The road transport and highways ministry has decided to set up an independent regulator to improve public transport in the country. The prime task of the regulator, as being conceived by the ministry, would be to separate the decisions on passenger fares from politics and make state transport corporations self-sustainable.
Initially, the central regulator will frame the fare structure for the entire country but states may be asked to set up their respective independent regulators at a later stage. At present, the road ministry has a regulatory body for the highway sector, namely National Highways Authority of India, but decisions on fares in public transport is taken by state governments.
The decision comes at a time when the central government is debating decontrol of diesel prices in view of rising crude oil rates in the international market. Crude oil is up 29% since mid-February at $109 a barrel. If implemented, the decontrol of diesel prices will shake the finances of road transport corporations of states, which are already in huge losses due to non-revision of fares since last many years. Even if the fares are revised, the increase is not enough to set off the operating costs, including fuel.
Road ministry is the latest among infrastructure ministries to have planned an independent regulator. The shipping ministry had last month issued a draft Port Regulatory Authority Bill, 2011 for establishment of an autonomous institution to regulate the port sector, while coal ministry is also working towards setting up such a body. Power and telecom sectors are already governed by Central Electricity Regulatory Commission and Telecom Regulatory Authority of India, respectively.
?The non-action on passenger fares is plaguing the public transport sector. In states like Kerala, fares have not been revised for a decade. Having an independent regulator is expected to bring health to state transport corporation by making decision on fares non-political,? Saroj Kumar Dash, joint secretary, the road ministry, told FE.
While the ministry has made up its mind, it still has to create a consensus among states. For this purpose, it will take the proposal of setting up the regulator to states next month for discussion. Officials in the ministry reckon that the path ahead is not going to be easy. ?States may not back the proposal for fear of losing the chance to get political mileage if the body is set up,? a senior official said requesting anonymity.
However, state transport corporation have welcomed the proposal. ?Decision on fare makes no logic at present. We have to charge only R25 a passenger for a 105 km route, making us a cheapest service of the world in this category. If the regulator is set up, I hope fares would be revised frequently. Moreover, the regulator would act as a body where we can raise our grievances,? Delhi Transport Corporation?s senior manager (public relations) VK Agarwal said. Delhi Transport Corporation is suffering an operational loss of R5-7 per kilometre.
Karnataka State Road Transport Corporation has an accumulated loss of R67.75 crore as on date, while Kerala State Road Transport Corporation suffered a loss of R14 crore in 2008. Profit of Uttar Pradesh State Road Transport Corporation in 2010 came down 40% to R33.35 crore in comparison to the year earlier.