managing volatile cost structure through …managing volatile cost structure through adaptive...
TRANSCRIPT
PRESENTATION ON
MANAGING VOLATILE COST STRUCTURE
THROUGH ADAPTIVE BUSINESS MODEL
BMTC INITIATIVES
By
Anjum Parwez, IAS
Managing Director
BMTC , Bangalore23rd August 2013
• On 1.10.1957, it was Merged in to Mysore Government Road Transport Department.
• Became an operating Division of Mysore State Road Transport Corporation on 1st August 1961, as BTS.
• Formed as an independent Transport Corporation on 15th
August 1997
• It was first public transport company in the princely state of Mysore, established on 31st
Jan 1940 as Bangalore Transport Company.
Daily Service KM
Total Growth: 46%Annual Growth Rate: 7.97%
Bus FleetTotal Growth: 86%
Annual Growth Rate: 8.05%
Since 2004 –
Overall Increase: 64.7%
Annual Rate of Growth: 6.4%
132941309313040136571383214356
15615
1775919019
20565
25542
27644
30996
3295332297
34278
12000
16000
20000
24000
28000
32000
36000
'97-98
'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
Staff Strength
� Own 6587 Buses
� Operate 6441 Bus Schedules
� Perform 13.50 Lakh Service Kms.
� Make 83327 Bus Trips
� Earn Rs 5.00 Crore
� Carry 49 Lakh Passengers
� Bus Depots 39
� Bus Stations 50
� Manpower 35090
� Bus Staff Ratio 5.2
As on August 2013
Expenditure Component for the year 2012-13
Growth of Cost Component (In Crore)
Cost of Capital
Date Price Date Price
25-05-2011 45.36 01-04-2013 52.99
01-07-2011 45.36 17-04-2013 53.07
04-01-2012 44.88 11-05-2013 54.18
25-07-2012 44.12 01-06-2013 54.80
14-09-2012 50.25 01-07-2013 54.77
01-01-2013 50.36 01-08-2013 55.46
21-01-2013 52.06 01-09-2013 56.07
16-02-2013 52.62 01-10-2013 57.06
23-03-2013 53.17 01-11-2013 57.67
Increase in Diesel Prices (In Rs.)
• In a span of two years diesel prices has increased by 30.70%
• It is increasing almost every month
Period Staff Cost
Jan-Mar 2011 123.85
Apr-June 2011 124.48
Jul-Sept 2011 131.28
Oct-Dec 2011 148.99
Jan-Mar 2012 146.64
Apr-June 2012 149.17
Jul-Sept 2012 164.73
Oct-Dec 2012 193.28
Jan-Mar 2013 198.03
Apr-June 2013 200.39
Jul-Sept 2013 206.85
Increase in Staff Cost (In Crore)
• In a span of two years staff cost has increased by 59.10%
-74.43
-36.44-12.02
14.67
94.81
172.07
261.13
460.12
560.02587.55
625.21
675.56 663.04
515.09
-200
-100
0
100
200
300
400
500
600
700
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Accumulated Loss / ProfitRs. Crore
2000-011999-00 2001-02
• 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.
Passenger Fare Revision Policy
Date Fare Revision (Percentage)Cumulative Increase
(Percentage)
26.06.2010 8.65 8.65
26.06.2011 7 16.25
01.10.2012 10.1 27.99
16.06.2013 14 45.9
Year EPKMIncrease
(Percentage)Cumulative Increase
(Percentage)
2010-11 26.44 - -
2011-12 29.77 12.59 12.592012-13 32.68 9.77 23.592013-14 36.22 10.83 36.97
Fare Revision
Earning Per Km (EPKM) Growth
Travel Expenditure for the journey from KBS to Kadugodi for Various Modes of Transport
Sl.NoMode of
TransportType
Distance in KMs
AmountWear
& TearTotal
AmountAmount per KM
Amt per person per KM
1 BMTC BUSVolvo 28.1 90 90 3.20 3.20
Ordinary 28.1 22 22 0.78 0.78
2Personal
Vehicle (Two Wheeler)
Bike 28.1 50 15 65 2.31 1.16
Scooter 28.1 63 15 78 2.78 1.39
3 Personal CarPetrol Car 28.1 160 30 190 6.76 1.69
Diesel Car 28.1 115 30 145 5.16 1.29
4 Private TaxiSmall 28.1 600 600 21.35 7.12
Sedan 28.1 900 900 32.03 10.7
Note: 1. Diesel Rate @ Rs.57.08 KMPL for Diesel Car: 15 KMPL for Scooter: 35
2. Petrol Rate @ Rs.79.35 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
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 fi rst-mile connectivity through provision of park and ride facilities.
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 facilitiesBefore After
• Expenditure on these 10 TTMC is Rs. 425 Crore.
• Total built up area - 32.0 lakhs Sqft.
• Out of which 6.2 lakhs sft. is for Bus Terminus and Depot.
• 18.3 lakhs sft. for Passenger Amenities and office space.
• 7.5 lakhs sft. is for parking facility.
• 3715 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.
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.
Year
Annual Revenue (Crore)
Chartered ServiceDedicated Pass
ServiceTotal
2005 14.528 13.042 27.57
2006 19.521 14.338 33.859
2007 26.738 12.325 39.063
2008 39.119 08.884 48.003
2009 38.483 07.878 46.361
2010 39.453 8.022 47.475
2011 42.337 14.891 57.228
2012 46.086 32.351 78.437
2013 (Est.) 58.510 39.478 97.988
2013 (up to Oct ) 34.131 23.029 57.16
Revenue from Chartered/Dedicated Premium Pass
Service
Growth of Revenue from Chartered/Dedicated Premium Pass Service
City(STUs) Population No. of buses Buses/Million (Millions) in STUs Population (1-3-2001)* (Dec-10)
Bangalore(BMTC) 5.69 6119 1075
Chennai(MTC) 6.42 3421 533
Delhi(DTC) 12.79 5899 461
Mumbai(BEST) 16.37 4698 287
*source: www.citypopulation.de 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.
Hosur Road Corridor Improvement Plan
Moving from the existing
‘Destination Services’ model
to an
‘Integrated Services’ model
(Direction Oriented model)
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.
Route Rationalisation
Old
Airport
Road
Sarjapur
Road
Hosur
RoadBanerghatta
Road
Kanakpura
Road
Old
Madras
Road
Mysore
Road
Magadi
Road
Tumkur
Road
Bellary Road
Tannery Road
Hennur Road
Pilot ProjectHosur Road Corridor
Existing Services:
From City Centre to
Electronics City and
Beyond
63 Routes
262 Buses
KR
Market
KBSBrigade Road
Trunk Services
Electronics
City
Attibele
Silk
Boa
rd
SBS
6 Proposed Trunk Routes.
It will serve the same travel patterns as 15
Routes in the Existing Service.
Feeder Services
Feeder Network
Improving Simplicity of Routes
Existing Proposed
Trunk Service
Direct Service
TOTAL
Big Trunk 6
Big Connect 3
Feeder Services 21
30
15
48
63
52.4% reduction in number of routes while maintaining same service coverage
Fleet Requirement
Existing proposed
Trunk Service
Direct Service
TOTAL
Big Trunk 187
Big Connect 35
Feeder Services 40
262
167
95
262
Existing Proposed
TRUNK
FEEDER
TOTAL
0
120
120
3
36
39
67.5% reduction in wait time for feeder service
Wait Time (In Minutes)
Trunk Buses
Feeder Buses
Midi BusesSame height and Width as normal Bus
120-130 HP Engine
28-36 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.
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 span will be
added to the quoted rate by the bidder. The resulted cost will be
the basis for deciding the L-1.
Tyre BrandAverage New
Life
Retreading
Factor
Life after
RetreadingTotal Life
Brand 1 44142 3.71 22267 123262
Brand 2 35582 3.5 19159 101057
Brand 3 44929 4.01 23427 136266
Brand 4 85427 2.14 33401 148323
Brand 5 39323 4.67 22786 144623
Brand 6 106358 1.97 55195 192244
Brand 7 57500 4 23143 150072
Procurement Based on Life Cycle Cost for Tyre
• 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.
Procurement Based on Life Cycle Cost for Tyre Contd…..
BMTC New website “mybmtc.com”
Commuter Friendly Initiative
Mobile version
Geo-coded Bus stops
47Non- Sheltered bus stopSheltered bus stop
Trip Planner
Route Map : Printable
Route Timings : Printable
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.
High End Buses
• 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 20000 kms.
• Docking-02 After covering 40000 kms.
• Docking-03 After covering 60000 kms.
• Docking-04 After covering 80000 kms.
• Perfective maintenance
• Annual Fitness Maintenance.
Maintenance Practices
• 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
Streamlining the Process of Fitness Certificate
On-going Initiatives
ITS : Intelligent Transport System
Vehicle Tracking System & 2 Way
Communication
• Operations Monitoring
• Incident Management
• Real Time ETA/D
Electronic Ticketing Machines • Revenue Monitoring & Management
• Ticket and Smart Card
Passenger
Information System
• Revenue Monitoring & Management
• Applications
6500
10000
35
Data & Command Control Centre
• Monitoring & Reporting
• Communication
• Call Centre
1
Depot Management System
• Crew Management
• Vehicle Management
• Scheduling
1
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 maps @ 1:2500 scale.
• Various graphical, tabular and spatial
reports on important parameters.
• Alerts on exceptions (reporting) – missing
targets.
Smart Card Fare Collection System
Mobile Application
Mobile Application for iOS, Android and Windows 8
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.
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 )
Other Applications
Challenges and Way
Forward
Distance Travelled by BMTC Buses in an hour
Fuel Efficiency
Type of Bus Average Cost (in Lakhs)
Difference of Cost
with BS-IV (In
Lakhs)
BS-II 22.75 6
BS-III 24.25 4.5
BS-IV 28.75
Bus Cost
• 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.
Sl. No ServiceNo of Schs
No of schedules
EPKM less than Rs 25.00
% of schs
No of schedules
EPKM less than
Rs.30
% of schedules
1 General Shift 1695 115 6.78 593 34.98
2 Night Out 2884 330 11.44 1564 54.23
3Double Day
Shift1349 41 3.03 388 28.76
4 Night Shift 51 13 25.49 40 78.43
TOTAL 5979 499 2585
Low Earning Schedules
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