Analysis of public bus transit performance in major Indian cities

Transportation Research Part A 41 (2007) 961–981
www.elsevier.com/locate/tra
An analysis of public bus transit performance in Indian cities

a,* b,1
Madhav G. Badami , Murtaza Haider
a
School of Urban Planning and McGill School of Environment, McGill University, 815 Sherbrooke Street West,
Montreal, QC, Canada H3A 2K6
b
Ted Rogers School of Management, Ryerson University, 350 Victoria Street, Toronto, ON, Canada M5B 2K3
Received 2 July 2006; accepted 20 June 2007
Abstract
Maintaining and enhancing public transit service in Indian cities is important, to meet rapidly growing mass mobility
needs, and curb personal motor vehicle activity and its impacts at low cost. Indian cities rely predominantly on buses for
public transport, and are likely to continue to do so for years. However, the public bus transit service is inadequate, and
unaffordable for the urban poor. The paper explores the factors that contribute to and affect efforts to improve this situ-
ation, based on an analysis of the financial and operational performance of the public bus transit service in the four metro-
politan centres and four secondary cities during the 1990s. Overall, there were persistent losses, owing to increasing input
costs and declining productivity. The losses occurred despite rapidly increasing fares, and ridership declined. The situation,
and the ability to address it, is worse in the secondary cities than the metropolitan centres. We suggest a disaggregated
approach based on the needs and motivations of different groups in relation to public transit, along with improved oper-
ating conditions and policies to internalize costs of personal motor vehicle use, to address the challenge of providing finan-
cially viable and affordable public bus transit service.
Ó 2007 Elsevier Ltd. All rights reserved.
Keywords: Urban transport; Public transit; Low-income countries; India; Bus transit; Transit performance
1. Introduction – Rapid motor vehicle growth and impacts
Motor vehicle ownership and activity are growing rapidly in the low-income countries of Asia, owing to
rapid urbanization, growing urban incomes and vehicle production increasingly moving there as markets
become saturated in the OECD (Organization for Economic Co-operation and Development) countries. In
India, which accounts for roughly 87% of South Asia’s motor vehicles, the motor vehicle fleet has been dou-
bling every four years over the last three decades (MORTH, 2004). Motor vehicle numbers have grown even
more rapidly in the cities than nationally. Indeed, urban motor vehicle growth rates have far exceeded urban
population growth rates, which themselves have been dramatic. Delhi’s population grew 18-fold in the
*
Corresponding author. Tel.: +1 514 398 3183; fax: +1 514 398 8376.
E-mail addresses: madhav.badami@mcgill.ca (M.G. Badami), murtaza.haider@ryerson.ca (M. Haider).
1
Tel.: +1 416 979 5000x2480; fax: +1 416 979 5378.
0965-8564/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.tra.2007.06.002
962 M.G. Badami, M. Haider / Transportation Research Part A 41 (2007) 961–981
approximately 60 years since 1947, whereas its motor vehicle population grew more than 20-fold in half the
time. Delhi’s motor vehicle fleet presently stands at 4.2 millions (NCTD, 2004), representing a doubling in a
little over 10 years. While Delhi is by far the most motorized city in India, motor vehicle growth has been more
rapid in other cities, such as Ahmedabad, Bangalore and Chennai (CIRT, 1997; SIAM, 2002).
In order to better understand motorization in India, we consider the growth in various passenger motor
vehicles in Delhi (Table 1). From the 1970s, the growth in motorized two-wheeled (M2W) vehicles – motor-
cycles, scooters and mopeds – which offer affordable mobility to millions of people, has been more rapid than
that for all motor vehicles. M2W vehicles have in fact been growing at a much higher rate, and far in excess of
that for all motor vehicles, in India compared to Delhi. These vehicles now account for as much as 70% of
motor vehicles in India. In Delhi, around 2.7 of its 4.2 million vehicles are M2W vehicles (NCTD, 2004;
MORTH, 2004). The other feature of motorization, with important implications for urban transport out-
comes in cities like Delhi, is that cars grew at a rate much higher than that for M2W vehicles, through the
1990s. These trends need to be seen in the context of the low growth rates for for-hire motorized three-wheeled
(M3W) vehicles and taxis, and in particular for buses. As for buses, growth rates in the recent past have
declined considerably from those in the 1970s and 1980s.
The rapid growth in motor vehicle activity in Indian cities has brought in its wake a range of adverse
impacts. Traffic congestion is increasing rapidly, causing significant time and productivity losses. Because
of the concentration of motor vehicular and other energy-intensive activities in metropolitan centres like
Delhi, and the fact that until recently, these activities have been characterized by high pollution intensities,
air quality has been poor in these centres since the late 1980s. Surveys have shown daily average suspended
particulate levels, which are strongly correlated with respiratory and cardiovascular diseases, exceeding World
Health Organization (WHO) guideline limits almost daily in Delhi (CPCB, 1996, 2004). India’s road accident
record, already among the world’s worst, is deteriorating steadily, with the death toll rising from 56,400 to
around 80,000 mortalities between 1991 and currently (MORTH, 2004).
Rapid urbanization in India is accompanied by mass urban poverty, even as urban incomes rise. In Delhi,
one of the wealthiest Indian cities, the average annual per capita income is only around US$1040, and about
half the population reportedly lives in slums (NCTD, 2002; Tiwari, 2002). Although motor vehicle ownership
and activity are growing rapidly, motor vehicle ownership rates, even in Delhi, the most motorized city in
South Asia, is only around 275 per 1000 persons (calculations based on NCTD, 2004 and UN Population
Division, 2002), as against 450–750 in European and North American cities in the early 1990s (Kenworthy
and Laube, 1999). The vast majority who are poor cannot afford even the least expensive motorized modes,
and therefore benefit little from motor vehicle activity. At the same time, they suffer the highest exposures and
impacts due to, for example, transport emissions and road accidents, since many of them live and work road-
side. While car and taxi occupants accounted for only 2% of Delhi’s road accident fatalities in 1994, pedestri-
ans, cyclists and M2W vehicle users accounted for 42%, 14% and 27% respectively (Tiwari, 2002).
Table 1
Motor vehicle growth in Delhi, 1971–2001
Private For-hire Public and private buses Total motor vehicles
Car + Jeep M2W vehicles M3W vehicles Taxis
Motor vehicle numbers, Thousands
1971 56.45 93.26 10.22 3.84 3.04 180.43
1981 117.50 345.11 20.38 6.39 8.04 536.01
1991 398.48 1220.64 63.01 10.16 18.86 1812.97
2001 1046.03 2365.16 76.35 15.46 27.74 3662.98
Annual growth rate, %
1971–1981 10.8 27 9.9 6.6 16.5 19.7
1981–1991 23.9 25 20.9 5.9 13.4 23.8
1991–2001 16.3 9.4 2.1 5.2 4.7 10.2
Notes: 2001 data interpolated from 1998 and 2003 data.
M2W/M3W = Motorized two-/three-wheeled. Sources: MORTH (2004); Mohan et al. (1997); NCTD (2004).
M.G. Badami, M. Haider / Transportation Research Part A 41 (2007) 961–981 963
1.1. Urban transport prospects
Motor vehicle activity in India is already causing much higher adverse local impacts than in the OECD
countries, despite much lower motorization levels, and is likely to grow rapidly over the coming decades in
Indian cities, along with growing urbanization and urban incomes. In 2015, a mere 10 years from now, Mum-
bai and Delhi are expected to have populations exceeding 20 million, Kolkata about 17 million, and Banga-
lore, Chennai and Hyderabad between seven and nine million each. Additionally, India will likely have more
than 42 cities with populations exceeding one million (UN Population Division, 2002).
Technological and transport infrastructure measures to accommodate growing motor vehicle activity are
certainly important, but worldwide experience has shown that such measures are quickly neutralized, and
are therefore futile even in contexts without resource constraints. In India, financial, technological, institu-
tional and administrative resources are far from adequate to accommodate even present levels of motor vehi-
cle activity. But even if there were no resource constraints, transport infrastructure projects such as limited
access expressways could result in the displacement of the urban poor, given the high density and poverty lev-
els, and further compromise access and mobility for the millions who cannot afford motor vehicles. Given the
foregoing, the urban transport challenge in India can be stated as being one of catering for rapidly growing
mass mobility needs with a minimum of adverse impacts, particularly for the poor, and at low cost. An impor-
tant aspect of this challenge is that the bulk of the urban growth is now occurring in medium-sized cities, in
which the urban transport situation and the resources required to address it are more stressed than in the
metropolitan centres.
2. The importance of bus transit
An important consequence of low affordability of motor vehicles is that, despite growing motor vehicle
ownership and use, public transit (and non-motorized modes) continue to account for significant shares of
total trips. The share of public transit (both buses and trains) is as high as 88% in Mumbai; indeed, it is esti-
mated that Mumbai’s suburban trains carry 6.4 million passengers daily (MMRDA, 2006). Per capita motor
vehicle ownership in Mumbai is significantly lower compared to Delhi, precisely because of a high degree of
public transit (specifically, urban rail transit) provision, despite a comparable per capita income. But even in
Delhi, public transit accounts for about 43% of all trips among residential households; further, while M2W
vehicle mode shares increased from 1% to 18% of trips by mechanical modes between 1957 and 1994, bus
mode shares increased from 22% to 62% over this period (RITES/ORG, 1994; Tiwari, 2002).
Notwithstanding the foregoing, of course, motor vehicle ownership and use are growing rapidly, and not
merely due to rising incomes and factors such as easy credit for motor vehicle purchase. Many people have
been forced to live in the urban periphery, in areas poorly served by transit, because they have been priced
out of the land market in the inner cities. Consequently, and also because of increased traffic congestion
and the lack of convenient transit service, many people have been forced to purchase and use personal motor
vehicles, if they can afford them. The motorized mode that people can most easily afford is M2W vehicles.
These vehicles cost a fraction of what cars do, offer excellent mobility and easy access to employment and
other essential services, and have thus become the preferred mode in a context in which there are few other
attractive options. The preponderance of M2W vehicles is therefore hardly surprising. If public transit supply
should deteriorate, personal motor vehicle ownership and activity are bound to grow, particularly in terms of
M2W vehicles. This prospect is of concern, because the bulk of in-use M2W vehicles are even now powered by
two-stroke engines, which tend to have high emission levels. Additionally, M2W vehicles are unstable, and are
rendered more so by being used to carry passengers and goods. Note the high share of M2W vehicle users
among road fatalities, as discussed.
It is important to maintain and enhance public transit service that is accessible, reliable, convenient and
affordable in Indian cities, not only to curb personal motor vehicle use, which is imperative given growing
urban transport impacts, but because public transit is likely to remain the mainstay of low-income commuters.
The poor have no choice but to use public transit if they can afford it, and however inconvenient and time-
consuming it may be. They depend on it for their economic survival. Low-cost mobility is particularly impor-
tant for this group, because while transport expenditure accounts for about 12% of total household income on
average, low-income households already spend larger shares of their income on transport, thus affecting their
expenditure on health, shelter and food (RITES/ORG, 1994; Tiwari, 2002). This situation is only likely to be
exacerbated further, given the recent massive fuel price increases. Finally, public transit accounts for signifi-
cantly lower health-critical emissions, fatalities and road space on a passenger-kilometre basis than personal
motorized modes. These characteristics are extremely important in a context in which transport impacts
already overwhelm scarce resources, and expanding road infrastructure is difficult on account of high popu-
lation densities.
Urban rail projects are either being built or are being considered for various Indian cities including Delhi.
The first phase of Delhi’s Mass Rapid Transit System, measuring 65 km, is expected to be completed soon, at a
cost of around US$2.4 billion, 64% of which was financed by a Japanese government loan (Delhi Metro Rail
Corporation, 2006). It remains to be seen how effective and financially viable the urban rail projects will be in
India, given their high capital costs, the necessity of low fares on account of low per capita incomes, and the
tendency of urban rail to attract bus users but not private motor vehicle users. This is especially so in the
absence of controls on such vehicles, and the inability, because of constrained resources, to build systems that
are both extensive and fine-grained, which would be required to make a significant dent in motor vehicle use in
urban forms such as Delhi’s that are growing rapidly in all directions. Even if urban rail systems are effective,
it will be several years before they become fully operational, and motor vehicle activity will likely grow in the
meanwhile. Finally, it is unlikely that urban rail would be economically viable in the medium-sized cities, in
which per capita incomes are low and population growth and mobility needs are increasing rapidly. There is
therefore a critical need for low-cost transit solutions that are appropriate to the realities of the context. Bus-
based systems have the potential to be such a solution (Mohan et al., 1997). Besides, even if urban rail systems
are implemented, efficient feeder buses will likely be needed, in order for these systems to be truly effective.
Lastly, Indian cities rely predominantly on buses for their public transport needs, with the exception of Mum-
bai, where rail plays a major role, and are likely to continue to do so over the coming years. For all these rea-
sons, there is a great stake in the vitality of bus transit systems for the purposes of meeting mass mobility needs
at low cost.
2.1. The present state of bus transit
While urban bus transit is important for meeting rapidly growing mass mobility needs, and curbing per-
sonal motor vehicle activity and its impacts at low cost, the state of India’s urban bus transport systems unfor-
tunately leaves much to be desired, in terms of outcomes for users. In a survey of M2W vehicle users
conducted by the first author in Delhi in 1997, around 45% of the respondents rated bus service in Delhi
to be poor. Further, twice as many reported substantially higher usage five years earlier than presently as those
that reported the reverse. The most common bus service problems reported were overcrowding, particularly
during peak hours, and the lack of service reliability. Other problems included poor service during off-peak
hours, lack of coverage, particularly on the outskirts, unsafe driving by and rude behaviour of personnel, long
wait and journey times, and the poor condition of buses. Many respondents noted that while private bus oper-
ators (of which more later), because of the profit motive, stopped to pick up passengers at unscheduled stops,
causing over-loading and inordinate journey times, and often bribed the police to avoid being fined for over-
crowding, publicly owned buses often did not stop even at designated stops, making it extremely difficult to
travel with ladies, children and the elderly. Lastly, almost every respondent remarked on the sexual harass-
ment female passengers had to deal with on a daily basis. The state of public bus transit appears to have chan-
ged very little since (Tiwari, 2002; Pucher et al., 2004).
The importance of low-cost mobility has been highlighted, given the socio-economic realities, but bus travel
has been simply unaffordable for a significant proportion of urban residents, and despite bus fares having been
heavily subsidized until recently. On the outskirts of Delhi, where bus service is poor, daily round-trip bus
fares for just one worker in a household with a monthly income of Indian Rupees (INR) 2000 (such house-
holds form the bulk of the city’s population) would consume 25% or more of this income. For households with
lower incomes, the bus fares would be prohibitively expensive (Tiwari, 2002).
So, the situation is that, while the mode shares for buses, which form the bulk of public transit are substan-
tial, the quality of urban bus transit is poor. If bus transit shares are high despite the poor service, it is simply
because of the lack of viable alternatives for the bulk of users. At the same time, it appears to be out of reach
of the urban poor, who are the most affected by rapid motorization. Apart from the inability to meet rapidly
growing mass mobility needs, it is likely that the poor urban bus transit situation will cause accelerated growth
in private motor vehicle (particularly M2W vehicle) ownership and activity, as noted. M2W vehicles have
many advantages with respect to public transit, including their low marginal costs of use, their low door-
to-door journey times relative to buses and even cars (Badami, 2005), and their ability to be parked easily
(and the difficulty of controlling their parking). In view of this prospect, there is an urgent need to understand
the causes of the poor condition of urban bus transit in India.
3. Rationale, scope and methodological approach
To better understand the state of urban bus transit in India, the paper first reports on an in-depth analysis
of its financial and operational performance. It then discusses the challenge faced by urban bus transit in meet-
ing mass mobility needs in India, specifically in terms of financial viability, which is essential for effective ser-
vice delivery over the long term, and affordable service provision, given the high levels of urban poverty. The
paper discusses the dilemmas inherent in reconciling financial viability on the one hand and providing afford-
able services to the masses on the other, and suggests some broad strategies for meeting this difficult challenge.
3.1. Data and related issues
For our in-depth analysis of the financial and operational performance of urban bus transit in India, we use
the data generated by the Central Institute of Road Transport (CIRT), and published for the Association of
Road Transport Undertakings (ASRTU), for the publicly owned and operated bus transit corporations in
Indian cities, over the period 1990–91 to 2000–01. We use three points during this period, 1990–91, 1995–
96, and 2000–01, to track the performance of these urban bus transit operations.
The CIRT data relates to publicly owned bus transit operations (‘‘state transport undertakings’’, or STUs)
across India, which are classified as ‘‘urban’’, ‘‘rural’’ and ‘‘hilly’’ (CIRT, 1992, 1997, 2002). As far as the
‘‘urban’’ classification is concerned, the bus operations in only some Indian cities are characterized as such.
Many cities with populations and bus fleets comparable to the ones characterized as ‘‘urban’’ are not so clas-
sified. More importantly for our analysis, data is not provided separately for such cities; rather, the data for
these cities is included in that for the transport corporations of the states of which the city operations happen
to be a part. So, for Bangalore, which has the fifth largest urban population in India, it is only for 2000–01 that
data is available separately for this city; in the previous years, the data for Bangalore are included in that for
the Karnataka State Road Transport Corporation (KSRTC). While data for urban operations within the state
of Karnataka are available in the previous years, this is not helpful, because this data includes that for other
cities in the state, such as Mysore, and it is not possible to extract the data for Bangalore for 1990–91 and
1995–96. The situation is similar for Hyderabad, the capital of the state of Andhra Pradesh, and India’s sixth
largest city. Data is presented separately for urban and rural bus operations in the state of Andhra Pradesh, at
least for some parameters, but it is not possible to extract data specifically related to Hyderabad. The problem
is a little different, but the result is the same, for major cities in the state of Tamil Nadu, such as Coimbatore
and Madurai. There, the bus transport operations have been constantly re-organized and re-named, making it
very difficult to be confident about the data for each of the cities, let alone to make year to year comparisons
for them.
A second important issue related to the CIRT data is that, even the cities that are characterized as ‘‘urban’’
and for which data is provided separately, vary at each of the points during the 1990–2001 period that we have
chosen for our analysis. In 1990–91, the bus operations in the following cities were characterized as ‘‘urban’’:
Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Chandigarh, Pimpri-Chinchwad, Solapur, Kolhapur,
Thane, Ludhiana, Amritsar, and Bhavnagar. In 1995–96, bus operations in all of the above cities were
characterized as ‘‘urban’’, except the last three. And in 2000–01, bus operations in the same cities as in
1995–96 were characterized as ‘‘urban’’, with Navi Mumbai and Bangalore added.
The upshot of all of this is that a consistent comparison of all urban bus transit operations in India is not
possible. But beyond this, even for the cities for which data is available for 1990–91, 1995–96, and 2000–01,
data is not available for all parameters of interest. So, for example, in the case of Solapur, no financial per-
formance or capital structure information is available for 1995–96 or 2000–01, and for Pimpri-Chinchwad and
Chandigarh, no capital structure information is available for the same two years. Our analysis therefore
includes only the following eight cities: Chennai, Delhi, Kolkata, Mumbai, Ahmedabad, Kolhapur, Pune,
and Thane. For Pune, the capital structure data used for 1990–91 is actually from 1989–90, and this data
has been interpolated for 1995–96, since it is not available for this year. Fortunately, however, these eight cities
include India’s four largest metropolitan centres (Chennai, Delhi, Kolkata and Mumbai), allowing a consis-
tent comparison of bus transit operations in these cities over the 1990s.
Table 2 shows data related to buses held, passengers carried and passenger-kilometres from 1990/91 to
2000/01 on 12 of the 13 publicly owned bus transit operations designated as ‘‘urban’’ for 2000/01. Only
one bus transit operation, namely the Navi Mumbai Municipal Transport, in Mumbai’s satellite city of Navi
Mumbai, has been omitted; this is a very small operation, with only 126 buses in 2000, and in any case, no data
is available for previous years. It should also be noted that we have restricted ourselves to those urban bus
transit operations that are publicly owned and operated. In 2000–01, Delhi (and Bangalore) had buses that
were under the management of their respective public bus transport corporations, but were privately operated.
These operations are excluded from Table 2, and indeed from our discussions in our paper until we address the
issue of privatization.
An analysis of the data in Table 2 follows later in the paper, but for now, suffice it to say that the first eight
cities in Table 2 on which we have chosen to base our analysis accounted for nearly 80% or more of buses held
Table 2
Fleet and capacity utilization – publicly owned ‘‘urban’’ bus transit operations in India, 1990–91 to 2000–01
1990–91 1995–96 2000–01
Buses Passengers Pass-km Buses Passengers Pass-km Buses Passengers Pass-km
(106) (106) (106) (106) (106) (106)
Metro cities
Chennai 2310 1241.0 10114.1 2473 1381.5 12445.5 2819 1443.2 13414.0
Delhi 4403 1600.2 19078.0 3206 578.0 9203.9 2911 893.9 8264.7
Kolkata 1048 306.7 2743.7 1207 282.9 2863.9 1235 234.3 2216.6
Mumbai 2612 1503.7 9204.7 3250 1711.0 11437.0 3432 1511.6 10089.5
Total 10,373 4651.6 41140.5 10,136 3953.4 35950.3 10,397 4083.0 33984.8
Secondary cities
Ahmedabad 728 226.2 1514.0 708 250.2 1943.5 905 247.8 1969.2
Kolhapur 88 34.1 292.4 159 41.9 351.2 110 19.7 119.2
Pune 561 205.3 1503.5 817 228.6 2461.3 812 153.0 1652.3
Thane 68 40.2 187.2 180 87.8 663.8 246 80.2 706.5
Total 1445 505.8 3497.1 1864 608.5 5419.8 2073 500.7 4447.2
Other cities
Bangalore 1600 648.8 6138.9 1870 693.7 8763.5 2264 905.0 6215.2
Chandigarh 342 59.1 1155.2 412 67.2 1726.0 417 77.5 1982.6
Pimpri-Chinchwad 277 87.6 508.1 220 49.0 703.7 232 22.3 321.0
Solapur 87 28.1 364.9 117 37.8 490.7 146 47.2 612.4
Total ‘‘Urban’’ 14,124 5981.0 52805.0 14,627 5402.8 52966.0 15,529 5622.5 47391.0
Metro cities % share 73.4 77.8 77.9 69.3 73.2 67.9 67.0 72.6 71.7
Secondary + Other 26.6 22.2 22.1 30.7 26.8 32.1 33.0 27.4 28.3
cities % share
Sample cities % share 83.7 86.2 84.5 82.0 84.4 78.1 80.3 81.5 81.1
(italicised)
Sources: CIRT (1992, 1997, 2002).
Notes: For Chandigarh and Pune, 1989/90 data used for 1990/91. For Bangalore, KSRTC city data used for 1990/91 and 1995/96; for
2000/01, passenger and passenger-kilometre data based on STU share of BMTC (Bangalore Metropolitan Transport Corporation) buses.
For Solapur, 1994/95 bus data used for 1995/96; passenger-kilometre data for 1995/96 extrapolated from 1990/91 based on passenger
growth; passenger and passenger-kilometre data for 2000/01 extrapolated from 1990/91 and 1995/96.
and passengers carried by all the bus transit operations characterized as ‘‘urban’’ in 1990–91, 1995–96 and
2000–01. Also, the four metropolitan centres themselves accounted for more than two-thirds of buses held
as well as passengers carried by the ‘‘urban’’ bus operations in these years. While this shows their pre-dom-
inant position, note that their shares in terms of these parameters have been declining over the years, showing
the growing importance of bus operations in the other cities.
3.2. Analytical framework
Our analysis of the bus transit operations in the eight sample cities is conducted in the following sequence:
to explain the user service outcomes, we study quality of service and coverage, which is then sought to be
explained based on an examination of fleet strength, and fleet and capacity utilization. This is followed by
an examination of the financial performance, in terms of traffic revenues and operating costs, profit and loss,
and financial ratios. The financial performance is then further analyzed in terms of bus and labour productiv-
ity, and fuel economy. Finally, as part of our concluding section, the ability of the urban bus transit operations
to provide quality service over the long term is analyzed based on an examination of their capital structure,
and sources of finance including government contributions. The evolution of these operational and financial
performance parameters is analyzed over the period from 1990–91 to 2000–01.
We have considered the bus transit operations in the four metropolitan centres separately from those in the
secondary cities, namely, Ahmedabad, Kolhapur, Pune and Thane, to study the situation in the metropolitan
centres, and also to see if there are discernible differences in the performance of bus operations in these centres
and the secondary cities. Financial performance parameters are compared over time in terms of constant
Indian rupees (INR). This is accomplished by deflating the rupee figures over time by applying the consumer
price index for industrial workers (CPI (IW)) for the years 1995–96 and 2000–01 relative to 1990–91, obtained
from the Labour Bureau of the Government of India (Ministry of Labour and Employment, 2006). As the
Economic Survey of India notes, the CPI (IW) is the most commonly used price index for tracking inflation
(Ministry of Finance, 1997).
3.3. Choice of measures
We have used the measures, and data in terms of these measures, provided by the CIRT, but in several
cases, we have calculated figures for measures that we feel better capture important bus transit objectives.
For example, rather than use the CIRT measure of buses held per 100,000 population for assessing accessi-
bility to bus transit, we use capacity-kilometres per million population, because this takes into account both
the seating plus standing capacity as well as the effective kilometres (that is, kilometres travelled in actually
carrying passengers). Of course, even this measure does not address the issue of how these kilometres are dis-
tributed, either in space or by, for example, income group.
In the case of capacity utilization, whereas data for passengers/bus on road/day is provided by CIRT, and
this may be used as a measure of bus loading, % occupation ratio (the ratio of passenger-kilometres to seat-
kilometres) and % load factor (the ratio of passenger-kilometres to carrying capacity-kilometres), both of
which are also provided by CIRT, are better measures for this purpose, since with the first measure, there
is no accounting of the number of trips over which the loading is spread out. We use % load factor; this
includes both seating and standing capacity, and is therefore a less stringent, but more realistic, measure of
bus loading. In the case of financial performance, the CIRT provides data for total operating cost/bus on
road/day. While this may be an adequate measure from the perspective of the bus operator, a better measure
from the point of view of society at large is the total cost per unit of social benefit in terms of passenger-kilo-
metres, and this is the measure which we have calculated. In trying to explain bus transit operational and
financial performance, we use various productivity and efficiency measures. As far as the buses themselves
are concerned, the CIRT provides data for the percentage of buses held that are on road (and actually carrying
passengers) and the total effective kilometres per bus on road as measures of fleet and bus utilization respec-
tively. A much better measure of the actual utilization of buses (and therefore of the extent to which buses
being ‘‘off-road’’ is minimized) would be the total effective kilometres per buses held. But even better from
the perspective of societal benefit derived from available resources would be passenger-kilometres per bus
held, which is the measure which we have calculated. Similarly, and for the same reason, whereas the CIRT
provides fleet fuel efficiency data in terms of kilometres per litre, we have calculated fuel efficiency in terms of
passenger-kilometres per litre. Lastly, in terms of labour productivity, the CIRT provides data for bus-staff
ratio, which is the total number of staff per bus on road, and total effective kilometres per ‘‘man-day’’ paid
for. While the second measure is better than the first in terms of labour productivity from the perspective
of the bus operator, passenger-kilometres per employee per day is the best measure in our judgment from
the point of view of society, and this is the measure we have calculated in our paper.
4. Analysis of data
4.1. Bus transit provision
Table 2 shows that the number of buses held by the publicly owned and operated bus transit providers
increased fairly steadily in the four secondary cities over the 1990s. On the other hand, the number of buses
held in the four metropolitan centres remained flat, and in fact dropped between 1990–91 and 1995–96. Of
particular note is the steady reduction in buses held by Delhi Transport Corporation (DTC), the publicly
owned operator in the Indian capital (and the most motorized Indian city). Indeed, Delhi’s public bus fleet
was fully 33% lower in 2000–01 compared to 10 years earlier. However, it should be pointed out that there
were in fact considerably more buses held by private operators (but under DTC management) in 2000–01.
When these are included, Delhi in fact had the largest fleet (of 6028 buses) of any Indian city in this year,
and 37% more buses than it did in 1990–91. Further, Delhi has had a large number of buses owned and
operated by private operators (Table 1). Unfortunately, no data relating to operational or financial perfor-
mance is available for these operations.
As already pointed out, a much better measure of bus transit supply than buses held is carrying capacity-
kilometres per capita. This measure is calculated for the various cities, taking into account only the publicly
owned and operated bus transit providers, in Table 3, and graphically represented, for the four metropolitan
centres and four secondary cities, in Fig. 1. Interestingly, bus transit supply in terms of this measure was con-
sistently higher on average in the former than in the latter cities. This is despite the much higher population
levels in the metropolitan centres, showing the significantly higher bus transit provision in these cities.
At the same time, though, capacity-kilometres per capita steadily dropped over the decade in the metropol-
itan centres (showing the potential for over-loading), while marginally increasing in the four secondary cities.
In these cities, carrying capacity-kilometres actually increased significantly, but population growth, at close to
5% per annum, was nearly as rapid. The decline in capacity provision on a per capita basis is particularly strik-
ing in the case of Delhi (Table 3). If the private bus operations under DTC management were included for
2000–01, the situation would look more respectable, but still inferior to that in 1990–91, and the averages
for the four metropolitan and all eight sample cities would improve only marginally. It is also worth noting
that, while Chennai consistently had the highest capacity-kilometres per capita, Kolkata stands out among the
metropolitan centres for its significantly low capacity provision, which was on par of that in the smaller sec-
ondary cities. In Mumbai’s favour, it should be pointed out that, while capacity provision per capita was much
lower than in Chennai (and flat over the decade), rail, and not buses, account for the bulk of public transit
travel.
4.2. Service utilization
We have so far focused on the provision of bus capacity-kilometres in our sample cities. We now discuss the
extent to which this capacity is utilized by the public, and the quality of service. Remarkably, the number of
passengers carried by public bus transit actually dropped in the four metropolitan centres over the 1990s
(Table 2). The only exception was Chennai, which showed a steady increase over the decade. As for Delhi,
the number of passengers carried by DTC dropped precipitously in 1995–96 to about 36% of that in 1990–
91; although there was an improvement in the second half of the decade, DTC carried only 55% of the pas-
sengers in 2000–01 that it did in 1990–91. Even when the private bus operations under DTC management are
included for 2000–01, the number of passengers carried improved only marginally over 1990–91. While the
Table 3
M.G. Badami, M. Haider / Transportation Research Part A 41 (2007) 961–981

Per capita accessibility to public bus transit service, and bus loading, 1990–91 to 2000–01
1990–91 1995–96 2000–01
Population Carrying Pass- Carrying % Population Carrying Pass- Carrying % Population Carrying Pass- Carrying %
(106) capacity- km capacity- Load (106) capacity- km capacity- Load (106) capacity- km capacity- Load
km (106) (106) km/ Factor km (106) (106) km/ factor km (106) (106) km/ factor
person person person
Metro cities
Chennai 5.34 11470.3 10114.1 2148 88.2 5.84 15124.9 12445.5 2590 82.3 6.35 15462.7 13414.0 2435 86.8
Delhi 8.21 19431.6 19078.0 2367 98.2 10.09 11202.7 9203.9 1110 82.2 12.44 9393.4 8264.7 755 88.0
Kolkata 10.89 2780.5 2743.7 255 98.7 11.93 3204.4 2863.9 269 89.4 13.06 3006.9 2216.6 230 73.7
Mumbai 12.31 12584.0 9204.7 1022 73.2 14.11 17486.7 11437.0 1239 65.4 16.09 18310.0 10089.5 1138 55.1
Secondary cities
Ahmedabad 3.26 2571.3 1514.0 789 58.9 3.79 3030.3 1943.5 800 64.1 4.43 3709.7 1969.2 837 53.1
Kolhapur 2.27 367.7 292.4 162 79.5 2.9 692.6 351.2 239 50.7 3.52 305.5 119.2 87 39.0
Pune 2.43 2359.9 1503.5 971 63.7 2.98 3865.6 2461.3 1297 63.7 3.66 3674.8 1652.3 1004 45.0
Thane 1.38 268.9 187.2 195 69.6 1.76 664.7 663.8 378 99.9 2.13 995.8 706.5 468 71.0
Overall
Metro cities 36.75 46266.4 41140.5 1259 88.9 41.97 47018.7 35950.3 1120 76.5 47.94 46173.0 33984.8 963 73.6
STU
Secondary 9.34 5567.8 3497.1 596 62.8 11.43 8253.2 5419.8 722 65.7 13.74 8685.8 4447.2 632 51.2
cities STU
Sample 46.09 51834.2 44637.6 1125 86.1 53.40 55271.9 41370.1 1035 74.8 61.68 54858.8 38432.0 889 70.1
cities STU
Note: Data drawn from and calculations based on CIRT (1992, 1997, 2002). The data for Delhi is only for DTC operated buses, not for DTC (Private).
969
Fig. 1. Per capita accessibility to public bus transit service, 1990–91 to 2000–01.
passengers carried in the secondary cities increased over the first half of the decade, they remained flat over the
decade, with significant declines between 1995–96 and 2000–01 in Pune and Kolhapur. The trend in passenger-
kilometres is similar to that for passengers carried in the metropolitan centres, average bus transit journey
lengths having remained fairly constant (about 9 km) over the decade. In the secondary cities, average journey
lengths increased (from 6.4 to 8.4 km) over the decade; this, along with the trend in passengers carried caused
passenger-kilometres to increase over the decade, but decline in its second half (Table 3).
This of course means that, although capacity-kilometres per capita declined significantly (suggesting poten-
tial for over-loading), and contrary to the common belief that buses are becoming more crowded, the opposite
was the case (Fig. 3). The percentage load factor in fact reduced significantly over the decade. In the secondary
cities, recall that passenger-kilometres went up somewhat, but obviously this increase was more than made up
by the increased capacity. In the metropolitan centres, the load factor was close to 90% in 1990–91, showing
fairly heavy bus loadings, but the situation improved, despite declining capacity, because of reduced passenger
travel. Overall, capacity provision per person was much higher in the metropolitan centres, and this capacity
was much better used, and buses were loaded more, than in the secondary cities.
The decline, or at best, no increase, in passengers carried (Fig. 2) is certainly very interesting, given the
rapid population growth, and the fact that the number of buses, and capacity-kilometres, held fairly steady
overall, and actually increased dramatically in the secondary cities. This is an issue we explore in our
conclusions.
4.3. Financial performance
Bus operations in the metropolitan centres and secondary cities had losses even before tax right through the
1990s, except for Thane, which showed a small profit, and Kolhapur, which did so in 1990–91 and 2000–01
(Table 4). Delhi’s publicly owned bus corporation alone accounted for 60–70% of the overall losses in 1990–91
and 1995–96, with the situation improving considerably at the end of the decade, very likely due to the private
Fig. 2. Passengers carried by public bus transit, 1990–91 to 2000–01.

Fig. 3. Public transit bus loading, 1990–91 to 2000–01.
operation of a significant portion of the bus fleet, to be discussed later. In 2000–01, Mumbai’s was the worst
performing bus operation, with losses accounting for a third of the total losses in all eight cities. Overall, the
pre-tax financial performance in the metropolitan centres improved over the decade after deteriorating in the
first half, largely due to the situation in Delhi, whereas that in the secondary cities declined significantly, lar-
gely due to the operation in Ahmedabad.
The consistent losses suffered by the operations in both the metropolitan centres and secondary cities obvi-
ously show that the total costs even before taxes consistently exceeded total revenues (mainly from passenger
fares but also other sources). Interestingly, while total revenues in the four metropolitan centres increased stea-
dily in real terms, despite a steady reduction in passenger-kilometres (discussed in Section 4.2 above), suggest-
ing a considerable real increase in passenger fares, pre-tax costs increased less rapidly than revenues over the
decade, leading to the improved financial performance, albeit a loss, at the end of the decade. In the secondary
cities, total revenues increased at the same rate as in the metropolitan centres, but pre-tax costs increased much
more rapidly than revenues, very likely due to the significant increase in bus capacity, leading to the consid-
erably increased losses at the end of the decade as discussed.
4.3.1. Traffic revenue and operating cost per passenger-kilometre

Since the passenger-kilometre levels varied over the period of analysis, a proper comparison of financial
performance across bus operations and over time would require that the revenues and costs be calculated
Table 4
Key financial performance statistics, 1990–91 to 2000–01
Total operating costs (less interest and taxes) Traffic revenues (106 rupees) Profit/loss before tax (106
(106) rupees rupees)
1990–91 1995–96 2000–01 1990–91 1995–96 2000–01 1990–91 1995–96 2000–01
Metro cities
Chennai 1180.2 2351.5 3835.6 988.5 1888.9 3109.2 122.7 358.3 413.3
Delhi 2174.3 2473.0 4059.8 1183.2 1491.1 2768.6 1646.6 3692.1 943.1
Kolkata 628.7 999.4 1305.5 268.3 416.6 530.7 359.4 583.7 772.3
Mumbai 2176.5 4770.4 8323.9 1656.0 3850.8 6465.0 420.8 648.7 1379.4
Secondary cities
Ahmedabad 309.9 512.9 1090.1 250.7 493.8 822.3 81.1 75.0 507.8
Kolhapur 42.9 122.0 103.4 46.6 115.2 75.3 1.6 12.6 3.8
Pune 314.5 742.2 1012.8 315.3 670.2 885.9 13.8 61.2 97.9
Thane 41.3 151.6 359.5 45.0 161.4 358.3 2.0 18.8 1.1
Overall
Metro cities 6159.7 10594.3 17524.8 4096.0 7647.4 12873.5 2549.5 5282.8 3508.1
Secondary cities 708.6 1528.7 2565.8 657.6 1440.6 2141.8 91.3 130.0 600.8
Sample cities 6868.3 12123.0 20090.6 4753.6 9088.0 15015.3 2640.8 5412.8 4108.9
Note: Data drawn from and calculations based on CIRT (1992, 1997, 2002). Figures have not been adjusted for inflation. Traffic revenues
are fare box revenues.
Fig. 4. Operating cost and traffic revenue per passenger-kilometre, 1990–91 to 2000–01.
per passenger-kilometre and with inflation adjusted, as already discussed. Also, to measure the financial per-
formance of bus operations strictly in relation to carrying passengers, which after all is their primary function,
it is desirable to compare traffic (as opposed to total) revenues with operating costs, that is, total costs less
taxes as well as interest payments. These calculations, based on the data in Tables 2 and 4 are presented in
Fig. 4.
Traffic revenue per passenger-kilometre (which is in fact the average fare per passenger per kilometre)
increased steadily, by as much as 68% in real terms, over the decade in the metropolitan centres. The fares
were the lowest overall in Chennai and Kolkata, and the highest (about 2.5 times higher) in Mumbai; they
increased least rapidly in Chennai, and by far the most rapidly (by 139%) in Delhi, which, it should be pointed
out, started the decade with the lowest fare of all the metropolitan centres. Operating costs per passenger-kilo-
metre were of course consistently higher than traffic revenues in all of the metropolitan centres, but increased
at a lower rate (52% in real terms) than traffic revenues, over the decade. As with fares, operating costs per
passenger-kilometre were by far the lowest in Chennai, and the highest in Mumbai (about 2.5 times higher
on average). Operating costs increased most rapidly (by 91%) in Delhi among the metropolitan centres.
In the secondary cities, the average fares in terms of traffic revenue per passenger-kilometre were consis-
tently higher than in the metropolitan centres, although the fares in Mumbai were in fact the highest of all
eight sample cities. Average fares in the secondary cities actually declined in the first half of the decade,
and then increased at about the same rate as in the metropolitan centres in the second half of the decade,
as shown in Fig. 4. But fares in Thane, the smallest of the eight bus operations, fell continuously over the dec-
ade. Operating costs per passenger-kilometre also fell in the first half of the decade, and then increased more
rapidly than traffic revenues, in the second half. This differential was particularly pronounced for Kolhapur,
for which the former increased by as much as 162% over the decade, as against only a 75% increase in traffic
revenues per passenger-kilometre. The trends in operating costs per passenger-kilometre in the secondary cities
need to be seen in the context of the significantly increased bus capacity, and the fact that passenger-kilometres
increased significantly in the first half, and then fell nearly as significantly in the second half of the decade.
4.3.2. Operating cost recovery through fares

A particularly useful measure of the financial effectiveness with which bus operations carry passengers is the
extent to which operating costs are recovered through passenger fares. This measure, expressed as the percent-
age of operating costs accounted for by traffic revenue, is plotted in Fig. 5. The first point to note is that a
much higher share of operating costs was recovered through fares in the secondary cities than in the metro-
politan centres. At the same time, though, while the traffic revenue share of operating cost improved steadily in
the metropolitan centres, it dropped markedly in the second half of the decade in the secondary cities; this
trend is related to the fact that operating costs increased much more rapidly than traffic revenues in these cit-
ies, as discussed. Chennai had the highest rate of cost recovery through fares of all metropolitan centre oper-
ations (around 82% on average), followed closely by Mumbai (around 78%). Chennai’s achievement in this
regard is notable because it also had the lowest fares consistently of all metropolitan centres. Kolkata’s fares
were as low as Chennai’s, but unlike Chennai, the city consistently had the lowest recovery (only 42%),
because of significantly higher operating costs. Delhi had the largest increase in the rate of recovery (from
54% to 68% over the decade). Of the secondary cities, Thane, Pune and Kolhapur all had recovery rates of
Fig. 5. Recovery of operating cost through traffic revenue, 1990–91 to 2000–01.
above 100% in 1990–91; while in Thane’s case, this figure was 100% at the end of the decade, Kolhapur’s
dropped steeply to 73%. This happened because, although Kolhapur had the highest average fares (along with
Mumbai’s, of about 28 paise per passenger-kilometre) in 2000/01, it had by far the highest operating cost of
any operation (38, as compared to 37 and only 13 paise per passenger-kilometre in Mumbai and Chennai
respectively).
4.3.3. Breakdown of bus transit costs

An analysis of the various cost components (Figs. 6 and 7) reveals, not surprisingly, that personnel costs are
by far the most important, followed by diesel fuel costs. Further, both of these components registered a sharp
increase in percentage share since 1995–96, particularly in the metropolitan centres. These two components
alone accounted for 85% of total costs (and 89% of operating costs, that is, total costs less taxes and interest)
in these centres in 2000–01. Personnel costs accounted for a much higher share of total costs in the metropol-
itan centres than in the secondary cities in 2000–01; in the case of diesel fuel and other material costs, the sit-
uation was reversed. Of the metropolitan centres, Chennai appears to have held personnel costs steadily at
around 52% of total costs through the decade, no doubt contributing to the low operating costs in this city,
discussed earlier. On the other hand, the percentage share of personnel costs increased sharply in the other
three metropolitan centres; in Mumbai, the increase was from 47% in 1990–91 to as high as 72% of total costs
in 2000–01.
In the last part of this section on financial performance, we consider the three most important components
of bus operating costs, namely those relating to personnel, diesel fuel and other materials, on a passenger-kilo-
metre basis (Fig. 8). First, personnel costs are the highest, followed by diesel and other materials, in line with
Fig. 6. Share of various costs, metropolitan cities, 1990–91 to 2000–01.

Fig. 7. Share of various costs, secondary cities, 1990–91 to 2000–01.
Fig. 8. Personnel, diesel and material costs per passenger-kilometre, 1990–91 to 2000–01.
their percentage shares. Second, while there was an increase between 1995–96 and 2000–01 for personnel and
diesel costs, the cost of other materials actually fell. The costs per passenger-kilometre were consistently higher
for the secondary cities, except for personnel costs since 1995–96. This suggests increasing returns to scale with
regard to operating costs. Whereas personnel cost increases on a passenger-kilometre basis were significantly
higher over the decade in the metropolitan centre operations, diesel costs per passenger-kilometre increased
slightly more rapidly in the secondary city operations. Since passenger-kilometres declined steadily over the
decade in the metropolitan centres, and were only marginally higher at the end of the decade than at the begin-
ning for the secondary city operations, it may be concluded that while the secondary city operations were not
very much better than their metropolitan city counterparts in controlling personnel costs, they were consider-
ably less successful in controlling diesel costs. Chennai had the lowest diesel as well as personnel costs per pas-
senger-kilometre of all the cities. Mumbai had by far the highest personnel costs per passenger-kilometre of all
the cities in 2000–01 – more than three times that of Chennai’s in the same year, and more than twice its own
cost in 1995–96.
4.4. Bus and labour productivity, and fuel efficiency
The increase in operating costs, particularly since 1995–96, is likely due to increases in per unit costs; how-
ever, productivity is also an important factor. For example, fuel costs per passenger-kilometre are the product
of costs per litre of fuel, and fuel consumption in litres per passenger-kilometre. Bus operations have no con-
trol over unit diesel costs per litre, but do have control over fuel consumption per passenger-kilometre, by way
of bus technology, maintenance, efficient capacity utilization and route management, careful driving and so
forth. In this section, we look at the effectiveness with which bus, labour and fuel assets have been employed,
and changes over the 1990s. As discussed in our Methodological Approach section, we have calculated 103
passenger-kilometres per bus held per day as a measure of the effectiveness with which bus fleets are utilized
to provide service. Fleet fuel efficiency has been calculated in terms of passenger-kilometres per litre, instead of
using the kilometres per litre (km/l) data provided by CIRT. Lastly, we have calculated labour productivity in
terms of passenger-kilometres per employee per day, rather than using the various measures for which CIRT
provide data. Apart from capturing the efficiency with which bus operations employ various resources, these
measures have the advantage, by not incorporating monetary measures, of being able to be compared over
time without having to be corrected for inflation.
4.4.1. Bus productivity

Bus productivity in passenger-kilometres per bus held declined for the metropolitan operations by 17% over
the decade (Fig. 9). Since there was effectively no change in buses held, this decline was caused by a reduction
by the same extent in passenger-kilometres – in large part due to a steady drop in passengers carried, and only
to a small extent in revenue generating kilometres, as noted earlier. In the case of the secondary cities, the
decline in this measure was about 11% over the decade, after having in fact increased by about 8% in its first
half. This happened despite an increase of 27% in passenger-kilometres over the decade, but this increase was
offset by an even larger growth in the buses held (indeed, as noted earlier, though passenger-kilometres in these
cities increased over the decade, passengers carried at the end of that decade actually fell slightly). The signif-
icantly lower bus productivity in the secondary cities as compared to the metropolitan centres was of course
due to the significantly lower load factor in the former (Fig. 4).
4.4.2. Labour productivity

As for labour productivity, there was a 7% decline over the decade for the metropolitan centre operations.
For the secondary city operations, labour productivity declined only marginally over the decade, after having
increased substantially until 1995–96 (Fig. 9). Although passenger-kilometres declined steadily in the metro-
politan centres, the number of employees also dropped, albeit to a lesser extent over the same time, with much
of the reduction happening in Delhi. In the secondary cities, employees increased by the same proportion as
passenger-kilometres. As in the case of bus productivity, labour productivity was significantly and consistently
lower in the secondary cities than in the metropolitan centres. In 2000–01, it was about 30% lower. While pas-
senger-kilometres were of course much higher (by a factor of 7.6) in the metropolitan centres, these centres had
only 5.4 times the employees as the secondary city operations, suggesting scale effects as regards labour
resources. However, while the secondary cities had far more employees per passenger-kilometre, these cities
actually had fewer employees per bus held compared to the metropolitan centres (Table 5). This not only
shows how notions of productivity are sensitive to the choice of measure, but also that the secondary cities
have a lower labour productivity in terms of passenger-kilometres per employee per day not so much because
they have far more employees than they need to vis-à-vis their metropolitan counterparts, but rather that they
have been unable to get enough passengers on to the buses that they do operate.
Fig. 9. Bus and labour productivity and fleet fuel efficiency, 1990–91 to 2000–01.
Table 5
Bus and labour productivity, and fleet fuel efficiency, 2000–01
1000 Pass-km/bus held/day Pass-km/employee/day Employees/bus held Pass-km/l km/l
Metro cities
Chennai 13.0 1711.1 7.62 217 3.53
Delhi 7.8 927.4 8.39 210 3.81
Kolkata 4.9 645.2 7.62 124 3.46
Mumbai 8.1 730.0 11.03 124 3.04
Secondary cities
Ahmedabad 6.0 774.0 7.70 126 3.70
Kolhapur 3.0 350.0 8.48 75 3.61
Pune 5.6 662.5 8.42 93 3.42
Thane 7.9 755.8 10.41 136 3.31
Overall
Metro cities STU 9.0 999.3 8.96 170 3.38
Secondary cities STU 5.9 704.4 8.34 111 3.52
Sample cities STU 8.4 953.2 8.86 160 3.41
Note: Calculations based on data from CIRT (1992, 1997, 2002).
Despite their significantly higher labour productivity, recall that the metropolitan centres have higher per-
sonnel costs per passenger-kilometre than the secondary cities. This is simply because of the much higher
labour costs in the former (particularly in Mumbai). Indeed, daily employee salaries, which were only margin-
ally higher than in the secondary cities in 1990–91, increased far more rapidly, and were as much as 53% higher
in 2000–01, in the metropolitan centres (and in Mumbai, were more than twice the average salary in the sec-
ondary cities).
4.4.3. Fleet fuel efficiency

Finally, fleet fuel efficiency in terms of passenger-kilometres per litre declined by about 20% over the decade
in the metropolitan centres and secondary cities. The decline in the former cities may be attributed to the fact
that, while the fleet size and kilometres remained substantially the same, passengers and passenger-kilometres
declined significantly. In the secondary cities, both the fleet size and kilometres, and consequently fuel con-
sumption, increased substantially, and to a much greater extent than passenger-kilometres. As with the other
productivity measures, passenger-kilometres per litre was significantly lower in the secondary as compared to
the metropolitan cities. This is because, whereas the metropolitan centre fleets had only five times the buses,
and operated as many times the revenue kilometres (in 2000–01 for example), they carried nearly eight times
the passengers and passenger-kilometres as their secondary city counterparts. Interestingly, while the second-
ary city operations performed significantly worse in terms of passenger-kilometres per litre, their performance
in terms of km/l was better than that in the metropolitan centres, as shown in Table 5. This is not surprising,
given the lower passenger loadings in the former, but once again, this shows the importance of choice of mea-
sures. In this regard, note also that for both the metropolitan centre and secondary city operations, passenger-
kilometres per litre declined far more over the decade than did km/l. This is likely because fuel consumption
reduced very little as passenger loadings dropped.
Recall that diesel cost per passenger-kilometre was consistently higher, and increased more rapidly, in the
secondary as compared to the metropolitan cities. Diesel costs per litre were higher in the former cities (by
about 13% on average in 2000–01), but this explains the higher costs per passenger-kilometre only partly.
The more important reason was that passenger-kilometres per litre were lower in the secondary cities by a
much larger extent (35% in 2000–01).
As far as individual city operations are concerned, Chennai consistently had by far the highest levels of bus
and labour productivity, and the highest or close to the highest fleet fuel efficiency on a passenger-kilometre
basis of the four metropolitan, and indeed, all eight cities. It is hardly surprising therefore that Chennai also
had the lowest personnel, diesel and overall operating costs per passenger-kilometre of all the bus transit
operations, as discussed earlier. Chennai’s superior productivity is clearly evident from Table 5, which shows
calculations for 2000–01. Mumbai’s labour productivity and fleet fuel efficiency, on the other hand, were only
slightly better than that of Kolkata (which had the worst performance), which, in combination with high unit
labour and fuel costs caused Mumbai to have the highest operating costs per passenger-kilometre of all eight
cities, as discussed. The fact that Kolkata’s productivity was the worst of all four metropolitan cities saved it
from also having the highest operating costs because it also had the lowest unit costs of all these cities. Of the
secondary cities, Thane and Ahmedabad had the highest productivity overall, with Kolhapur deteriorating
from the best in 1990–91 to the worst performer in 2000–01 (Table 5). This pattern is reflected in the operating
costs per passenger-kilometre for these cities as well.
5. Summary and conclusions – urban bus transit challenges and strategies
In our concluding section, we summarize and explore the lessons from the results of our analysis of urban
bus transit operations between 1990–91 and 2000–01, and discuss how we might address the challenge of pro-
viding viable and affordable bus transit service in Indian cities.
The urban bus transit operations studied suffered persistent losses before taxes over the 1990s, except for
Thane and Kolhapur. Inflation-adjusted losses on a per passenger-kilometre basis declined in the metropolitan
centres, despite a 17% decline in passenger-kilometres. Meanwhile, these losses more than doubled in the sec-
ondary cities, despite increased passenger-kilometres. In the metropolitan centres, operating costs per passen-
ger-kilometre increased in real terms, but less rapidly than traffic revenues. Both operating costs and traffic
revenues per passenger-kilometre were consistently higher in the secondary cities than in the metropolitan cen-
tres. While traffic revenues increased at the same rate as in the metropolitan centres, operating costs per pas-
senger-kilometre increased more rapidly in the secondary cities after 1995–96.
Costs related to personnel were pre-dominant, followed by diesel costs. Both these components registered a
sharp increase in percentage share of total costs, and on a passenger-kilometre basis, beyond 1995–96. Diesel
and material costs per passenger-kilometre were consistently higher in the secondary cities compared to the
metropolitan centres. While personnel costs per passenger-kilometre increased at the same rate as in the
metropolitan centres, diesel costs increased more rapidly in the secondary cities. Indeed, diesel costs accounted
for a higher share of total costs in the secondary cities in 2000–01 relative to 1990–91, whereas personnel costs
did so in the metropolitan centres.
Personnel, diesel and material costs, which form the bulk of total costs, are in theory controllable (as
opposed to taxes and interest), but are rather difficult to control in practice. Interestingly, the unit costs for
lubricants (and bus chassis) actually declined over the decade in real terms, and quite significantly (by 60%)
for tyres, tubes and flaps. Meanwhile, the costs per litre of diesel, which were only marginally higher in the
metropolitan centres than in the secondary cities in 1990–91, increased by 40% in the former, and even more
steeply, by more than 60%, in the latter. On the other hand, the daily employee wages increased nearly 70% in
the metropolitan centres, but by only 14% in the secondary cities (calculations based on CIRT (1992, 1997,
2002) and Ministry of Labour and Employment, 2006). This explains in part why personnel and diesel costs
increased, but material costs declined on a passenger-kilometre basis.
The other important, and controllable, component of operating costs is productivity. In the metropolitan
centres, bus and labour productivity and fleet fuel efficiency on a passenger-kilometre basis declined between
1990–91 and 2000–01. These declines were largely due to declining passenger-kilometres (and passengers car-
ried), rather than an increase in inputs (the buses held were nearly the same, and there were fewer employees in
2000–01 relative to 1990–91). In the secondary cities, bus and labour productivity declined marginally, despite
passenger-kilometres increasing over the decade. Despite this increase, fleet fuel efficiency in litres per passen-
ger-kilometre declined by the same proportion as in the metropolitan centres.
As importantly, bus and labour productivity and fleet fuel efficiency were significantly lower (by 30–35% in
2000–01) in the secondary cities compared to the metropolitan centres. This is very likely due to increased
returns to scale in relation to these resources in the metropolitan centres, but also, the secondary city opera-
tions appear, as evidenced by their significantly lower load factors, to have been unable to get as many pas-
sengers on the buses that they operate as their metropolitan counterparts. Indeed, even as their bus fleets
increased, travelled more kilometres, consumed more fuel, and employed more people, the secondary city
operations actually carried fewer passengers in 2000–01 relative to 1990–91. The higher operating costs per
passenger-kilometre in the secondary cities are due more to lower productivity than higher unit costs.
There are unfortunately several obstacles to improving productivity and fleet fuel efficiency. As for labour
productivity, labour laws are a critical factor (Pucher et al., 2004). In terms of fleet fuel efficiency, engine and
vehicle technology are obviously critically important, but so also are the quality of vehicle maintenance, oper-
ating conditions, driver training, and control over fuel supplies. There are also other important contextual fac-
tors that constrain the effectiveness of bus transit systems. The fact that buses are built on truck chassis, and
operate in dense, mixed traffic, slows them down and affects service levels, besides compromising safety. This
situation is only exacerbated by poor vehicle maintenance, partly due to poor financial performance.
Traffic revenues, the other side of the financial performance coin, may appear to be easier to address than
operating costs, but there are constraints here as well. In the metropolitan centres, they in fact grew in real
terms between 1990–91 and 2000–01, and despite a significant decline in passenger-kilometres, meaning that
average passenger fares per kilometre grew substantially (in fact by 68%). In the secondary cities, average pas-
senger fares increased less rapidly, but were consistently higher, than in the metropolitan centres (by 27% in
2000–01). Further, very high proportions of operating costs are already recovered through passenger fares;
these rates are much higher, and by implication, government subsidies much lower, than in many high-income
countries – in Montreal, where the authors work, the recovery rate is 54% (STM, 2004). In the metropolitan
centres, the recovery through passenger fares increased over the decade. In the secondary cities, there was a
decline beyond 1995–96, but the recovery rates were consistently higher than in the metropolitan centres
(and in Thane, consistently 100% or higher).
There are two important reasons why passenger fares cannot be increased substantially, apart from the
political costs of doing so. It is already difficult to keep bus passengers from switching to M2W vehicles,
and to get M2W vehicle users to commute by bus, given the growing urban incomes, poor bus service, low
marginal costs of M2W vehicle use, and the other advantages of these vehicles relative to buses. These diffi-
culties will likely only increase as fares are raised. Just as importantly, higher fares would further exacerbate
access and mobility for the many who already cannot afford them. It is likely, as evidenced by the trends in
passengers carried, that precisely these effects have been occurring; in other words, that the urban bus transit
services have been losing passengers, without being able to add new ones, even as bus capacity increased. If
this is the case, it is likely that transit ridership is stagnating and transit shares are declining, with exacerbated
impacts associated with rapidly increasing personal motor vehicle use.
In short, urban bus transit in India faces a ‘‘viability–affordability’’ dilemma. While the lack of financial
viability constrains the ability to maintain, let alone enhance, coverage and service, improving financial via-
bility is difficult because of the challenges associated with reducing costs, and also because increasing revenues
by raising fares can lead to reduced ridership while simultaneously affecting affordability, as was demonstrated
for the metropolitan operations. These effects can occur even as bus capacity and human resources are
increased, as in the case of the secondary city operations, in particular Kolhapur, post 1995–96. The ‘‘viabil-
ity–affordability’’ dilemma is made more acute by the large accumulated losses, and the reduced government
contributions to urban transit. The capital available for investment, including government contributions and
loans from financial institutions, were lower in real terms in 2000–01, relative to 1990–91. The consistently
poor financial performance, made worse by declining government support, leads to a vicious spiral in which
poor service levels contribute to declining ridership and accelerated personal motor vehicle use, which in turn
further compromise bus service levels. As the elites increasingly abandon bus service, the support for funding
it also erodes.
Small and medium-sized cities face a particularly serious challenge in providing viable public transit. As
noted, the bulk of the urban growth is occurring in these cities, in which the urban transport situation and
the infrastructure and institutional resources required to address it are more stressed than in the metropolitan
centres. Also, personal motor vehicles, especially M2W vehicles, are growing more rapidly nationally than in
the major cities. While the lower bus and labour productivity in the secondary cities are likely due to scale
effects resulting from their lower passenger-kilometre levels, as discussed, there are important factors influenc-
ing bus transit performance that are particular to these cities – for example, their lower employee but higher
diesel costs, and lower road space, relative to the metropolitan centres. More importantly, our calculations,
based on CIRT (2002), show that government contributions per passenger-kilometre in the secondary cities
were about one-seventh of those in the metropolitan centres (in part explaining the fact that passenger fares
were much higher in the secondary cities).
Pucher et al. (2004) point out that when carefully designed, implemented, and regulated, privatization of
urban bus services, which can take many forms, has the potential for significantly improved productivity,
lower operating costs per passenger-kilometre, higher cost recovery through fares, and improved profitability.
Indeed, given the poor state and performance of bus transit, and the need for continuous infusions of financial
resources, some cities have turned to the private sector to expand service. Delhi’s case has been discussed;
Kolkata has about 1800 private buses, and certain routes and services have been privatized in Bangalore
and Hyderabad (Pucher et al., 2004). Bus rapid transit (BRT) systems operating on dedicated busways are
a promising means of improving service to maintain and enhance ridership, since such systems offer high
line-haul capacities, at significantly lower costs than urban rail.
Measures such as privatization and BRT have an important role, but can only go so far in addressing the
challenges faced by bus transit in Indian cities. The lower costs and higher profitability of private bus transit
suppliers are often achieved by avoiding less profitable routes, and through lower wages and job security for
their employees. Our calculations for the private service (under DTC management) in 2001 in Delhi, based on
CIRT (2002), show that, although this service operated more buses, it carried fewer passengers than DTC. A
breakdown of costs was unavailable for the private service, but we estimate that its operating cost was about
60% of that of DTC. Given that the private service was operating a larger fleet over more kilometres, it is likely
that the lower operating costs were largely achieved through personnel cost savings. Implementing, co-ordi-
nating and regulating private services is easier said than done, especially on a city-wide basis. Privatization
often does not achieve intended results in practice (Haider and Badami, 2004). And in any case, private sup-
pliers are unlikely to operate unprofitable routes. As for BRT, it is likely to be feasible only for some routes,
and not all cities may be able to accommodate or afford it.
We are therefore left with the challenge of providing effective, efficient, affordable and safe conventional
public bus transit to cater for rapidly growing mass mobility needs on a city-wide scale – note in this regard
that Indian cities are growing most rapidly in their peripheries, where transit service is exceedingly poor. While
there is a perception that publicly owned utilities are inherently inefficient, Chennai’s public bus transit had by
far the lowest and most slowly growing operating costs per passenger-kilometre of all metropolitan opera-
tions, achieved through the highest productivity and fleet fuel efficiency, in turn allowing it to maintain by
far the lowest and most slowly growing fares of all eight cities studied. As a result, even as ridership in the
other metropolitan centres was falling, Chennai’s ridership was increasing continuously. It would be instruc-
tive to try and learn how and why Chennai (and Thane, among secondary city operations) have performed so
much better than their counterparts. More generally, Chennai and Thane show the critical importance of pub-
lic transit governance and reform.
In relation to the ‘‘viability–affordability’’ dilemma, the question is, how can bus service be made affordable
for the masses, while also being financially viable? This dilemma may be resolved by following a disaggregated
approach, based on an understanding of the needs, attitudes and motivations of various groups in relation to
public transit. High-income commuters are likely not to switch from personal motor vehicles to public transit,
however attractive it might be. Meanwhile, low-income commuters are likely to use public transit, however
unattractive, because they lack other options. In the middle are commuters who use personal motor vehicles,
but would be willing to use public transit if it were made more attractive, or those who use public transit, but
would switch to personal vehicles, if public transit service were to deteriorate. It is this group, along with low-
income users, that should be the focus of public transit policy and planning. While fares for financial viability
can affect affordability, bus service designed for affordability would likely not be attractive to this target group.
The solution may be to provide high quality service to cater for this group, and use revenues from this service
to subsidize lower level but adequate (and affordable) service for the general population.
A considerable number of urban commuters would be willing to use, and able to pay for, high quality bus
transit service providing improved reliability, frequency and comfort, and lower journey times. Transfer to
high quality bus transit service would most likely occur, and should therefore be primarily sought for, medium
to long work trips, since the perceived benefit of switching from motor vehicles would be highest, given that
buses are the most crowded, and the time costs of travel are high, for these trips. The predominance of work
trips, the significant proportion of these trips that are performed by bus in motor vehicle owning households,
the fact that these trips are typically conducted by people travelling alone, and the demonstrated willingness of
car and M2W vehicle owners to pay for the already existing limited-stop, reserved seating buses, demonstrates
the importance of quality bus services in facilitating this mode transfer and reducing personal vehicle use for
work trips.
In order to improve the quality of bus service generally, it would be essential to address the conditions
under which buses operate. One answer to the challenge of mixed traffic in dense settings is of course to imple-
ment, wherever appropriate and possible, BRT systems operating on dedicated busways. But much higher lev-
els of service can potentially be achieved with the existing infrastructure provided it is used efficiently, as
Tiwari (2002) has pointed out. Wherever road space is not constrained, but especially in new developments,
roads should be designed to provide segregated facilities for pedestrians, cyclists, buses and faster moving
motor vehicles. Doing so would enable increased use of non-motorized modes, while also making bus service
more effective, and therefore more attractive. Another innovation that would significantly improve bus service
levels are low floor buses, which transit operators should work with bus manufacturers to implement. Finally,
rather than using the same size buses fleet-wide, operators and manufacturers should collaborate to develop
bus types for different applications.
Efforts to improve urban bus service rely on, and should therefore be conducted in tandem with, policies to
restrict motor vehicle ownership and use. Since there are no dedicated taxes earmarked for the purpose, public
transit funding, which has to compete with other urgent needs, is uncertain, making planning difficult (Pucher
et al., 2004). Taxation of motor vehicle use rather than only ownership is an effective instrument for funding as
well as increasing the attractiveness of public transit. Internalizing the costs of motor vehicle use would render
public transit more attractive by increasing supply and increasing the marginal cost of motor vehicle use rel-
ative to transit, and also by curbing motor vehicle use, which would make transit more effective in mixed traf-
fic. One important aspect of motor vehicle use that has received scant policy attention in Indian cities is
parking. Difficult as it is, especially in relation to M2W vehicles, parking control and charges would be useful,
not only as a means of funding public transit, but also freeing up road and sidewalk space to render traffic
flow, for all modes including buses, more efficient.
These and many other creative approaches will be needed to sustain the vitality of bus transit systems to
meet rapidly growing mass mobility needs in Indian cities over the coming decades.
Acknowledgements
The first author is grateful to the Social Sciences and Humanities Research Council of Canada, and the
Research Grants Office of McGill University for funding support. We thank Mr. O.P. Agarwal, Ministry
of Urban Development, Government of India for discussions on public transit policy and planning.
References
Badami, M.G., 2005. The urban transport challenge in India: considerations, implications, and strategies. International Development
Planning Review 27, 169–194.
CIRT, 1992. Performance Statistics of State Transport Undertakings 1989–90 and 1990–91. Central Institute of Road Transport, Pune,
India.
CIRT, 1997. State Transport Undertakings – Profile and Performance 1994–95 and 1995–96. Central Institute of Road Transport, Pune,
India.
CIRT, 2002. State Transport Undertakings – Profile and Performance 2000–2001. Central Institute of Road Transport, Pune, India.
CPCB, 1996. Ambient Air Quality – Status and Statistics (1993-1994). Central Pollution Control Board, New Delhi, India.
CPCB, 2004. Ambient Air Quality Data. Central Pollution Control Board, New Delhi, India. Available at http://www.cpcb.nic.in/.
Delhi Metro Rail Corporation, 2006. Official website. Available from: <http://www.delhimetrorail.com/index.htm>.
Haider, M., Badami, M.G., 2004. Public transit for the urban poor in Pakistan: Balancing efficiency and equity. Paper presented at the
Forum on Sustainable Infrastructure and Service Delivery for the Urban Poor, New Delhi, organized by the Woodrow Wilson
International Center for Scholars (WWICS), June 24–25. Available from: <http://www.wilsoncenter.org/index.cfm?topic_id=
1410&fuseaction=topics.documents&group_id=61692>.
Kenworthy, J.R., Laube, F.B., 1999. Patterns of automobile dependence in cities: an international overview of key physical and economic
dimensions with some implications for urban policy. Transportation Research Part A 33, 691–723.
Ministry of Finance, 1997. The Economic Survey of India. Government of India, New Delhi, India.
Ministry of Labour and Employment, 2006. Labour Statistics. Government of India, New Delhi. Available from: <http://
labourbureau.nic.in/schemes.html>.
MMRDA, 2006. Mumbai Urban Transport Project. Mumbai Metropolitan Region Development Authority, Mumbai, India. Available
from: <http://www.mmrdamumbai.org/projects_mutp.htm>.
Mohan, D., Tiwari, G., Saraf, R., Deshmukh, S.G., Kale, S.R., Wadhwa, S., Soumitri, G.V., 1997. Delhi on the Move 2005: Future Traffic
Management Scenarios. Report prepared for CPCB. Indian Institute of Technology, New Delhi, India.
MORTH, 2004. Motor Transport Statistics. Ministry of Road Transport and Highways, New Delhi, India. Available from: <http://
morth.nic.in/mts.htm>.
NCTD, 2002. Economic Survey of Delhi 2000–2001. Government of the National Capital Territory of Delhi, India. Available from:
<http://delhiplanning.nic.in/Economic%20Survey/Ecosur2001-02/Ecosur2001-02.htm>.
NCTD, 2004. Motor Vehicle Statistics. Government of the National Capital Territory of Delhi, New Delhi, India. Available from:
<http://transport.delhigovt.nic.in/info/info8.html>.
Pucher, J., Korattyswaroopam, N., Ittyerah, N., 2004. The crisis of public transport in India: overwhelming needs but limited resources.
Journal of Public Transportation 7, 1–20.
RITES/ORG, 1994. Household Travel Surveys in Delhi. Rail India Technical and Economic Services Limited and Operations Research
Group, New Delhi and Baroda, India.
SIAM, 2002. The Indian Automobile Industry – Statistical Profile 2000–2001. Society of Indian Automobile Manufacturers; New Delhi,
India.
STM, 2004. Annual Report. Société de transport de Montréal, Montréal, QC, Canada.
Tiwari, G., 2002. Urban transport priorities – meeting the challenge of socio-economic diversity in cities: a case study of Delhi, India.
Cities 19, 95–103.
UN Population Division, 2002. World Urbanization Prospects – The 2001 Revision, Data Tables and Highlights. United Nations, New
York, NY.

Analysis of public bus transit performance in major Indian cities

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Analysis of public bus transit performance in major Indian cities

Uploaded by

Copyright:

Available Formats

Transportation Research Part A 41 (2007) 961–981

An analysis of public bus transit performance in Indian cities

Received 2 July 2006; accepted 20 June 2007

1. Introduction – Rapid motor vehicle growth and impacts

1.1. Urban transport prospects

2. The importance of bus transit

2.1. The present state of bus transit

3. Rationale, scope and methodological approach

3.1. Data and related issues

3.2. Analytical framework

3.3. Choice of measures

4.1. Bus transit provision

4.2. Service utilization

M.G. Badami, M. Haider / Transportation Research Part A 41 (2007) 961–981

4.3. Financial performance

Fig. 2. Passengers carried by public bus transit, 1990–91 to 2000–01.

Fig. 3. Public transit bus loading, 1990–91 to 2000–01.

4.3.1. Traﬃc revenue and operating cost per passenger-kilometre

4.3.2. Operating cost recovery through fares

Fig. 5. Recovery of operating cost through traﬃc revenue, 1990–91 to 2000–01.

4.3.3. Breakdown of bus transit costs

Fig. 6. Share of various costs, metropolitan cities, 1990–91 to 2000–01.

Fig. 7. Share of various costs, secondary cities, 1990–91 to 2000–01.

4.4. Bus and labour productivity, and fuel eﬃciency

4.4.1. Bus productivity

4.4.2. Labour productivity

4.4.3. Fleet fuel eﬃciency

5. Summary and conclusions – urban bus transit challenges and strategies

You might also like