Finance minister’s ‘game changing’ suggestion of allowing private players to operate bus services could be the final nail in the coffin for the ailing Undertaking

Looks like Union Finance Minister Arun Jaitley has unwittingly rung the death knell for the Brihanmumbai Electricity Supply and Transport (BEST) Undertaking.



BEST committee members believe that Arun Jaitley’s suggestion of allowing entry of private players in public transport system indicates privatisation of bus services. File pic

In his budget speech yesterday, Jaitley mentioned the possibility of allowing private players to operate bus services. Stating that the move would boost mass transport, the finance minister called it a ‘game-changer’.

“Passenger traffic on roads has to be more efficient for the benefit of common man and the middle class. The entry of entrepreneurs will boost mass transport,” Jaitley said in his speech.

However, the BEST administration has perceived Jaitley’s suggestion as the final nail in the coffin for an entity struggling to stay afloat due to mounting financial losses with each passing fiscal.

“The government doesn’t seem to be interested in running the BEST buses anymore. This is a clear indication of privatising bus services,” said Ravi Raja, BEST committee member.

Another committee member, Kedar Hombalkar, alleged apathy on the part on the State and the Centre to revive the BEST transport. “We have been seeking help from the state and central governments, but nothing is ever spoken about the BEST,” he added

Though the BEST sough finical aid of R355 crore from its parent organisation, the BMC, it received a paltry amount R10 crore. The amount was later augmented to R100 crore earlier last week following an uproar.

Where is the money?

Speaking to mid-day, BEST authorities claimed that the public transport body is yet to receive funds promised under Jawaharlal Nehru National Urban Renewal Mission (JnNURM). “Introduction of Transport Division Loss Recovery (TDLR) in the electricity bills will help us offset subsidises directed towards transport. But the proposal has been opposed and criticised. Moreover, we don’t get to hike bus fares regularly,” said a BEST official.

Ways to recover losses

The BEST has proposed to levy Annual Revenue Requirement (ARR) on electricity consumers in the island city, through which it plans to raise R1,384 crore annually for the next four years. Officials added while the application of TDLR on 10 lakh BEST electricity consumers for the next four fiscals will increase the electricity rate from R3.01 per unit to R7.04, its division across Reliance Infra (26 lakh), Tata Power (over 5 lakh) and MSEDCL (thousands) consumers will lead to a meagre hike of Rs 1.16 per unit.

Goodbye to permit Raj

In his speech, Jaitley also announced that the abolition of permit law would be the centre’s medium-term goal for bettering the public transport system. “This is a totally unreformed sector, which suffers from several impediments. Abolition of permit raj will be our medium-term goal. Government will enact necessary amendments in the Motor Vehicle Act and open up the road transport sector in the passenger segment,” Jaitley said.

The state government is already working on making lives simpler for app-based aggregators like Uber and Ola for which the City Taxi Scheme 2015 has been drafted. Under this scheme, owners with regular transport permit can operate their vehicles as cabs. Similarly, the amendment in the Motor Vehicle Act for the buses will make it simpler for the private players to enter the fray.

Rs 900 crore

Financial loss BEST will incur during the 2016-17 fiscal

Rs 1,300 crore

Annual loss the undertaking will suffer by 2019-20 fiscal

3,900

Number of buses that will ply across Mumbai by March-end

4,100

Original strength of the BEST fleet

32 lakh

Existing number of passengers availing BEST bus services