Opinion - News Analysis

Privatisation a thin edge of the wedge?

By P.M. Belliappa

With the decision of the Tamil Nadu Government to partially privatise road transport, the wheel has come a full circle. Prior to nationalisation, private bus operators were providing services in different cities and parts of the State. In fact, their city services were so efficient that one could set one's watch by arrival and departure of buses. The underlying presumption in the shift in policy is that the introduction of private operators will provide an equal, if not, better service, thus giving the travelling public a greater measure of comfort.

Before analysing some of the major issues involved, it will be useful to identify the causes for the decline in the quality of service provided by the State transport organisations. Apart from the oft-touted reason that the fares levied do not meet the costs of operation and provide for surpluses, one should understand why operating costs are high and cannot be managed within the fare structure. Studies of the working of State transport organisations have revealed that they suffer from many maladies such as heavy inventories, surplus manpower, poor maintenance, resulting in frequent breakdowns, thus reducing the availability of vehicles, heavy overheads, pilferage of spares, leakage of revenues and strong labour unions.

Interestingly, according to the report for 2000-2001 on the performance of State transport undertakings in the country, published by the Central Institute of Road Transport, Pune, the award for the Highest Performance in Vehicle Productivity was bagged by the State Express Transport Corporation (Tamilnadu - II). The award for Minimum Operational Cost in respect of moffusil services was given to the Tamilnadu State Transport Corporation (Coimbatore - II). Some other awards have also been won by other Corporations in the State. Inspite of this impressive track record, it has been decided to induct private operators. One has to assume that this will lead to increased public good.

From among many available options, reports in the media indicate that the Government proposes to withdraw a certain number of services in each district and substitute them with buses owned by private operators. And this is to be done on loss-making routes. It defies logic why any private operator should invest in a route that is not profitable, particularly when State undertakings would also be plying their services on the same route. It is not merely a question of introducing vehicles. There should be adequate investment to develop the necessary supporting infrastructure that will ensure that these vehicles plied in a sustained manner. It should not surprise anyone, if, eventually, there is no improvement in the quality of service. A more workable and practical proposition would be to offload a package of `paying-routes' and `loss-making' ones, thus giving the private operator the required incentive to invest. On the question of viability of operations, experience has shown that city services are generally not lucrative. It is only a combination of city services and long distance operations that make a viable proposition.

Another important aspect is one of `timings'. There are certain timings when buses carry a full load of passengers. At other timings on the same route, the bus is almost empty. Experience has shown that private operators jostle furiously for permission to ply at favourable timings. Adequate safeguards should be taken to ensure that the State-owned services are not left carrying the can. There should be a fair distribution of the elements between the State and private owned services. It is best that these matters are decided by a quasi-judicial body to ensure objectivity and transparency, and more importantly, to deflect criticism of having shown favours.

Future of workers

An important aspect of this policy change is the future of workers who would be rendered redundant on the government side. VRS solves problems only partially. Cash in hand is not always the best option if the recipient has no idea of how to make sustainable investments. Counselling on these issues will help. But efforts should be taken to ensure that prospective employers absorb as many redundant workers as possible. If some element of retaining is required, the government should assist.

While it is hoped, it should not be assumed, that the mere induction of privately-owned buses will result in sustained improvement in the comfort levels for the travelling public. There are many instances which show that private operators with little social responsibility have cancelled services at will, leaving the hapless public in the lurch. Repetition of such incidents in the future cannot be ruled out. There should be in place watchdog committees under the chairmanship of the District Collector to monitor the quality of service provided to the public. Wherever required, corrective action must be taken promptly.

Finally, the management structure to handle the remaining government operations should be reviewed very critically, to ensure that there is in place a lean and efficient system.

This is possible by centralising certain decision-making areas such as personnel, procurement, finance, and labour relations, and correspondingly providing ample delegation of powers to the operating levels.

In this age of computerisation and e-governance it is within the realm of possibility to secure all this.

Otherwise, an elephantine structure will only perpetuate the present ills and pave the way for more privatisation, making the present beginning, only the thin edge of the wedge.

(The writer is a retired IAS officer and former Director, State Transport, Govt. of Tamil Nadu)

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