corporation bus would cost only half that, he said.
Further, since the transport corporations had their own maintenance facilities, their higher overheads would be lesser. If the state transport service was losing money, it was for other reasons and not because of competition, he said.
The private bus operators attribute their survival to their planning and control on finances, customer relations, punctuality, aesthetics and cleanliness, staff discipline and safety.
With a number of operators available, customers did not complain about deficient service you just lose them, he said.
The omni-bus operation has emerged as a major industry and an avenue for employment, he said. Each bus was backed by a team comprising two drivers, one cleaner/attendant, a person for maintenance and one in the booking office. In addition, the operators had ticketing offices throughout the State, besides scores of brokers. The buses had to be maintained and were a major source of income for the auto-components industry, he said.
The fleet turnover was high with buses being replaced every two years.
The President of the Association, Mr L.T. Chellasamy, says that with a State permit working out to about Rs 3,000 per seat per quarter for contract carriages, running a transport service was the only option.
At these levels, tourist packages were just not viable. Operators often applied for the three-State tourist permit, which worked out to Rs 12,000 per quarter. Besides, diesels cost had gone up from Rs 8.50 per litre to about Rs 19.50 in the last five years.The fuel cost per bus worked out to about Rs 3.25 lakh per month, he said.
The existing taxes were also exorbitant, he says. While the tourist permit cost about Rs 12,000 per quarter, the State permit worked out to about Rs 1 lakh for Tamil Nadu and Rs 50,000 each for Kerala and Karnataka.
According to Mr Afzal, the high tax structure in the State was discouraging tourist arrivals in Tamil Nadu.
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