MANAGING VOLATILE COST STRUCTURE THROUGH ADAPTIVE BUSINESS MODEL BMTC INITIATIVES
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1 PRESENTATION ON MANAGING VOLATILE COST STRUCTURE THROUGH ADAPTIVE BUSINESS MODEL BMTC INITIATIVES By Anjum Parwez, IAS Managing Director BMTC, Bangalore 23rd August 2013 It was first public transport company in the princely state of Mysore, established on 31 st Jan 1940 as Bangalore Transport Company. On , it was Merged in to Mysore Government Road Transport Department. Became an operating Division of Mysore State Road Transport Corporation on 1 st August 1961, as BTS. Formed as an independent Transport Corporation on 15 th August 1997
2 Daily Service KM Total Growth: 46% Annual Growth Rate: 7.97% Bus Fleet Total Growth: 86% Annual Growth Rate: 8.05% Since 2004 Overall Increase: 64.7% Annual Rate of Growth: 6.4%
3 Staff Strength ' '98-99 '99-00 '00-01 '01-02 '02-03 '03-04 '04-05 '05-06 '06-07 '07-08 '08-09 '09-10 '10-11 '11-12 '12-13 As on August 2013 Own 6587 Buses Operate 6441 Bus Schedules Perform LakhService Kms. Make Bus Trips Earn Rs 5.00 Crore Carry 49 Lakh Passengers Bus Depots 39 Bus Stations 50 Manpower Bus Staff Ratio 5.2
4 Expenditure Component for the year Growth of Cost Component (In Crore)
5 Cost of Capital Increase in Diesel Prices (In Rs.) Date Price Date Price In a span of two years diesel prices has increased by 30.70% It is increasing almost every month
6 Increase in Staff Cost (In Crore) Period Staff Cost Jan-Mar Apr-June Jul-Sept Oct-Dec Jan-Mar Apr-June Jul-Sept Oct-Dec Jan-Mar Apr-June Jul-Sept In a span of two years staff cost has increased by 59.10%
7 Rs. Crore Accumulated Loss / Profit Passenger Fare Revision Policy Increase in the Price of Diesel F(DPA) = (F-D)+(RPD/BPD) x D) Where, F(DPA) is the revised fare in terms of Paise per passenger km. D is the earlier diesel cost per passenger km. RPD is the revised price of Diesel. BPD is the earlier basic price of the Diesel. Increase of Dearness Allowances rate FR = F+(CPKM(L)/CPKM)x P x F/100 Where, F is the current fare per passenger km. FR is Revised Fare Paise per passenger km. CPKM is Total cost per km. CPKM(L) is staff cost per km. P is the % increase in the staff cost due to D A increase over the previous staff cost.
8 Date Fare Revision (Percentage) Cumulative Increase (Percentage) Year EPKM Fare Revision Earning Per Km (EPKM) Growth Increase (Percentage) Cumulative Increase (Percentage)
9 Travel Expenditure for the journey from KBS to Kadugodi for Various Modes of Transport Sl.No Mode of Transport 1 BMTC BUS 2 Personal Vehicle (Two Wheeler) 3 Personal Car 4 Private Taxi Type Distance in KMs Amount Wear & Tear Total Amount Amount per KM Amt per person per KM Volvo Ordinary Bike Scooter Petrol Car Diesel Car Small Sedan Note: 1. Diesel Rs KMPL for Diesel Car: 15 KMPL for Scooter: Petrol Rs KMPL for Petrol Car: 15 KMPL for Bike: 45 Wear & Tear Cost Estimation: Private Taxi Charges are ascertained from Private Taxi Operators 1. For Two Wheeler : Re.0.50 per km 2. For Four Wheeler : Re.1.00 per km
10 There is limitation on increasing the Passenger Tariff Other Sources of Revenue Generation Efficiency Improvement Cost Cutting Popularizing Public Transport Operational Optimization Traffic and Transit Management Centers (TTMCs) BMTC is the first urban transport organization in the country to get JnNURM funding for a national pilot project for an innovative idea called TTMC. Construction of 10 Traffic and Transit Management centers was taken and all have been commissioned. TTMCs were taken up to; To Provide an integrated transportation facility with adequate facilities and amenities to cater to the requirements of all user groups. Smooth flow of all types of traffic to and from the terminal such that there is no congestion/disturbance caused to traffic along the main road. Minimum /no conflict between various traffic types-passengers, buses and private vehicles and to achieve minimum passenger and vehicle processing time. To encourage use of public transport and provide first-mile connectivity through provision of park and ride facilities.
11 Facilities at TTMCs Bus terminal Bus bays Platforms Seating & lighting Public conveniences Information systems Safety and security Bus maintenance depot Maintenance bays, Washing platform Bus parking Services and Utilities Fuel filling station Amenities for crew Passenger amenities Bangalore One centers Other citizen amenity centers ATMs Daily needs shopping Park and Ride facilities Before After Expenditure on these 10 TTMC is Rs. 425 Crore. Total built up area lakhs Sqft. Out of which 6.2 lakhs sft. is for Bus Terminus and Depot lakhs sft. for Passenger Amenities and office space. 7.5 lakhs sft. is for parking facility four wheeler and 2800 two wheeler parking. Expected income from these 10 projects is Rs. 33 Crore per year. IRR for these TTMCs varies from 12% to 26%. BMTC has identified 35 more Traffic & Transit Management Centers (TTMCs) in and around Bangalore city. These will be developed through PPP.
12 Chartered/Dedicated Premium Pass Service BMTC is providing buses on chartered services on kilometre basis to companies/factories, schools and colleges. To minimize loss of revenue due to clandestine operation by private operators, Dedicated premium passes services was introduced for the Industrial / Company workers during the year 1998 with TWO buses. At present 572 trips are operated with 285 buses to Schools & Colleges and 1106 trips are operated with 504 buses to companies/factories. 308 number of buses operated to companies on Dedicated pass basis. Realizing average revenue of Rs.8.97Cr per month. Revenue from Chartered/Dedicated Premium Pass Service Year Chartered Service Annual Revenue (Crore) Dedicated Pass Service Total (Est.) (up to Oct )
13 Growth of Revenue from Chartered/Dedicated Premium Pass Service City(STUs) Population No. of buses Buses/Million (Millions) in STUs Population ( )* (Dec-10) Bangalore(BMTC) Chennai(MTC) Delhi(DTC) Mumbai(BEST) *source: and CIRT, Pune (Target 1000 buses per one million population in cities) Compared to other Metros, the ratio of buses to population is much higher in Bangalore. Do we need these many buses. Is bus network of BMTC is efficient.
14 Moving from the existing Destination Services model to an Integrated Services model (Direction Oriented model) Hosur Road Corridor Improvement Plan Existing Destination Services Model Bus services in Bangalore are based on the Direct Services model. Each locality is directly connected to destinations in the city centre with a dedicated route. Such system leads to inefficiency. As city expands and number of destinations increases, the number of routes increases exponentially. It results in a large degree of route redundancy. Long wait times on specific routes. High number of routes increases system complexity for users. Inability to match demand precisely to supply.
15 Route Rationalisation Tannery Road Tumkur Road Bellary Road Hennur Road Old Madras Road Magadi Road Old Airport Road Mysore Road Sarjapur Road Kanakpura Road Banerghatta Road Hosur Road
16 Pilot Project Hosur Road Corridor Existing Services: From City Centre to Electronics City and Beyond 63 Routes 262 Buses KBS SBS Brigade Road KR Market Silk Board Trunk Services Electronics City 6 Proposed Trunk Routes. It will serve the same travel patterns as 15 Routes in the Existing Service. Attibele
17 Feeder Services Feeder Network
18 Improving Simplicity of Routes Existing Proposed Trunk Service 15 Big Trunk 6 Direct Service 48 Big Connect 3 Feeder Services 21 TOTAL % reduction in number of routes while maintaining same service coverage Fleet Requirement Existing proposed Trunk Service 167 Big Trunk 187 Direct Service 95 Big Connect 35 Feeder Services 40 TOTAL
19 Wait Time (In Minutes) TRUNK Existing 0 Proposed 3 FEEDER TOTAL % reduction in wait time for feeder service Trunk Buses
20 Feeder Buses Midi Buses Same height and Width as normal Bus HP Engine Seater 9.5 Meter Length Procurement Based on Life Cycle Cost At present the procurement of buses and other major items are done through the process based on e-tendering where the successful bidder is decided based on the lowest quoted rate. It is quite possible that a particular brand of bus has costed less initially but in the long run it consumes more diesel and other consumables like Engine oil, Gear Box oil, Fuel Filter, resulting in higher overall cost in the life cycle. This situation is practically happening in the present system. To avoid this kind of situation and from the point of view of having low cost in terms of life cycle, tender based on life cycle costing has been started in BMTC for two items namely bus chasis and tyres.
21 Procurement Based on Life Cycle Cost for Buses The Tenderers have to furnish complete data regarding, Changing period in Kms for: Engine Oil. Gear Box Oil. Rear Axle Oil. Coolant. Power steering. Fuel filter cum water separator. Fuel strainer. Projected life of the O.E. engine in Kms. Projected life of the O.E. Gear Box in Kms. Projected mileage of HSD in KMPL. Procurement Based on Life Cycle Cost for Buses Contd.. Life Cycle cost is based on consumption of Major Lubricants, Fuel line aggregates, O.E. Engine life & mileage of HSD (KMPL) for a running of 7.5 Lakhs Kms. Subsequent deductions will be made towards shortfall in guaranteed performance. Considering the data submitted by the Tenderers, cost on Major Lubricants, Fuel Line Aggregates, OE Engine and performance of HSD KMPL of the respective type of Chassis of the Tenderer will be evaluated. The total cost arrived for all the items indicated for life spanwill be added to the quoted rate by the bidder. The resulted cost will be the basis for deciding the L-1.
22 Procurement Based on Life Cycle Cost for Tyre Tyre Brand Average New Life Retreading Factor Life after Retreading Total Life Brand Brand Brand Brand Brand Brand Brand Procurement Based on Life Cycle Cost for Tyre Contd.. Life Cycle cost is based on life of new tyre, life of tyre after retreading and number of times retreading is possible (Retreading Factor). These figures are calculated based on the historical performance of different brand tyres in KSRTC and BMTC together. A = TOTAL COST = NEW TYRE COST + (RETREAD COST x NO. OF RETREADS). B = TOTAL MILEAGE = INTIAL TREAD MILEAGE + (RETREAD MILEAGE OF No. of processes). Cost per Km running = (A)/(B) L1 is decided based on least cost per Km running.
23 Commuter Friendly Initiative BMTC New website mybmtc.com Mobile version
24 Geo-coded Bus stops Sheltered bus stop Non- Sheltered bus stop 47 Trip Planner
25 Route Map : Printable Route Timings : Printable
26 List of Bus stops : Printable Branding of Services BIG-10 Services: Introduced BIG10 services, which are operated on all the 12 major traffic corridors of the city that connect it with the surrounding sub-urban areas. BIG-Circle Services: Bus services on the ring road. K Series Services: For long distance travel from one corner of city to another corner. Atal Sarige: Specially designed bus provided to cater to the needs of Economically backward commuters of Bangalore city at 50% concessional rates of ordinary buses. Vayu Vajra Services: A/C Buses for airport from different part of city. Vajra Services: A/C Buses for different part of the city.
27 High End Buses Maintenance Practices Adaptive maintenance Modification in the buses to cope with changes in requirement. Corrective maintenance Daily Maintenance. Alternate day maintenance. Preventative maintenance 10 day maintenance. Docking maintenance. Docking-01 After covering kms. Docking-02 After covering kms. Docking-03 After covering kms. Docking-04 After covering kms. Perfective maintenance Annual Fitness Maintenance.
28 Streamlining the Process of Fitness Certificate Reducing the variation in the availability of vehicle is extremely important. It needs rigorous regime of vehicle maintenance. Earlier the vehicles were send for fitness certificate at workshop by Depot as per its convenience resulting in huge fluctuation in number of vehicles coming for fitness certificate to the workshop. Now an annual calendar has been finalised keeping in view the streamlining the process for all the depots. A very comprehensive annual plan. All depots have to follow this calendar. Streamlining the Process of Fitness Certificate
29 On-going Initiatives ITS : Intelligent Transport System Vehicle Tracking System & 2 Way Communication 6500 Operations Monitoring Incident Management Real Time ETA/D Electronic Ticketing Machines Revenue Monitoring & Management Ticket and Smart Card Passenger Information System 35 Revenue Monitoring & Management Applications Data & Command Control Centre 1 Monitoring & Reporting Communication Call Centre Depot Management System 1 Crew Management Vehicle Management Scheduling
30 Takes Care the Concerns of : Commuter. Which bus should I take to reach my destination? What is the bus route between my origin & destination? When should I reach the bus stop to take my bus? Management. Revenue earned, Targets Met & Exceptions Reported. Duty/Depot management, Scheduling, Fleet Usage, Crew Appraisal. Operations Manager. Is any of the bus over-speeding? Has there been any accident? Are there any breakdowns/ Idling/ Bunching? Crew Control Centre Support for incident management. Easy reconciliation and end of duty process. Vehicle Tracking System Location, Time & Speed Monitoring. Based on above Driver Appraisal Card. Incident management through two way communication system. Tracking on GIS 1:2500 scale. Various graphical, tabular and spatial reports on important parameters. Alerts on exceptions (reporting) missing targets.
31 Smart Card Fare Collection System Mobile Application Mobile Application for ios, Android and Windows 8
32 Find Nearby Bus Stops The user can use the app to find nearby bus stops using integrated Google Maps with Geo-location of the user. The bus stops will be marked with icons as as a overlay on the map. User can also search for nearby bus stops by keying in the area or the address. Installation of Passenger information KIOSK at ten Major Bus stations. The web based information is displayed in these KIOSK. More useful for new passengers who want to use public transport and old passengers as well.
33 Other Applications CCTV with live monitoring at all major bus stations In Bus Camera with Recording Free Wi-Fi in A/C Buses Leave Management System. Training Information System. Human Resource Management. MIS Estate & Land Information System ( EIS ) Inventory Management System File Management System ( FMS ) Challenges and Way Forward
34 Distance Travelled by BMTC Buses in an hour Fuel Efficiency
35 Bus Cost Difference of Cost Type of Bus Average Cost (in Lakhs) with BS-IV (In Lakhs) BS-II BS-III BS-IV These technological changes has happened mainly because of stringent emission norms, substantially adding to the cost of operation. However STUs have not received any support from Government to compensate these additional costs due to environmental norms. STUs are not even allowed to take this component in the tariff fixation. It is resulting in reducing the margin of operation drastically for BMTC. Low Earning Schedules Sl. No Service No of Schs No of schedules EPKM less than Rs % of schs No of schedules EPKM less than Rs.30 % of schedules 1 General Shift Night Out Double Day Shift Night Shift TOTAL
36 Area of Higher Focus Complete shifting to direction oriented service. Integration with Metro. Enhancing women safety. Introducing Semi Low Floor buses in Non/AC sector. Workshop automation. Moving towards mixed fleet. Robust passenger information system. Modernisation of call centre. Route rationalisation. Introduction of vehicles based on alternate fuel. Further unlocking the land potential. Shifting from Capex to EMI/Annuity based projects. Not only be best in the country but bringing the service to international level
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