Efficient and affordable public transport is a crying need for the cities of India today. Of the 5,100 plus cities and towns, over one third do not even have a public bus transport service. Indore??one of the fastest-growing regional hubs for trade and commerce in central India, and the largest metropolitan city in Madhya Pradesh with population of close to 30 lakh?was one such deprived city until only 4 years ago. The only means of ?public transport? were 550 private mini-buses, 500 tempos and 10,000 odd auto-rickshaws.

Thanks to an innovative public private partnership launched in 2006, Indore today has 104 buses covering 24 routes in the city and carrying 1 lakh passengers every day, which is a very good beginning. An additional stock of 124 new buses has already arrived as part of the fiscal stimulus package of the Government of India under the JNNURM, and buses plying on the streets of Indore will be more than doubled next month.

Indore City Transport Services Limited (ICTSL) was set up in December, 2005 by the Indore Municipal Corporation and the Indore Development Authority to operate and manage the public transport system in Indore with private sector participation. ICTSL has entered into public private partnership with private bus operators and marketing agents, established 300 bus stops on a BoT basis in association with the Indore Municipal Corporation, set bus fares in consultation with its private partners and installed modern mechanisms of service monitoring such as the Global Positioning System (GPS).

Six bus operators were selected through a process of competitive bidding in December, 2005 and licences were issued to them for specified routes within the city for a period of five years. A fleet of 37 buses was purchased by the private operators through bank financing, facilitated by ICTSL. The service started on the 26th of January, 2006. A central control room tracks all buses?including their location, speed and timings?thanks to GPS. By installing the Passenger Information System (PIS) at all bus stops, an LED monitor displays the bus number, scheduled time and the expected time of arrival of the next bus at every bus stop. The result is a significant transformation in the bus transport scenario in the city.

There have been 3 fare revisions in the past 4 years. The most commonly used instrument is the monthly pass (priced at Rs 420), which allows unlimited travel for a month on any bus on any route. Daily passes are also marketed for use on all buses within the day. For the pay-as-you-ride tickets, conductors print tickets with palmtop machines. The Indore Municipal Corporation provides fare subsidy to ICTSL for the elderly and the poor.

Except for the initial paid-up capital of Rs 25 lakh for ICTSL, the city bus service of Indore has paid for itself and for the support infrastructure that had to be put in place. The net profits of ICTSL have gone up from Rs 34 lakh in 2006-07 to over Rs 1 crore in 2009-10.

Each private operator has entered into a public private partnership agreement with ICTSL within a common framework of revenue sharing and other specified terms and conditions. The main sources of revenue for ICTSL are the bidding amount by private operators, its share of advertising revenue and of the fare collection from passes. The revenue-sharing mechanism allows 20% of the pass revenue and 40% of the advertising revenue to ICTSL. Besides getting the remaining share of the revenue from the passes and advertising, the private operators keep their daily fare collection.

Marketing of the service is done through a vendor who has the responsibility of selling passes. Fifteen kiosks have been set up from where the monthly and/or daily bus passes are sold. The software for the vending machine is the property of ICTSL and the password is with ICTSL. Of the 20% revenue from bus passes retained by ICTSL, 12.2% is kept by ICTSL on a new pass and 17% on a renewed pass, while the remaining amount goes to the vendor for marketing and managing the delivery of passes. The vendor has given a guarantee to ICTSL of issuing at least 15,000 passes every month, which ensures a monthly income of Rs 40 lakh to be shared between ICTSL and the bus operators.

The buses are colour-coded for different routes. The staff wears common uniform. The drivers have been trained by engineers from Tata Motors, while conductors are trained by the faculty of the Institute of Management Studies on customer service. The Traffic Department provides training on traffic rules and driving styles. All buses are parked at the common premises. The uniformity across the operations has meant that most people are not even aware that there are different operators on different routes.

Of the 6 operators appointed in 2006, only one defaulted on payments and failed to adhere to the route schedules. Evidence from the GPS tracking system was used to prove the service defaults of the operator and the same has been produced as evidence in Court. The services of the operator have been terminated and a new tender has been issued for the routes that the defaulting operator was plying. The monitoring capability of the GPS technology made this possible, which justifies the high maintenance cost of the GPS/PIS (close to 55% of the total costs of ICTSL) to attain service standards.

Maintenance of the buses has been a weakness, which could undermine the sustainability of this public private partnership model. Fortunately, this is being corrected in the second phase. Vivek Shrotriya, CEO of ICTSL explained that in the first phase, the private operators entered into Annual Maintenance Contracts (AMCs) with Tata Motors for the first year but this was not continued in subsequent years as AMCs always become costlier with the passage of time. In the new contracts, maintenance is mandatory. ICTSL is building the physical infrastructure for workshops and the operators will contribute the equipment for maintenance and repairs at these workshops.

Much also remains to be done through better construction of new roads and proper maintenance of existing roads. But a foundation has been laid, and the public transport system can build on this foundation. For example, ICTSL has received a major grant under the World Bank?s Global Environmental Facility for the development of Traffic Signal Control and Automatic Fare Collection System. Also, a BRTS pilot corridor of 11.6 km is underway at a cost of Rs 98 crore for a proposed project that is 106 km long and costs Rs 868 crore, and it is expected to usher in greater change.

For too long we have neglected public transport in our cities. With the challenges of traffic congestion, pollution and environment staring at us, how much longer can we wait? Indore has shown us a way.

Isher Judge Ahluwalia is chair of Icrier and chair of the high powered expert committee on urban infrastructure. Ranesh Nair is a consultant to the committee. Views are personal

This is the 8th in a monthly series on urban infrastructurepostcardsofchange@expressindia.com