DTC runs a loss of Rs 3 crore every day, needs funds to keep fleet going

The Delhi Transport Corporation (DTC) is losing Rs 3 crore every day, hamstrung by dogged political resistance to increase fares and an absence of creative alternative ways to generate revenue.
A recent CAG report said that DTC has never been in profit since it was established in 1948.(Sonu Mehtaa/Hindustan Times)
A recent CAG report said that DTC has never been in profit since it was established in 1948.(Sonu Mehtaa/Hindustan Times)
Published on Jul 05, 2016 03:54 PM IST
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Hindustan Times | By, New Delhi

The Capital’s transport backbone is bleeding dry.

The Delhi Transport Corporation (DTC) is losing Rs 3 crore every day, hamstrung by dogged political resistance to increase fares and an absence of creative alternative ways to generate revenue.

None of the 574 DTC routes are profitable and the corporation is unlikely to come out of its mounting debt pile unless fares are hiked.

The DTC has the lowest fare among five metro cities and prices were last increased seven years ago. This has resulted in the city’s public transporter to register the highest losses among all metropolitan bus services in India.

“The main components of the operating cost are wages and salaries accounting for 62% of the total operating cost, fuel (CNG) which accounts for nearly 21% and annual maintenance which accounts for nearly 11%,” said a DTC report.

In 2009 when fares were last revised, the cost of CNG was R 19 per kg, which has now doubled.

A report by the Comptroller and Auditor General said the DTC has incurred losses since it was set up in 1948. The Delhi government’s loan to the corporation stood at R 11,164.84 crore till March 31, 2011.

Between 2012 and 2015, the city administration released a further R 3164 crore as grants-in-aid to meet the working deficit of the corporation.

“Despite getting financial assistance, the corporation did not make adequate efforts to improve its operational efficiency to reduce losses,” the report said.

Officials point the finger at the state government that has allegedly refused to raise fares despite several requests. Experts say fares should be revised automatically based on changes in fuel prices and consumer price index.

“Fare review should be conducted twice a year and must also determine the change required. By adopting this strategy it will be easy to manage gradual increase in fares that places a manageable burden on users,” said a DTC official in an internal document.

The government hasn’t considered proposals for fare revision due to socio-economic and political reasons, the document added.

Experts say the revision exercise should depend on a metric called the technical fare: The average cost of transporting one passenger.

It is calculated by dividing the total cost of operation with the total number of passengers. In the current scenario, the minimum fare should be R 16.67 per passenger while the DTC fare structure for non-AC buses stand at R5, 10 and 15.

Read: DTC bus service decays under Delhi Metro’s shadow as revival plans fail

The revenue generated by DTC at present is not adequate. The total revenue for 2014-15 is R 1,109.86 crore translating into earning per km of R38.62. Earnings from tickets constitute 65% of the total revenue while passes constitute 18% while other miscellaneous receipts constitute the balance 17% of the total revenue.

The CAG says the DTC is also facing losses by giving buses on rent to schools.

During 2010-15, R 46.11 crore was lost by providing buses to schools. Another reason for the loss is keeping extra staff. The corporation employed 1,350 drivers and 3,474 conductors on a contractual basis during 2011-15 despite having 710 and 952 surplus staff.

“The management said due to absenteeism, they engaged some additional staff to ensure buses were not held up for want of drivers and conductors. But despite having extra staff, 1,225.55 lakh kilometres were missed for want of staff during 2010-15,” the CAG report said.

The missed kilometres deprived the corporation of revenue of R 461.88 crore during 2010-15. The Audit also observed 1,888 buses of 34 depots were fined and impounded for 3,831 days during 2010-15 resulting in 738,000 kms being missed – when compared to the target set --- and loss of revenue.

The solution, experts say, is a mix of scientific fare revision and utilisation of DTC property for innovative revenue generation. The depots could be developed as multi-level complexes and the buses utilised for marketing and advertisements, they say.

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  • ABOUT THE AUTHOR

    Faizan Haidar writes on the Delhi government, city politics, transport, aviation, and social welfare. A journalist for a decade, he also tracks issues such as trafficking and labour exploitation in Delhi and other states.

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