The Hindu Business Line : State road transport units may be strengthened

New Delhi, Dec. 10 More powers to the State Road Transport Corporations with regard to their operations could be on anvil with the Road Transport Ministry working on a proposal to revamp the ailing bodies.

The powers that may be passed on to the State-level bodies include decisions on new routes, categories to whom concessions should be extended, steps to enable the units to access market borrowings, and linking tariffs revisions to input costs.

The Department of Road Transport and Highways has constituted a committee to review Road Transport Corporation Act, 1950. The committee, headed by Mr A.L. Aggarwal, former Professor, IIT Delhi, would now be taking comments from stakeholders including public and employees of the undertakings.

Several of the current rules and regulations need to revised, according to official sources. For instance, the present rules stipulate that States need the Centre’s sanction in order to ply buses on new routes. “This should be delegated to the States,” said sources.

Also, there is a need to devise a method so that fare revision is linked to the input costs. Since State Governments have the power to revise fares, this becomes a political issue and there are several State transport units that have had no fare revision for last five-seven years. On an average, expenditure on fuel and lubricants account for about 36 per cent of total costs of the transport units, while spares account for almost five per cent. And during the first quarter, 2006-07 fiscal, the fuel costs went up by about 18 per cent on an annual basis, according to the latest data of the Ministry’s Transport Research Wing.

The transport units require funds to replace and upgrade their fleet, but are unable to access the market for loans and borrowings given their financial health and lack of guarantees from the State Governments. For Delhi Transport Corporation, interest costs accounted for a whopping 42 per cent of total costs in Q1, 2006-07. Till 1994, the Planning Commission used to extend capital contribution for fleet replacement to these bodies, which has now been stopped.

Another issue that dents the earnings of these bodies is concessions extended to various categories of passengers. The transport units are required to extend concessions to as many as 32 categories of passengers and there is no corresponding subsidy from the Government.