Wednesday, October 28, 2009

A Hit in the middle- How to reward inefficiency and lawlessness

Yet again, government has proved why the things in India are what they are, because here whistleblowers are damned, what is being rewarded is inefficiency and lawlessness. And Delhiities are hit in the middle, middle of their legs.

If punches and kicks of 11% inflation and 100% food inflation was not enough, and if withdrawal of power subsidy hasn’t broken their backs, then this surely will, a lean and clean jolt between the legs which might leave them gasping for breath. DTC has increased its fare by close to percent, thereby traveling by CNG car cheaper than ferrying a bus. Invariably, the private operators like the ‘deadly’ Blueline services in Delhi will also increase its prices. At one shot, government has rewarded the inefficiency of the state owned Delhi Transport Corporation (DTC) and lawlessness of Blueline operators (an organization which left more than 94 Delhiities dead in the road last year).

The Inefficient Giant

DTC is the largest single transport company of Delhi. It is a giant and an inefficient one for sure. For years it was going under losses, and heavy losses. This was the time when Government thought of giving private operators a chance, sometimes in 1993, and what a chance that was. Sooner most the buses of the DTC were locked up in the depots, and keys were forgotten. A respite came when a Supreme Court order of making public transport in Delhi to be run on CNG lead to a strike amongst the private operators. This is where government and DTC stepped in to revive the Public Sector Enterprise. The private buses were taken over by DTC on a contract from their owners and ran by the DTC. Meanwhile new buses were ordered, fresh dreams were woven, till the government rescinded the contracts and DTC were to run its own buses.

However much of the things remained under the cover. DTC kept operating, new low floor buses and A/C buses were ordered and they began operation. All seemed well to end Delhi’s transport woes, woes developed from the city’s obsession with cars, until last day when the government declared the hike, a reward for the inefficient company a hit in the middle of the consumers.

When DTC came into what it is in 1972, it initiated a Student Concessionary Pass program for Rs. 12.50 (per month or per 3 months I don’t remember, I’ve last used them in 2002 the year contracts were rescinded), it remained unchanged till now, when it is being increased to Rs. 100, a welcome move but which should be bought in much earlier. Wasn’t DTC making loss with Rs. 12.50 pass earlier, or it was just a tool to appease student voters so that they kept voting the government to the power. And when water of losses crossed the limits, students are hit in the middle. It is just one instances of inefficiency of the giant. And piling up of these has lead to such situation.

The Lawless Operator

A chance was grabbed with both hands, chance was the Delhi’s population, and the grabbers make it sure that it is squeezed, squished, smashed, short changed and looted. The grabbers were the Red line operators, aptly named dead-lines, who kept their murderous streak for few years on Delhi road, before some sanity prevailed in the government (out of fear of election backlash off course) and they were replaced. But replacement proved equally deadly, the Blue Line services are never known to obey any kind of transport rules. The honk, they overfill, they speed, they break traffic rules, they ran bribing ring, and the list is endless. Last year not a day was passed without an incident involving these buses, more than 94 people were killed by them, few of them ever dragged for a mile. Most of the drivers don’t seem to have a valid license until last year when a drive was launch to persecute the erring drivers. But still even today their rudeness rules the roads of Delhi. And with this rise, it is only tend to rise, because they will raise the tickets prices anyway, they have an habit of adopting bad practices and ignoring good practices.

But the question is what keeps them going? Even with the large amount of accidents involving them, why the conviction is so low. The foremost and predominant reason is that they are being controlled by kin of the politicians or the politicians themselves or under various aliases. The politicians enjoy an unwritten immunity in our ‘democratic’ country; a special power available not even to Army Generals. And they know, given our arthritic judiciary, that they will surely get their way, and things go on as usual unless another one is dragged for a mile. Is it for this dragging that we have to pay more: more just to relieve ourselves that worth of a life is not one or two rupees it is more than that.

Question of Green and Public Transport

Delhiities love their cars, no wonder why over third of cars sold in the country are gobbled up by Delhiities. Not only they purchase the cars, they also want to show off, that is why most of the time there is bumper-to-bumper traffic in Delhi. Just imagine how many gallons of fuel are burned to sustain them. That is what makes the question of public transport more relevant.

Delhi is said to have the finest infrastructure of any metros in India. However, even this finest is not good enough. On a peak hour, one can easily find traffic moving in snail’s pace in most of the parts of Delhi. Even, touted as one of the best highways in the country, the Delhi-Gurgaon Highway sees python-like traffic jams. With the massive pressure of the population, the infrastructure in Delhi is crumbling like a cookie, taking the environment along with it.

“We have all along been saying that personal vehicle s shouldn’t be incentivized at the cost of public transport. We have done a survey and found out that the cost of riding a motorcycle comes to Rs. 1 per km. If the government increases the fare of buses to recover the cost of investment they are making in the buses, people with the means to buy a motorcycle would surely be weaned away from the public transport……In 2001, buses in the Capital accounted for 60 percent of total daily travelers. This has now come down just to 43 percent” observes Anumita Roychowdhury of Centre for Science and Environment. And rightly so, If number private vehicles increases in the streets, it will put the pressure in the infrastructure, it would increase the demand for oil. Increase in demand leads to increase in price of the commodity that is simple economics. This in turn will lead to the further increase in the cost of transport (both public and private). Increased use of oil will lead to increased pollution. It is just the plain old vicious cycle.

The Commercial Sense

The commercial reason provided for this increase is the one that will send experienced managers into a tizzy. Such increase is done in order to build new fleet of buses; it is the reason which is being provided by the government. Hardly digestible, no it isn’t, certainly nowhere in the business world you would see the investment is directly being linked to the revenue. Investment decisions are taken taking in consideration the current revenue and future revenue trends. And revenue decisions are accordingly taken taking into consideration the expenditure incurred, the investment to be made and most importantly in this case, the working capital. Above all these, a company have to be sure that it makes adequate profits and revenue streams must be kept running with adequate price for the service sold. But here increase is for the investment, hardly a reason as investment is done also by raising resources externally. But that requires efficient use of resources. Again it is hardly a DTC’s bailiwick.

“The hike is unwarranted. By increasing the fare, the government has rewarded the Blueline operators and inefficient DTC. The DTC has demanded higher fares on the basis of the fact that they are building a new fleet of low-floor buses. But these buses account for only 10 percent of the total bus fleet of DTC. The hike is also not going to improve the efficiency and reliability of DTC” says S.P. Singh, a senior fellow at Indian Foundation of Transport Research. He is quite right in pointing out that whether such increase will lead to more reliability and efficiency.


In the times where there is unprecedented rise prices was not giving enough fight to the people, the times where arbitrary power supplier was not giving hell to the Delhiities with inflated bill and erratic power, it was the last thing require to get the ‘common man’ (aam admi) down, kick in the middle.

A decision only to reward inefficiency and lawlessness.

© Tarun Mitra


Mridula said...

Tarun I agree with much you have said but insn't it mind boggling that the prices were unchanged since 1972. It would be difficult to come across such an example of pricing anywhere else.

Tarun Mitra said...

That is exactly my point Mridula, it is nothing but a sign of inefficiency and political interference. I think you must be aware of Student politics of DU and Anti-Mandal Agitation in late 90s, there must be something to soothe the angry young minds. Even now, DUSU pressurizes to keep such ridiculous policy even when the members of DUSU spend lacs in booze during elections.
When I first made this pass ( I was in high school then, year 2001) my father and uncle were surprised, because he paid the same amount for years.