TN finally bites the pill

Its inflation every where - the value of every commodity - except currency - has appreciated in the recent times. Petro Cos announce price hike as if they were calling in at an auction - One increases the cost by Rs 2 today, the next Co responds next month with a Rs. 2.50 hike and so on. I still have a copy of a bill for refueling diesel at Rs. 9 a litre (that was back in 1996/7 period)! With the cost of fuel increasing almost on a daily basis, every transport corporation in the country revised their ticket rates. The State Government of Tamil Nadu were hesitant to increase fuel prices since a very long time - a hike in prices would hit their vote banks badly - who cares of the health the Transport Cos. For every loss they make, it is the Common man who has to fund by the way to increased taxes.

Fares of buses in TN was hiked last in 2001 - the price of diesel has doubled since. TN buses charged 28 paise a Km (For Ordinary/City/Town buses) and 32 Paise a km (Mofussil buses). Now, the new government of TN has finally decided to bite the hard pill, and open their eyes to reality - keeping the fares artifically low has cost a lot on the Transport Corporations. Transport Companies in the TN were among the best in efficiency, maintenance, punctuality, reach and what not - they've slipped down on many counts now. Corporations (in TN, there are 8 transport corporations - the Chennai City operator MTC, the pan-state long distance operator TN-SETC and finally 6 TNSTCs controlling short distance services and town services) were adopting backdoor methods to collect higher fares - they introduced "branded" services which charged upto twice the rates of regular buses (I had blogged about this earlier - read here).

Finally after almost 10 years of downward roll, the state government of TN has finally decided to hike rates - a good hike as well. They've almost doubled rates (not exactly though) for their services. The ordinary buses would now cost you 42 paise a km (up from 28ps), while the mofussil buses would cost 56 paise a km (up from 32 ps). Now, I'd call these fares realistic - they reflect today's operating costs. This hike might perhaps give the most required Vitamin-M for the corporations in TN.
These tickets would now be history - the minimum fare in TN is being hiked to Rs. 3. The above ticket cost only Rs. 2!!!

A short comparision of fares with other transport corporations in South India (and Maharashtra too) would give an idea of how the fares are in other places. The fares are as below: (all fares are Paise per Km)

Tamil Nadu: Ordinary 42 ps, Express 56ps, Super Deluxe 60ps, Ultra Deluxe 70ps.
Kerala: Ordinary 55ps, Fast Passenger 57ps, Super Fast 60ps, Super Express 65ps, Super Deluxe 75ps, AC 90ps, Volvo 110ps
Karnataka: Ordinary 69ps, Express 75ps, Semi-Deluxe 80ps, Super Deluxe 107ps, Hitech 117ps.
Andhra Pradesh: Ordinary 50ps, Express 62ps, Deluxe 70ps, Super Luxury 82ps, Volvo 140ps
Pondicherry: Express 27ps, Deluxe 75ps, AC 150ps
Maharashtra: Ordinary 80ps, Night Services 93ps, Semi-Luxury 107ps, Sheetal 142ps, Shivneri (Volvo) 198ps

I'd discount the fares in Pondicherry since all the territories of Pondicherry are very small - the fares charged in Pondy would not make much of a difference for inter-state vehicles. The lowest ordinary fares are still in TN (42 Paise), while Andhra follows them at 50ps. The highest is in Maharashtra at 80ps. Ordinary fares are an indicator of the state's transport business - since its ordinary buses that are used the most by daily commuters.

The Karnataka government gives a more free hand for their operators when it comes to fixing prices for premium services - the fares for Volvo/Mercedes buses can be decided by the operator without the consent of the government - this gives the operator more flexibility in operating services. They can charge high when the demand is high and charge low when the demand is low and thereby attract more passengers. 

Keeping ordinary fares low is a great idea - since it benefits daily passengers a lot. In Kerala, even Ordinary fares are not spared - mainly because a good share of the public transportation scene is handled by private operators, who operate mainly on Ordinary permits. In the two states where ordinary fares have been kept low (TN and AP), the transportation scene is ruled mainly by Government operations. With this hike in fares in TN, operators of other states would be less scared to operate to TN. In the earlier scenario, other state operators had to operate to/through TN charging very low fares. Take the following example:

The Ernakulam-Bangalore route - there are three different routes between these two cities. The first route goes via Coimbatore-Hosur, the Second via Thrissur-Nilambur-Gudalur-Mysore and the Third via Kozhikode-Bathery-Mysore. In the first and second routes, the buses would have to travel through TN. Let us take an example of an imaginary Super Express of Kerala SRTC running between the two cities, in all the three routes.

In Route 1: Via Coimbatore - the bus would travel 171 kms in Kerala, 358  kms in TN and 35 kms in Karnataka. (Total Kms: 564) The bus would be able to charge an end-to-end fare of Rs. 277 (Kerala rounds off its fares to the next multiple of 5, so the fare would be Rs. 280). Breakup of the fare would be Rs. 111.15 for the 171kms in Kerala (@65 ps/km), 136.04 for the 358kms in TN (@38ps/km - SD Fares) and 29.87 for the 35 kms in Karnataka (@85 ps/km - Semi-Deluxe fares).

Route 2: Via Gudalur-Mysore - the bus would travel 229.9 kms in Kerala, 38 kms in TN and 238 kms in Karnataka (Total Kms: 505.9). The end-to-end fare would be Rs. 367 (rounded off to Rs. 370). The breakup would be Rs. 149.4 for 229.9 kms in Kerala, Rs. 14.44 for 38 kms in TN and Rs. 366.17 for 238 kms in Karnataka.

Route 3: Via Kozhikode-Mysore - the bus travels 329 kms in Kerala and 236.2 kms in Karnataka. Total kms: 565.2. The end-to-end fare would work out to 414.6 (Rounded off to 415). The bus makes Rs. 213.8 for the 329kms in Kerala and 200.77 for the 236.2 kms distance in Karnataka!

To summarise things - the bus earns Rs 280 for running 564 kms in Route 1, Rs. 370 to travel 505.9 kms through Route 2 and Rs. 415 for running 565.2 kms via Route 3!! So by avoiding running via TN, the bus manages to earn an extra Rs. 135!! This simple calculation explains why corporations like KeSRTC or KaSRTC were hesitant to operate "low end" services to TN, due to the unrealistically low fares. This increase in fares would also increase the availability of "low end" services to passengers on interstate routes. Hope the TN government continue with its realistic attitude, and not blindly follow vote-bank politics, which finally ruin the health of state run companies.


Sujith Bhakthan said…
well written post with good information. congrats..

Hope Kerala RTC will operate more services to/via TN.