Delhi Cabinet on Monday allowed the entry of private players to run bus services in Delhi. It decided to award the contract for the first cluster — comprising 31 bus routes — to Star Bus Services.
The transport department has divided the 657 bus routes in Delhi into 17 clusters. It proposes to have 4,400 buses run by corporates to strengthen Delhi’s public transport system.
Star Bus Services qualified for the contract through a global tender process.
Senior transport officials said the company will have to procure 232 buses to run in the city.
Officials said the company might take about six months to have its resources ready and hoped that the first cluster would become operational before the Commonwealth Games.
The transport department had proposed to pay Rs 47.42 per kilometre per bus to the private player. While the revenue earned from the ticket sales, which worked out at about Rs 20 per kilometre per bus initially, had to go to the government’s coffers.
The Delhi Cabinet had deferred the proposal in July this year citing lack of money to give subsidy to the firms.
With the new fare structure, Delhi Transport Minister Arvinder Singh Lovely said buses will earn more and the cash subsidy required to run private clusters will come down to Rs 187 crore per annum.
“We can also generate revenue by putting advertisements on these buses,” said Lovely.
The government will review the project after six months of implementation and a decision will be taken, the minister said.