The Kerala State Road Transport Corporation (KSRTC) has a long and illustrious history that precedes even the state of Kerala or India. It starts in 1937 when the Travancore State Transport Department was constituted by HH Sree Chithira Thirunal Balarama Varma, the Maharaja of Travancore. The first buses were imported from England. Post independence the TSTD was incorporated as an autonomous corporation on March 15, 1965 under the name Kerala State Road Transport Corporation, while the bigger and more famous KSRTC, the Karnataka State Road Transport Corporation already established in 1961. However, here is where the similarities between the two corporations end. The Kerala KSRTC (KeSRTC) is today a wheezing, bleeding, soaking in losses, gasping for air basketcase with around Rs.90 Crore losses every month and cumulative losses of more than 500 crores, the Air India of the roads, while the Karnataka KSRTC (KaSRTC) is a shining example of great management and business sense by a government corporation, one in only three SRTCs in India to be in a profit (64 crores). And now things have come to a head with the Kerala High Court asking the government why not shut down KSRTC altogether if it continues to drain state coffers like this.
Thanks to its financial debacles, KSRTC has been providing a constant and never ending stream of controversy ever since the corporation sunk to its present state around the beginnings of the 1990s. The reasons for why KSRTC is in such loss are many, all of which are well known: politicians meddling in its running, mountains of freebies and concessions, pension payouts, sometimes lethargic staff, corrupt, unqualified and indifferent management, huge lack of visionary political will thanks to vested interests and mind-numbing inefficiency in running services, all very typical of Kerala. KSRTC is good at jugaad: painting over dented surfaces, hammering metal strips over body gaps and hold cracked windshields in place using clamps etc., and has been using the same strategy to survive its crises: ask the government for bailouts and live hand-to-mouth off the earnings brought in by its super-class services while bleeding everywhere else. Kerala’s politicians however, are least bothered about all this. However, it now has come to a stage where none of this will work anymore, and serious steps have to be taken to stem the rot. We have to save our KSRTC! Like any sick business, the strategy to save KSRTC has to be twofold and very simple. Cut costs and increase revenue. If KSRTC is well known and good at anything, it is for its speed and highly aggressive driving style, for which it has equal number of fans and detractors. The Superfasts are especially notorious in this regard.
The Great Pension Question
KSRTC loses the most money not on its buses but on payment of pension to its employees. When it comes to cut-and-dry finances, it is the blinking red light of warning on its balance sheet and is the actual drain on the company. It is also the elephant in the elephant vehicle’s (ആനവണ്ടി) room which no one wants to talk about. KSRTC is the only SRTC in the country which pays its employees pension at par with any other government department. This started in 1984 and KSRTC was in loss some years later, from where it never recovered. KSRTC’s expenditure on pensions is around Rs.40 Crore per month and Rs.480 crore per year or 17% of all expenditure and more than 60% of its deficit today. Factoring in how pensions have to be handled constitutes the cornerstone on reviving KSRTC. No, stopping pensions is not an option but stupidity. The KSRTC Revival Package addresses this as the most important factor on how to save the corporation. Here are the points discussed there.
- Employees joining after March 31 2013 will join the New (contributory) Pension Scheme of the Government of Kerala.
- For existing employees, KSRTC will set up a Pension Trust Fund with LIC to service pensions
- The government will provide a seeding corpus fund of Rs.500 crores to the trust
- Thereon every year the government and LIC will make a fixed contribution to the fund (~Rs.240 Crore each)
- The pension trust fund will pay employees the pension from a fixed date in the future
- KSRTC is already relieved from paying pension to its new employees and in around 10 years it will be completely relieved from paying pensions at all.
If this is hopefully implemented as mentioned, it would singlehandedly save KSRTC from its greatest financial burden.
Restructuring the Corporation
KSRTC cannot operate in the way it had been over the past 60 odd years anymore. The “single behemoth corporation” model is one of the past in this fast age of mobility, agility and micro-management. KSRTC should be ruthlessly corporatized in line with the modern corporation if it has to survive. Being a public corporation it is still fine if it does not function for-profit, but some profit does not hurt, which of course should immediately be pushed back should do is to split the corporation into atleast three separate corporations or even better into companies (as the HC suggested) with their own CEOs and boards. The first (KSRTC) should take care of its core business, long-distance services, the second to run City and short distance services and the third for non-core operations like infrastructure, parcel and cargo, body building and maintenance, land holdings management etc., so that each can focus on different core operations. The present “all for one, one for all” model might hold good for nostalgia but only encourages inefficiency. However, expect violent opposition from the leftists and unions on this move.
The City/Ordinary Short Distance Service Business
KSRTC is known and loved for its epic long-distance services, the legendary Superfast and Super Express blitzkriegs. On the other hand, its ordinary services are loved as much as a hole in the head. Ordinary (Mofussil) services constitute a whopping 80% of KSRTC’s services while bringing in only 26% of its revenue. However, that is not the only reason. Ordinary service business is what is bogging KSRTC down, thanks to mainly its outdated policy on how buses should be procured for Ordinary services.
A KSRTC bus starts its life as a shining Fast Passenger, Superfast or Super Express bus. It runs in that form for some 5 years by which half of its life would have been sucked out of it. Then it will be downgraded to a run as a service class two levels below for a couple of years, after which it will be rebuilt and condemned to run as an “ordinary” service or a Trivandrum city bus. After this it rapidly degenerates into a wheezing, rumbling, creaking clattertrap barely able to run, each gear shift sounding like an atomic explosion, banged up exteriors and interiors rotting away, barely held together by metal strips, clamps, loose rivets and sporadic welding, shaking the teeth out of its passengers heads, spending more time broken down on “kattapuram” than running, until it finally gives up and dies in a scrap yard. This policy has to be flushed down the toilet. Ordinary buses are a liability to KSRTC because they usually are around 7-12 years old and having used up their useful years, run up huge maintenance and fuel bills while generating revenues never at par. This policy is flawed for more than this one reason. It is ridiculous that short distance and city commuters are intentionally deprived of easy and comfortable travel in these grandfather buses.
The entire city and short-distance ordinary service business should be spun off into a separate unit, just like its namesake KaSRTC did with the BMTC, because running city services and long distance services are entirely different games, with different clientele, equipment and revenue models and business models.
The Kerala State Urban Transportation Corporation (KSUTC)
The best and easiest way to restructure and “modernize” KSRTC and is modernize the ordinary business is spin it off into a separate corporation. Getting KSRTC out of the ordinary service business will help it concentrate on its core and strongest business, while the new organization can specialize in offering strong city, town and commuter (moffussil) bus services around urban centers, the heart and soul of any public transportation system and the most ignored in Kerala. The new corporation can be named Kerala State Urban Transportation Corporation (KSUTC).
- KSUTC should be established on similar lines of BMTC, but serving the entire state.
- Take over all “non-Super Class” services, that is, City, City Fast, Ordinary, Venad, Thiru-Kochi, Malabar, TT and Limited Stop Ordinary services from KSRTC.
- KSRTC should only operate services of Fast Passenger class and above.
- Except in big cities, infrastructure can be shared with KSRTC.
- Streamline operations by eliminating confusing identities of these service types. City and LS should do, named Venad, Thiru-Kochi and Malabar according to the region of operation as it is now, with distinct liveries.
- KSUTC’s entire fleet should comprise of low floor buses only, except in areas where such buses cannot be operated.
The new corporation should concentrate on running only city based services and hand over all ordinary service routes to private operators who can run these services much more efficiently. By these ordinary services I mean the Attingal – Venjaramoodu, Muvattupuzha – Perumbavoor, Chalakudi – Kodungalloor kind of services. And for this to work efficiently, some major policy changes are required, right from the Motor Transport Acts level to (re)demarcate boundaries of operations for private and KSRTC services.
The Five Cities: (Trivandrum, Kollam, Ernakulam-Kochi, Thrissur and Kozhikode)
- Only KSUTC should be allowed to run city or otherwise services within city limits.
- KSUTC should also run fast (LS) low-floor services to near-outlying suburbs and towns within 70 km (Trivandrum – Kollam/Nedumangad, Ernakulam – Muvattupuzha/Kottayam, Thrissur – Chalakkudy/Guruvayoor, Kozhikode – Vadakara/Malappuram etc).
- Private operators should also be allowed to operate such services, but only from transit hubs on the edges of city limits.
Major Towns (District/Taluk HQs)
- Only KSUTC should be allowed to run “town bus” services (< 15 km) inside district HQs.
- Private bus operators should be allowed to run services from these towns to any outlying area within 100 km along with KSUTC/KSRTC (as it is done now).
- However, KSUTC should not run services in routes that are more than 70 km. KSRTC should run only FP+ services.
All Other Places and Areas in Kerala
- Allow permits for private operators on all routes including those nationalized today at a maximum distance of 100 km, provided these routes do not enter the five corporations.
- KSUTC should not concentrate on this space at all, except in areas with high demand or where private operators refuse to service.
- KSRTC on the other hand should take over all super-class routes in operation today.
Make More Money to Make More Money!
Cutting costs represents only one half of the strategy of making KSRTC viable, the other half is to make more money, of course. Yes, KSRTC has the highest bus charges in south India and also makes the most revenue per kilometer, but still, there are possibilities of lots more to come in, without hurting anyone. Most of the measures given below may not be direct revenue earners but they will prompt more people to board the buses which will translate into more revenue which can be ploughed back for staff welfare.
@rishi4u Run more premium services to get the money from people who have it to spend. Use that to subsidize rural services. Athraye ullu.
— vadakkus (@vadakkus) August 18, 2014
MOAR VOLVOS!! The first step in getting more people to board buses is to get more buses that people want to board. For now, these could be interstate services, the easiest and biggest moneyspinners any bus operator could wish for. Among the most powerful people in the country today are the interstate private bus operators who literally mint money through overpriced tickets between cities as trains are either unavailable or too slow or simply too “ewwww” for India’s newly Westernized youth. Interstate is where the money is, baby! All that money KSRTC should be making off its own people is going into the pockets of the Karnataka government or random private parties. The 10 Volvos were a welcome start, but KSRTC has to scale up urgently to make up for lost time. Atleast 30 Volvo/Scania bus services everyday to Bangalore, Mangalore and Chennai, please! But these have to be run properly, else the buses will run empty (as they do now). Later, services to Mumbai, Pondicherry, Hyderabad, Tirupati and Goa can be thought of. Yes, it is possible to efficiently run such services (hint: KaSRTC). There are literally tons of money to be made from this sector, from people who are willing to spend it! If only KSRTC has the will to fight against private operators!
Digitization: KSRTC’s current online ticket booking website looks like it is the same one the Flintstones used to use. The “corporate” website is no better either. Seat booking should be made available online for all super class services. All depots and franchises (after appointment) should be networked for real-time online seat reservation. But none of this will be any good without developing a new website! And that should be followed to mobile ticket booking and display and apps. And GPS in buses.
Franchised Ticketing Channels: One of the biggest draws of Karnataka SRTC’s and that of interstate private operators are their ticket selling strategies through numerous private franchises operating on commission basis, because a large majority of our population is not tech-savvy enough. KSRTC without delay must follow this model, appointing atleast one franchisee in panchayat and taluk HQs, two or three in district HQs and five in cities in addition to depots, as well as in Bangalore, Mysore, Mangalore, Coimbatore and Nagercoil at multiple locations.
Rationalization of Services: Try catching a bus from Thrissur or Palakkad bus stations to Coimbatore after 10 at night. There will be atleast 300 people in the station keeping you company with the same goal in mind. But there will be no KSRTC buses while buses run empty chain services on other routes. Predictably SETC (Tamil Nadu) and KaSRTC buses make a killing here. Please study and rationalize services to run as and when they are required in places where they are required at times when they are required while culling services which run empty. Concentrate on shorter intercity services than epic long-haul services running at random times without any scientific rationale. Run services from railway stations as and when trains arrive/depart. In short, KSRTC should run buses when and how passengers require them most and not when it suits the corporation.
Staff Sensitization: For heaven’s (or KSRTC’s) sake, dear holier-than-thou-employees, these huge red-and-yellow metal boxes are your rice and fish curry. It is your children’s educations and your wives’ jewelry and copies of Vanitha. Please be to understand that. Take care of your livelihood, don’t treat KSRTC and its passengers like most of you do now. Understand that conductors are not really required in Volvos, that only two driver-cum-conductors will do. And so many other things. Rice and cockroaches, as the adage goes. Please follow what little sensible things the management tells you, as it is for your own good. There are no bourgeoisie waiting to get fat off KSRTC’s profits.
Cut the Flab and Red Tape: Stop loss-making routes and projects, no matter which politician patronizes them, except in areas where people have no other means of transport and they act as lifelines. KSRTC has 2000 schedules which earn less than Rs.7000 per day. Stop these and redeploy those buses on routes generating revenue. It is better to inconvenience a handful of people than to not have any KSRTC at all. Also, cut down on freebies and travel concessions for the undeserving. For the others, the government must compensate KSRTC for its social obligations, because providing freebies is the government’s headache, not KSRTC’s. The current freebie bill pending is to the tune of 444 crores! Staff rationalization is another important measure. The corporation has way too many employees right now. Also, converting buses to CNG would be a good idea. Not to mention rampant redtapism and bureaucracy which is delaying schedules and causing hardship to commuters.
Make Use of Assets: KSRTC is one of the biggest landowners in Kerala. Efficient utilization of all this land can surely net a lot of benefits, use PPP models if necessary. If nothing, sell some of it and use that money to power the pension fund! Put ads everywhere (except on the buses, please!): on display boards, on buildings, on empty walls, on/as compound walls and above them, on all websites, on everything except the buses. Let us not ruin them? Ok, maybe on their behinds. Lease/hire out buses for trips at half the rate of private operators (you will still make money), you can even make and sell merchandise! Model buses, t-shirts, mugs, key-chains, stickers and the like. No kidding, there is huge money in it! Especially with all those tourists who just love souvenirs!
Better Buses, Services and Infrastructure: Phase out current rattletraps and introduce efficient, comfortable, silent and back-engined buses for long distance services and low floor buses for city services. Work with international bus manufacturers to come out with new models suited for Kerala (and rest of India). Demolish current bhargaveenilayams of bus stations and build cleaner and more inviting ones. This section was getting too long so that I have spun it off into another post (coming soon).
More Suggestions? Please let us know in the comments. Here are some from an IAS officer.
[box type=”warning”]In a nutshell, the most important thing required to save KSRTC is to allow it to run like a proper corporate organization without unnecessary meddling from political entities. And of course for all this to happen it has to again, have that politicial will. When there are too many vested interests at play, there are low chances of any of this every happening.[/box]
I love KSRTC. I have traveled many thousands of kilometers on all their services for many years and I have great memories about them. I would never want to see KSRTC going under, hence this post. KSRTC is a public service organization catering to the very basic of rights and need to the citizens of this country, hence needs to be left alone from being used for populist political games (just like the railways). It needs to be freed of its political clutches and needs to have a properly “corporatized” ways of working with some business sense to ensure healthy balance sheets to earn some profits while not losing sight of its social responsibilities, because the corporation is also a vehicle of citizen service, providing mobility to all people across all sections of society. Just like all transport companies around the world, public transportation organizations like KSRTC are among the lifelines of the country because they provide people with hassle free traveling choices while also helping the country to save lots of $$$ in terms of oil bills and help to reduce carbon emissions. KSRTC has to endure. But for that, it has to also get a complete image makeover to appeal to our car-driving population and bring more people back to KSRTC. More about that in the next part.
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