Delhi: CAG flags DTC’s ‘lack of business plan’

The Aam Aadmi Party (AAP), which governed during the audit period, claimed the report vindicated its stance

The Comptroller and Auditor General (CAG), in a performance audit of on the functioning of Delhi Transport Corporation (DTC) tabled in the Delhi Assembly on Monday, flagged losses of ₹60,741 crore despite annual revenue grants from the Delhi government. The report, tabled in the Delhi Assembly on Monday, criticized DTC’s lack of a business plan and found its performance below national averages and other state transport undertakings.

The report, which covers the period of 2015-16 to 2021-22, noted that DTC did not conduct any study on the profitability or sustainability of operations. (HT Archive)

The report, which covers the period of 2015-16 to 2021-22, noted that DTC did not conduct any study on the profitability or sustainability of operations, even though it was continuously incurring losses.

“Reiterating our commitment towards transparent governance, the CAG report related to DTC was presented on the floor of the House today. Our government is continuously working to develop Delhi along with exposing all the irregularities of the previous government,” chief minister Rekha Gupta posted on X.

The Aam Aadmi Party (AAP), which governed during the audit period, claimed the report vindicated its stance, stating it confirmed there were no irregularities in DTC’s functioning. The party said it ensured affordable public transport for all.

The audit is one of 14 CAG reports that have become a political flashpoint between the Bharatiya Janata Party (BJP) and AAP ahead of the Delhi elections. These reports, covering issues such as air pollution, child welfare, liquor regulation, and healthcare, have fueled the political battle.

The new BJP government previously tabled reports on Delhi’s excise policy (2017-2022) and the city’s health sector (2016-2022).

On Monday, the BJP slammed AAP for DTC’s “accumulated losses,” alleging that the corporation was in better financial shape before AAP came to power. “DTC was supposed to operate on 850 routes but was running on only 400. Revenue dropped from ₹900 crore to ₹550 crore. AAP deliberately withheld these reports,” environment Minister Manjinder Singh Sirsa said.

What the report found

The audit found that bus fares, set by the government, had not been revised since November 2009, leaving revenue from ticket sales insufficient to cover operational costs. DTC also had outstanding dues of ₹225.31 crore from the transport department and incurred ₹63.10 crore in avoidable penalties due to an ineligible GST input tax credit.

“The operating revenue collection had a decreasing trend due to non-revision of fare and lower commuter base. No major initiatives were taken towards raising the non-operational revenue which was evident from non-recovery of rent of ₹225.31 crore on account of transfer of depots for Cluster buses, delayed decisions in awarding contracts for display of advertisements and also failure to utilise the available space at depots for commercial use... There was no laid down road map for checking the downward curve of the finances of the corporation and ensuring its fiscal sustainability,” the CAG report stated.

The audit further revealed that against a Delhi high court mandate of 11,000 buses and a minimum requirement of 5,500, DTC had only 3,937 buses in 2022, with 1,770 classified as overage.

“Fleet utilisation and vehicle productivity were below the all-India average. Scheduled kilometres were missed, and breakdowns were much higher when compared to other STUs and Cluster buses. DTC suffered a loss of potential revenue of ₹668.60 crore due to missed scheduled Kms and higher rates of breakdowns,” the audit said.

The audit also mentioned that multiple plans and proposals of DTC were either delayed by several years or failed to take off, leading to prospective losses and also preventing additional revenue for the financially ailing department. These included a project for automatic fare collection system, the installation of CCTV cameras in buses, the installation of LED screens in buses, income from advertisement contracts, ads on bus queue shelters and bus wraps, the commercial use of depot spaces by upgrading them to multi-level bus parking, the sale of scrap vehicles, and penalties.

CAG made several recommendations in the audit report and asked DTC to ensure that short- and long-term plans prescribing benchmarks, taking into account the best practices of the industry, are formulated to make DTC operations effective and sustainable.

In a statement on Monday, CAG reiterated, “The corporation needs to maximize its potential to generate non traffic revenue, explore new avenues and make all out efforts to develop pending projects for commercial use of land to improve its financial position. The Corporation needs to expedite availability of the prescribed number of road-worthy buses for operations with AMC.”

Responding the report, the AAP said in a statement, “The CAG has confirmed—there was absolutely no scam or corruption in the running of DTC. In 2021, the BJP falsely alleged a scam in the procurement of 1,000 new low-floor buses. The LG then ordered a CBI investigation forcing officers to put the proposal on hold. For years, the BJP held Delhi’s public transport system to ransom, depriving people of better services. They must apologise to the people of Delhi for this deliberate sabotage.”

It further said, “The CAG report also validates that the AAP government ensured affordable public transport by preventing fare hikes for the last 10 years and providing free travel for women. Not a single BJP state across the country has managed to do this. Now, the BJP govt in Delhi is planning to reverse both these measures, proving yet again that it is anti-people and anti-progress.”