Delhi govt to invite competitive bids for private bus services

Delhi govt to invite competitive bids for private bus services
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First Published: Thu, Aug 30 2007. 12 41 AM IST
Updated: Thu, Aug 30 2007. 12 41 AM IST
New Delhi: Blueline buses that have been responsible for more than 70 deaths this year could soon be off Delhi’s roads. The state government plans a competitive bidding process for companies and cooperatives with a fleet of more than 100 buses.
The winning bidders will own the buses, operate the service, and maintain the buses. Currently, Delhi has more than 3,000 Blueline buses that are run widely by individual private operators on the basis of simple permit given by the local government.
“We are in the process of finalizing a new scheme where only large operators with a fleet size of more than 100 buses will ply as private operators. Players such as Ashok Leyland and Tata Motors have evinced keenness to participate in their expression of interest,” said a senior officer in the transport department of Delhi government. Requesting that he not be identified, the officer added that the nuances of the scheme will be finalized in two months.
A spokesperson for Ashok Leyland said the company was interested in bidding for the bus service. “We are the largest player in the metro bus business and we looking for opportunities for even better presence in this segment.”
The Delhi government official said that companies supplying the buses could form consortia with other companies with experience in operating and maintaining bus services. Everything from training drivers to managing the service would be “done by the company or co-operatives selected by the transport department,” he added.
The existing Blueline service is expected to complement the service provided by the state-run Delhi Transport Corporation (DTC). The two services, however, end up competing with each other.
Aiming to increase their daily revenues, Blueline buses resort to overspeeding and overtaking. While DTC acquires buses on the basis of global tenders and appoints staff such as drivers, conductors and mechanics through a proper selection procedure by a selection board (there are more than 27,800 such staff), private operators who run the Blueline service make their own rules.
Meanwhile, the Competition Commission of India (CCI), an entity that checks anti-competitive practices, has also written to the Delhi government suggesting that there is a need to reform the passenger road transportation sector. A recent study commissioned by CCI and conducted by the National Council For Applied Economic Research (NCAER) across seven states (which does not include Delhi) recommended a system of competitive tendering for selecting private operators for commercial routes.
“CCI feels that while the government can retain regulatory policy control over the services, the competitive market would produce the services. Competitive tendering is used worldwide for public transport,” said Vinod Dhall, acting chairman, CCI.
Transport experts say that the success of the scheme will depend on several other factors. “Just getting in big players will not be enough. The scheme would work depending on how well the contract is formulated, executed and regulated. Besides the risk to the concessionaire has to be minimised otherwise the bid would become expensive,” said Dinesh Mohan, professor at the Indian Institute of Technology (IIT), Delhi and an expert in urban transport.
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First Published: Thu, Aug 30 2007. 12 41 AM IST