Reducing KTC Losses

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Hosts of measures needed to bring Kadamba out of red

The state-owned Kadamba Transport Corporation (KTC) has been in the red since it was started in 1980. Though the government promised a KTC turnaround several times, it has not been able to break even. With every passing year the corporation has been adding to its losses, which were cumulatively estimated at Rs 235 crore. Finding itself in a desperate situation the management of the KTC has decided to take drastic measures: they will cut down costs by reducing the number of drivers and conductors, who are the core staff of the corporation, and by not hiring new staff in place of the staff that retire. While this may help reduce expenditure, the management would have to increase the number of trips made by drivers and conductors to raise the income of the corporation, which is a universal practice. It is true that, much like other government-run state transport corporations, the KTC too runs some buses on loss-making routes in rural areas where the private buses do not ply, but steps need to be taken to make up for the losses there with gains in other places.

In its 2017 report the Comptroller and Auditor General (CAG) had pointed out that losses incurred by the KTC were because of its poor manpower management and low productivity of the drivers and buses. According to the officials’ data, the number of trips per day by a driver and conductor in 2019-20 was 2.68 and 3.8 respectively, an improvement from 2.12 trips per driver and 2.86 trips per conductor per day in 2018. The KTC must reduce the number of accidents in order to improve efficiency. The KTC has not been able to reduce the rate of accidents per lakh kilometres over the last three years, which adds to losses. In fact the rate of accidents which stood at 0.14 in the year 2018-19 increased to 0.20 in 2019-20. During 2019-20, KTC buses were involved in 64 major accidents, 44 of which were fatal. Ticket rates have not been increased for quite some time now, even though the rates of diesel have been increasing substantially, which adds to its losses.

The KTC has 523 buses in its fleet but their utilization has been going down. Poor utilization has been attributed to frequent breakdowns of buses. The corporation buses suffered 1,148 breakdowns in 2019-20 alone. These breakdowns lead to loss of revenue, besides putting people to discomfort, driving them to turn to other modes of transport. The KTC management should ensure that all the vehicles are maintained properly and periodically tested and repaired and are kept roadworthy. As the management has a policy to hire temporary staff in place of retired staff, it should reduce staff costs. However, the KTC management cannot ignore the reality that good manpower is the biggest asset of an organisation. If the KTC management wants to see all their buses are on the road regularly to increase earnings, it needs to have good staff. The drivers and conductors need to be selected through strict screening. They are the men of the KTC out on the road and their behaviour makes a lot of difference to how much pull KTC buses have. For instance, there are complaints that some of the KTC drivers do not pick up passengers on the routes from the stops as private buses do. The management must impart special training to drivers and conductors to equip them with skills to make passengers feel comfortable and happy. That will draw more passengers.

The KTC spent 54 percent of its revenue on salary in 2018-19. The KTC has to balance its staff cost cutting with optimal and professional selection of drivers and conductors. The corporation’s earnings from fixed assets at bus stands can be increased by adding more facilities. The KTC is hoping that the addition of electric buses to its fleet would help it reduce losses. An increase in fare would also add to earnings. The government should pay more to KTC for the school buses. The focus should be on bringing down the operation costs and increasing earnings.