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India Badals, Buses And Public Losses

Jan 1, 2010
A Tribune Investigation Punjab Public Transport - 1
Badals, buses and public losses
How the public transport sector was manipulated by political bigwigs at the cost of the state exchequer and the weaker sections in Punjab
Prabhjot Singh
Tribune News Service
Chandigarh, September 26
When the Lokpal of Punjab, Daljit Singh Dhaliwal, recently ordered an inquiry into the alleged illegal operation of buses belonging to private transporters of Punjab in the Union Territory of Chandigarh he was evidently looking at only the tip of the iceberg.
An investigation by the Tribune team has revealed that there is more to it than just charges of illegal operation in the transport sector. There has been over the years a serious manipulation of transport policy that has favoured private operating agencies, owned by political bigwigs, at the cost of the state exchequer, the state-owned public transport organisations and also the poor of Punjab.
Those who own private transport buses are a veritable who’s who of Punjab politics. The list includes Chief Minister Parkash Singh Badal, his son and Deputy Chief Minister Sukhbir Singh Badal, PPP President Manpreet Singh Badal, Vidhan Sabha Speaker Nirmal Singh Kahlon, BJP MLA Jagdish Saini, former Congress legislators Avtar Singh Henry, Amrik Singh Dhillon and Jasbir Singh Dimpa besides families of the late Akali legislator Kirpal Singh Libra and Congress’ Dilbagh Singh.
In his petition to the Lokpal, a Chandigarh-based lawyer Arvind Thakur challenged the permission granted in 2009 by General S.F. Rodrigues, the then Governor of Punjab and Administrator of Chandigarh, that allowed private bus operators of Punjab to extend their services to the Union Territory. General Rodrigues had reportedly permitted 73 buses belonging to Punjab private bus operators. Inspector-General of Police S L Gakhar, attached to the Lokpal, has been asked to conduct an inquiry and submit his report by November 1 this year.
The charges of illegal operation are only a tiny bone of the many skeletons in the cupboard of Punjab’s public transport sector. When The Tribune conducted an extensive survey of the transport sector of Punjab, it came across a suspiciously high growth of private buses operating in the lucrative luxury and super luxury sectors of public transport in the state. Unremunerative sectors, including services to rural and remote areas, still remain with the public sector.
As a result the two state public sector transport corporations, Punjab Roadways (PR) and Pepsu Road Transport Corporation (PRTC) are facing crippling losses. For instance, Punjab Roadways, the larger of the two state owned transport corporations, had in 2001, 2553 permits to operate on various routes and 2369 buses. By 2009-10, the number of permits declined marginally to 2327 but there was a drastic fall in the number of buses. Punjab Roadways now has only 1,568 buses — 800 less than in 2001 and its losses mounted to Rs 72.6 crores last year. In the PRTC’s case, while its permits and buses remained somewhat stable (it has 1,242 route permits and 1089 buses) it is also facing the heat from private operators. It’s losses are mounting and in 2008-09 amounted to Rs 7.57 crores.
While in 2001, state-owned buses totalled 3513, private operators had 2,766. But by 2009-10 the situation was totally reversed. While state owned buses have declined to 2657, buses owned by the private sector have grown to 3,949 - almost 1,200 more in the past decade or almost 25 per cent growth much of it coming in the last four years. The kilometres covered in these two sectors also tell the same story. While kilometres traversed by the Punjab Roadways buses have decline from 6.74 lakh kms in 2000-01 to 4.40 lakh, the kilometres logged by private bus operators have gone up from 6.82 lakh to 9 lakh during the same period.
But it’s not just the numbers that tell the story. It’s the growth in the highly profitable luxury sector as well as permits for prime time operation as highly remunerative routes that are most revealing. For instance, while PR and the PRTC have only 132 luxury buses, private operators have 203. And in the slightly better class known as integral buses, while the state owned sector has only 37 buses, the private operators have 75. And in the super-integral class, the state owned buses have been left out and the private sector has only 17 - a virtual monopoly.
Overall, in the lucrative luxury segment, while the state owned sector has only 169 buses, private sector dominate and now has 293 buses. No prizes for guessing who among the private operators dominate this sector. It is estimated that the CM and his son Sukhbir, control directly and indirectly 167 buses in the luxury sector. These luxury buses are the ones that enjoy a major tax concession which the Badal government gave in 2008 and implemented from 2009. Not surprising that it happened when they were in power.

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How the private sector has taken over public transport
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A Tribune investigation
Punjab Public Transport - 2
How the Badals hijacked Punjab’s luxury bus business
Punjab Bureau
<table bgcolor="#FFF9EA" border="0" cellspacing="0" width="540"> <tbody><tr> <td width="100%">Political BIgwigs WHO control the PRivate Transport Business
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Chandigarh, September 27
In the past five years, there has been a decisive shift in the ownership of buses for public transport. While Punjab Roadways and Pepsu Road Transport Corporation (PRTC) were the public sector behemoths that controlled almost 60 per cent of the market share a decade ago, they have since lost their share substantially to the private sector.
The situation is now reversed. Of the 7,500 buses plying on Punjab roads for public transport today, nearly 4,000 belong to the private operators giving them a 60 per cent share. Punjab Roadways, PRTC and its subsidiaries — Punbus and Kilometre Scheme — all put together have only 3,500.

It is not as though there is anything wrong with private players entering the transport sector. In fact, they have considerably improved connectivity, comfort and efficiency. The real issue is how the top state politicians especially Chief Minister Parkash Singh Badal and his son Sukhbir, the Deputy Chief Minister, have now managed to control an even larger share of the expanding private-sector pie. Also, how the transport policy has been tailored to the benefit of private operators.

In Part 1 of The Tribune investigation published yesterday, it was revealed that the private operators have benefited at the cost of the state exchequer, the state-owned public transport organisations and also the poor of Punjab.

Other than the Badals, among the private bus operators are the families of the Speaker of Punjab Vidhan Sabha Nirmal Singh Kahlon, BJP legislator Jagdish Sahni, PPP chief Manpreet Singh Badal, former Congress legislators Avtar Singh Henry, Amrik Singh Dhillon and Jasbir Singh Gill (Dimpa) besides the sitting MLA Amarjit Singh Samra (Congress) and families of former (late) legislators Dilbagh Singh Nawan Shahr and Kirpal Singh Libra.

Parkash Singh Badal in his affidavit submitted to the Returning Officer of Lambi constituency before the 2007 Assembly elections had declared family shares in Dabwali Transport and Real Estate Company and Baaz Transport Private Limited. In the 2009 Lok Sabha elections, Harsimrat Badal in her affidavit declared that her husband, Sukhbir Badal, had 28,551 shares of Rs 10 each in Dabwali Transport Company and 2,570 shares of Rs 100 each in Baaz Transport company.

Similarly, Avtar Henry had also given details of shares he and his wife hold in Kartar Bus Service, besides the 27 trucks he owns as a trucker. Jasbir Singh Gill, alias Dimpa, had also declared his shares in New Piyar Bus Service, though he now claims that he has sold his share in the family owned transport company.

In the Bathinda District Transport Office (DTO) alone, of the 440 buses registered private operators have a total of 270 buses. (Public sector transport companies have 170). These private companies operate their buses to various destinations from Bathinda to the rest of Punjab.

Officially, the Badals directly own 80 buses mainly in three companies — Orbit, Dabwali and Baaz — that dominate the Malwa region. But in the past five years they are said to have been quietly acquiring controlling interests in at least 10 other private companies and now manage their operations. They now control directly or indirectly 130 of the 270 private buses registered in the Bathinda DTO. Though Manpreet Badal and his father Gurdas, the brother of the chief minister, had shares in the transport companies held by the Badal family, a decade ago there was a family settlement and a clear division was made. Manpreet claims he now owns only three buses registered under the name of Raghuraj Transport company.

When compared to the overall number of buses that ply in the state, these numbers do not look significant. But when one looks at the luxury and super-luxury sectors, the Badals have a virtual monopoly in the Malwa region. In the super-luxury segment all the 17 super-integral buses that provide air-conditioned luxury travel on trunk routes connecting major Punjab cities with Chandigarh belong to the families of the CM and his son.

In the luxury segment, the Badal companies and other private operators dominate. A study of figures available with the four Regional Transport Authorities located in Patiala, Jalandhar, Ferozepur and Bathinda show just how much they actually control. Among the the state-owned corporations, Punjab Roadways has 84 HVAC (High Vacuum Air-conditioned Coaches) and 23 Integral buses and PRTC has 48 HAVC and 14 Integral buses. Together the public sector companies have 169 buses in this segment.
On the other hand, private operators have between them 203 HAVC and 75 Integral buses totaling 278 or two thirds of the total such buses that ply in the state. Put together the Badals allegedly control directly or indirectly 167 of the 464 luxury and super luxury buses that ply in the state equivalent to both Punjab Roadways and PRTC.

Despite concerted efforts, The Tribune reporters could not get balance sheets of private bus operators who have been growing strong financially as is reflected by the growing size of their fleet of buses and new route permits they have got during the past few years. When The Tribune reporters contacted companies controlled by the Badal they refused to comment on either their holdings, the number of buses they own and also their controlling interest in other private corporations.

In Part 3, The Tribune would show how a suspiciously supportive government policy has ensured that private operators can not only recover their costs but make profits too.
(Prabhjot Singh with inputs from Sushil Goyal, Gagan K. Teja, Ravi Dhaliwal, Pawan Kumar Jaiswar, Neeraj Bagga and Kusum Arora).

A Tribune Investigation Punjab Public Transport - 3
How the transport policy was manipulated for private profit
Punjab Bureau
Chandigarh, September 28
Soon after it came to power in February 2007, the Shiromani Akali Dal-Bharatiya Janata Party (SAD-BJP) alliance government headed by Chief Minister Parkash Singh Badal decided to review the existing public transport policy. By September that year it unfolded the new transport policy that clearly smacked of favouritism towards the private operators who owned luxury buses.

However, the then Transport Minister Master Mohan Lal masterly couched the bias claiming that by encouraging the introduction of air-conditioned buses, the government would be able to persuade the common man to travel more in buses rather than cars and scooters.

The new tax structure for public transport had the strangest of anomalies - the costlier the bus, the lower the taxes the owner paid. For operators running ordinary buses (meaning non-AC) the tax rate was reduced from Rs 2.50 per km to Rs 2.25 per km - a mere 25 paise. But for air-conditioned buses it was reduced by half from Rs 2 per km to Re 1 per km. And for the super-luxury buses also called integral coaches the tax per km was slashed from Rs 7.50 a km to 50 paise per kilometre - a drastic reduction.

It was around this time that the companies owned by the Badals had started steadily buying or acquiring buses in the luxury sector. They were not the only politicians that were doing that. Representatives from the entire political class whether the BJP or the Congress were not far behind. These included Avtar Singh Henry, a former Congress MLA and Jagdish Sahni, a sitting BJP MLA.

In normal practice if there is a conflict of interest, the individuals concerned should have declared their interests and recused themselves from the policy making process. Instead there was a glaring impropriety of the Chief Minister and other interested political personalities who were in power directly determining the outcome of the policy.

By 2011 when the new transport policy was fully implemented, the companies controlled by the Badals had acquired or taken over 150 such luxury buses. As mentioned in Part 2 of the series that appeared yesterday their acquisitions in the luxury sector totalled the number of such buses owned by the two state-run corporations, Punjab Roadways and PEPSU Road Transport Corporation (PRTC).

The new policy meant that in the super-integral category if, for instance, a bus ran from Bathinda to Chandigarh traversing a distance of 238 kms in the old slab of Rs 7.50 a km the owner would have paid a tax of Rs 1785 per journey. But in the new slab of Rs 0.50 per km, he pays only Rs 119 - a saving of as much as Rs 1,666 per trip in tax.

In the case of HVAC (Heating, Ventilation and Air-conditioning) category, according to the old slab of Rs 2 a km, operators would have paid Rs 476 for a similar journey. In the new slab of Re 1 a km they pay only Rs 238 - a tax saving of 50 per cent on each trip.

In comparison the saving for owners of ordinary buses was marginal. For the same journey, according to the old rate of Rs 2.50 per km they would have paid Rs 595 per trip. In the new rate of 2.25 per km they pay Rs 535.5 making a saving of barely Rs 60 per trip.

The other major concession to the luxury segment operators was that instead of paying tax for 365 days a year, integral buses had an exemption for 150 days a year and HVAC for 75 days a year. Strangely ordinary buses, in which the weaker section travel in, get a tax exemption only for 50 days a year - one third of the concession given to the luxury segment. “The new policy was drafted to favour Badals and their favourites in the private public transport business,” charges Amrik Singh Dhillon, a former Congress MLA from Samrala and a private public transporter himself.

Manpreet Singh Badal, who was the then Finance Minister, told The Tribune that his ministry also raised objections to the manner in which the new policy was tailor-made to suit a selected few, especially those in the luxury public transport sector. He claims that his ministry had even stated in writing that the new tax policy would destroy the state-owned public transport corporations. It is a different story though that till he was in Government, Manpreet did not openly protest or even have his own holdings in buses diluted.

Master Mohan Lal of the BJP, the then Transport Minister, however, denies charges of favouritism being shown to the Badals or other politicians. He told The Tribune “To be honest, I was till then a novice in the transport business. I had no knowledge of who owned buses. My only directions to the then Transport Secretary was that the new policy should be designed to bring relief to the common man while improving the services.”
Instead it has resulted in the opposite. Smaller and marginal players in the transport sector who had been agitating for years demanding the removal of major bottlenecks say they are in dire straits. Baldev Singh, a private bus operator who runs Dasmesh Transport Company, holds the wrong policies of the SAD-BJP government responsible for the plight of smaller bus operators. “Small private bus companies are on the verge of collapse. If the present policies are continued for another two to three years, only a couple of major private bus operators will remain in the business. The rest will be wiped out.”
(By Prabhjot Singh with Sushil Goyal, Gagan K. Teja, Puneet Pal Singh Gill, Ravi Dhaliwal and Kusum Arora).
Tomorrow: Private profits, public losses
Tomorrow The Tribune will expose how and why the state-owned bus corporations face the same fate as Air India in the aviation sector.
</td> <td valign="middle" width="300">Tomorrow: How the Badals hijacked the bus transport sector</td> </tr> </tbody></table>

Rajneesh Madhok




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