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Updated: December 9, 2011 09:24 IST

BMTC profits going in reverse gear

Anil Kumar Sastry
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The Hindu

Operational losses on the rise since 2008-09 despite periodic fare hikes

While the Government has been painting a rosy picture about the performance of Bangalore Metropolitan Transport Corporation, BMTC appears to be becoming financially weaker every passing year.

The performance of the corporation, which had been posting impressive profits till 2007-08, appears to have taken a beating since 2008-09, from which point of time profit margins have declined.

BMTC had posted Rs. 114 crore profit in 2005-06, Rs. 224 crore in 2006-07 and Rs. 140 crore in 2007-08. However, the profits plummeted thereafter — Rs. 55 crore in 2008-09, Rs. 65 crore in 2009-10 and Rs. 50 crore in 2010-11. (The profit of Rs. 224 cr. in 2006-07 was mainly due to the Government reimbursing subsidy of Rs. 109 cr. that was due for two years.)

Operational losses

The fall in profit margins is mainly due to operational losses despite periodic fare hikes. From 2008-09, BMTC began suffering operational losses (Rs. 22 cr.), which only kept increasing every year — Rs. 35.66 cr. in 2009-10 and Rs. 38.8 cr. in 2010-11.

There was also reduction in receipts under the head ‘other commercial revenue' advertisement revenue, rent from properties, income from sale of scrap buses, and others from 2009-10. While BMTC had received Rs. 70.4 cr., Rs. 86 cr. and Rs. 93 cr. under this head during 2006-07, 2007-08 and 2008-09 respectively, in subsequent years the revenue decreased to Rs. 77 cr. and Rs. 60 cr. during 2009-10 and 2010-11 respectively.

Not only that, induction of new buses too took a beating in 2010-11 with BMTC buying just 58, as against 794 buses inducted in 2006-07, 623 buses in 2007-08, 949 buses in 2008-09 and 1,218 buses in 2009-10. Most of new buses added during 2008-10 were funded through Jawharlal Nehru National Urban Renewal Mission (JNNURM).

With old buses fit to be scrapped continuing to ply on the roads, the utility's KMPL (mileage) came down to 3.97 a litre in 2011 as against 4.55 in 2007.

High maintenance

BMTC Managing Director K.R. Srinivasa attributed increased cost of operation to non-induction of new buses and the resultant rise in the cost of maintenance and breakdowns, and decreased mileage. Also, old buses could not be scrapped to sustain increased demand for transportation. He hoped that with new buses entering the BMTC fleet from October 2011, the cost of operation would decrease. Another senior official said non-scrapping of old buses contributed to the reduction in ‘other revenue' over the last two years.

Euro IV compliance

BMTC management cited the Central Government stipulation that only Euro IV compliant vehicles should be registered in major metros (including Bangalore) from April 2010, as the reason for non-induction of new buses during 2010-11. Euro IV compliant buses were not available till October this year, Mr. Srinivasa said.

However, Transport Department sources revealed the department was prepared to register BMTC buses in regional transport offices outside Bangalore city jurisdiction and allow their operation on the periphery, including on outer ring roads. BMTC, however, did not utilise this gesture for reasons best known to it.

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