Delhi Transit

Private Stage Carriage

Corporatisation in Delhi
Discussion on RFQ Document
Investor Meet
March 26, 2008
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Delhi Transit
S. No Particulars Year Number of Permits
1 Pre 1950 stage carriage operation 1940-50 108 permits
2 Old scheme 1971 100 mini buses
3 Ex-servicemen scheme 1973-74 120 mini buses
4 Graduate scheme 1975 100 mini buses
5 Scheme for SC/ST 1981 68 permits
6 Point to point scheme (Asiad) 1982 300 permits
7 Luxury (White line scheme) 1991 100 permits
8 Red line/Blue line scheme 1992 3000 permits
9 Suvidha 1993 609 permits
10 New scheme for CNG buses 2002 637 permits
11 Erstwhile KM scheme 2002 (April) 2,772 permits
History Of Private Sector Bus Operation In Delhi
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Delhi Transit
3
Type of Bus
Number of Buses
City Interstate
Contract carriage 2,957 2,727
Light Contract carriage 2,144 1,421
DTC (Stage Carriage) 3,106
#
338
Private Stage Carriages (Blueline) 3,849 ..
DMRC and other mini buses 986 ..
Buses of Educational Institutions 124* ..
SumTotal 13,166 4,486
#
Includes 213 CNG buses plying in National Capital Region
* Including 20 Light Passenger Vehicles
Source: STA as of 25 October 2007 and DTC Operational Statistics
Number Of Buses For Different Types Of In-city Transport
In Delhi
There are approximately 17 terminals and approximately 6,400 Bus
stops in Delhi.
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Delhi Transit
4
0.5% 0.3% 0.2% 0.2%
0.9% 1.3%
1.8%
4.1%
14.4%
76.3%
18 10 9 8 6 5 4 3 2 1
Size of Operator (No. of Buses)
S
h
a
r
e

o
f

B
u
s

F
l
e
e
t

Distribution of Blue line fleet size by size of operator
The majority of the private stage
carriage permits came into being
through A Scheme for Private Bus
Service in Delhi under Stage Carriage
Permits, which was advertised in
the year 1992.
Stage carriages introduced under
this scheme quickly came to be
known as Redline buses owing to
the prescribed color code. Soon
after introduction, these buses were
involved in a spate of accidents.
This led to the color code of the
buses being changed to blue and
they came to be known as Blue line
buses.
Private Stage Carriage in Delhi
2004 2005 2006
DTC 3,904 4,815 4,612
Blue Line 69,282 59,536 48,750
Ratio 17.7 12.4 10.6
Source: Road Accidents in Delhi, various issues.
Offences Committed by DTC and Blue Line Buses
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Delhi Transit
Problems With Existing Operation
Accidents and traffic violations.
Undesirable
Driving practices
Theka System
Waiting anxiety and unsafe passenger behavior
Reduction in unremunerative services and routes
Lack of network benefits
Predation by incumbents or cartelization
Multiplicity of permit conditions
Impounding of vehicles
Unviable fare structure
Lack of financial support to enable system improvement
Absence of bus lane enforcement
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Delhi Transit
Analysis of Problems and Reform Model Essentials
Reducing accidents and traffic violations.
Need to segregate traffic.
Reducing undesirable driving practices.
Monitoring through Intelligent Transport Systems.
Driver training, certification and verification.
Contractual practices.
Vehicle choice and maintenance.
Reduction in waiting anxiety.
Service provisions on non-profitable routes.
Ensuring network benefits.
Preventing predation by incumbents or cartelization.
Reducing multiplicity of permit conditions.
Introducing suitable incentives and disincentives.
Financial support for public transport.
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Delhi Transit
DIMTS
GNCTD
Operator
Corporatisation of Private Stage Carriage
Operation in Delhi
O
I N
Parties
GNCTD - Government of National Capital Territory of Delhi
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Delhi Transit
Private Stage Carriage Services
Owning to the increasing irregularly of blue-line buses, the
government is looking to overhaul the current system.
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Delhi Transit Private Stage Carriage Corporatisation
GNCTD has launched a scheme to privatise the stage carriage
(known as Blue-line) buses operation.
Delhi Total Area
All bus routes in Delhi have been
aggregated into seventeen (17)
clusters.
Private players can operates their
fleet in one or more clusters, after
fulfilling all the criteria.
The contract will be awarded for a
period of 10 years.
Each cluster may have more than one
type of bus such as standard, semi-
low floor and low floor.
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Delhi Transit
Scheme Objectives
Universality, i.e. availability of services on all
scheduled routes.
Continuous improvement of the service.
Integrated character, punctuality and passenger
comfort.
Restricting on-road competition.
Increased monitoring in real time.
Progressive improvement and integration of the
system with other modes of transport.
S AFETY
U NIVERSALITY
E CONOMICAL
C OMPETITION
M ONITORING
I NTEGRATION
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Outline of Concession Agreement
Bus services under the scheme will be provided by
separate independent private entities.
Operators
All the existing 657 routes will be covered by the scheme
in phased manner.
Permits will be co-terminus with the concession
agreement.
Existing routes are clustered into suitable bunches of
routes such that competing routes do not overlap across
operators.
Each of these clusters will be serviced by a single private
operator and DTC.
The operator will be required to provide a scheduled bus
service based on Unified Time Table for all the operators
including DTC.
Routes
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Delhi Transit
Outline of Concession Agreement
Selection of the private operator (company) will be
through competitive bidding.
The operator will have to meet criteria related to the
quality and specifications of buses, qualification and
experience of crew and adherence to performance
parameters.
Selection
Process
All buses under the concession will be branded to
identify the operator and the Delhi Transit operation.
Premium
Services
The operator will be free to offer premium services in
addition to the regular services.
Branding
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Delhi Transit Role of DIMTS Limited
Planning, management, control and monitoring as a
concession manager.
Ensuring adherence to operational and environmental
standards through monitoring and systems of incentives
and disincentives.
Management of common infrastructure.
Dispute resolution through a two stage process.
Management of revenue sharing arrangement between
operators through an escrowaccount.
Contract monitoring and management.
Interface between the regulatory authority and the
concessionaire.
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Delhi Transit Implications for GNCTD
Restructuring of institutional frameworks for
Regulation, planning and operational functions
Enforcing UTT (through concession manager) and
regulating tariff structure
Facilitate access to public assets such as depots
available for private sector operators
Mobilizing private investment for public services
Facilitating driver training and registry.
Seed investments for operationalising the off board
revenue streamand general infrastructure mobilization.
Facilitating above with changes in regulatory regime or
inter agency coordination where necessary.
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Delhi Transit Implications for Bus Owners
Investment in fleet and associated equipment.
Restructure the financing mechanism.
Formation of companies or joining hands with corporate
players.
Moving away from individual ownership and competition for
passengers to corporate ownership and competition for
market.
Each company will have to meet performance standards,
contractual obligations, technical parameters, technological
requirements of tracking and monitoring of individual buses
and the business prospects & risks.
Migration from individual operational flexibility to synergistic
management in a larger framework.
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Delhi Transit Net System Outcomes
Progressively replace the existing blue line scheme.
Independent companies to provide services.
Clustering of routes for operational synergy and competition
reduction.
Automated fare collection system.
Automated monitoring of performance monitoring adherence
to standards relating to safety, punctuality, vehicle condition
and customer services.
Certified and registered drivers.
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Delhi Transit
Discussion on RFQ Cluster 1
L
E
-
1
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Delhi Transit
Cluster 1 - Details
Total number of Proposed Routes -- 32
Total number of estimated buses
For DTC 330 340 buses
For DIMTS 220 230 buses
Total estimated scheduled km/ day operation 53,000 kms
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Delhi Transit
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Delhi Transit
Current Status Cluster 1
Study for
feasibility of
the scheme
Cabinet
approved
the Scheme
RFQ
document
for Cluster 1
launched
RFP
document
will be
launched
Concession
agreement
between all
3 parties
COMPLETED
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Delhi Transit Schedule Of Qualification Process
S. No. Event Description Indicative Dates
1. Pre-application meet March 24, 2008
2. Last Date for receiving queries April 07, 2008
3. DIMTSs response to queries latest by April 14, 2008
4. Application Due Date submission April 25, 2008 upto 1700
hrs
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Delhi Transit
Only four types of applicants are eligible for participating at the
qualification stage, which are:
A Business Entity
A private or public company registered under the companies Act,
1956.
Type 1
Type 2
A Co-operative society
A co-operative society of Scheduled Castes (SC) or Scheduled
Tribes (ST) registered in Delhi under Delhi Co-operative Societies
Act, 2003 on or before Application Due Date.
All members should belong to either SC and/or ST.
Eligibility Criteria
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Delhi Transit
Eligibility Criteria
Type 3
Type 4
A Business Entity promoted by stage carriage bus
operators
The shareholders, holding a minimum of twenty-five (25) and a
maximum of thirty-five (35) Permits issued by the State Transport
Authority, Delhi valid on March 31, 2007.
Shareholders commit to hold a minimumequity stake of 51% in the
aggregate shareholding of the business entity at least for 10 years.
Consortium
A combination of a maximumof five members, comprising
One Lead Member who is a Type 1/ Type 2 entity.
Four other members who are Type 1/ Type 2/ Partnership
Firm/ registered Co-operative Society/ individual entity.
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Delhi Transit
Evaluation Criteria
The Applicants competence and capability is proposed to be
established on two parameters:
Operational
Experience
Only, the Applicant, who meets the evaluation criteria, can
submit its Proposal for the Project.
Financial
Capability
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Delhi Transit
Evaluation Criteria Operational Experience
Contd
Category Measurement Parameter Experience
Weight
Category 1 Stage Carriage (e.g. bus/ mini bus/ Rural
Transport Vehicle (RTV)) operation with
requisite valid permits to operate in India.
1.00
Category 2 Contract Carriage (e.g. bus/ mini bus/ RTV/
cabs/ taxi/ van/ jeep) operation with requisite
valid permits to operate in India.
0.80
Category 3 Stage/ Contract Carriage with requisite valid
Permits issued by appropriate authority from
outside India under equivalent law.
0.80
Eligible Operational Experience has been classified in three (3)
categories, each carrying a different weight-age
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Delhi Transit Calculation of Operational Experience Score
Applicants experience shall be measured and stated in terms of
a score
Number of Vehicles * Experience Weight * PCU Factor of the
vehicle * Number of months of operations
12
XXX PCU Years =
An operator who will achieve an Operational Experience of 300
PCU Year would be deemed to meet the experience criterion for
qualification.
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Delhi Transit
Operational experience shall be considered in terms of Passenger Car Unit
(PCU) Years after April 1, 2004 and upto December 31, 2007.
Based on Category of experience, relative Experience weights shall be
assigned as set out in the following table.
PCU Factor is assign on the basis of size of the vehicle:
Type PCU Factor
Bus 3.00
Mini Bus 1.50
RTV 1.50
Car/ Cabs 1.00
Taxi/ Van/ Jeep 1.00
In case to Type 2 or Type 4 Applicants, experience of all members shall be
considered for the purpose of evaluation.
In case of Type 3 Applicants, Applicants are required to provide proof of
permits valid as on March 31, 2007.
Calculation of Operational Experience Score
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Delhi Transit Sample Calculation Table
Type
No of
vehicles
with Permit
PCU
Factor for
the
vehicle
Experience
Weight
No of Months in
Operation (April
1st 2004 to Dec. 31,
2007)
Total PCU Years
(Operational
Experience)
1 2 3 4 5 6 = (2*3*4*5)/12
Category 1
Bus 35 3.00 1.00 24 210.00
Mini Bus 10 1.50 1.00 20 25.00
Category 2
Bus 10 3.00 0.80 12 24.00
Mini Bus 5 1.50 0.80 8 4.00
Cab 50 1.00 0.80 12 33.33
Taxi 10 1.00 0.80 18 6.67
Van 2 1.00 0.80 5 0.67
Jeep 1 1.00 0.80 6 0.40
RTV 1 1.50 0.80 3 0.30
Operational Experience (Sum of Total PCU Years Experience) 304.37
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Delhi Transit Evaluation Criteria Financial Capability
Type of
Applicant
Financial Capability Criteria
Type 1
Applicant
Net worth of the Applicant as at the end of the last financial
year shall be at least equal to Rs. 6 Crores
or
The aggregate Net Cash Accruals of the Applicant for the last
two financial years shall be at least equal to Rs. 6 Crores
Type 2
Applicant
Net worth of the Applicant as at the end of the last financial
year shall be at least equal to Rs. 3 Crores along with an
undertaking to increase the Net Worth to atleast Rs. 6 Crores
Or
The aggregate Net Cash Accruals of the Applicant for the last
two financial years shall be at least equal to Rs. 6 Crores
The Applicant should meet any one of the following Financial
Capability Criteria:
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Delhi Transit
Type of
Applicant
Financial Capability Criteria
Type 3
Applicant
The operators can formed a special purpose company (SPC)
with an initial capital of Rs. 5 Lacs.
AND
The Applicant need to submit an undertaking, in form of
Appendix 9, committing that the authorised capital of the SPC
will increase to Rs. 6 Crores and the owner will subscribe the
same.
Type 4
Applicant
Net worth of the Lead Member of the consortium as at the end
for the last two financial years shall be at least to Rs. 6 Crores
OR
The aggregate Net Cash Accruals of the Lead Members of the
Consortiumfor the last two financial years shall be at least equal
to Rs. 6 Crores
Evaluation Criteria Financial Capability
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Delhi Transit
The application must be accompanied by the audited annual
financial statements of the Applicants for the last two years.
If the annual accounts for the latest financial year are not
audited. The Applicant may provide the unaudited annual
accounts, giving an undertaking to that effect and the
statutory auditor shall certify the same.
In Case of Type 4 Applicant (Consortium), the financial
capability of the Lead Member should be equal to 100% of the
Financial Capability Criteria.
The Lead Member should hold 51% stake and all members
of the consortiumshould hold minimum5% stake of SPC.
Evaluation Criteria Financial Capability
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Delhi Transit
Net Cash Accruals = (Profit After Tax + Depreciation + Non cash
Expenses)
Net Worth = (Subscribed and Paid-up Capital fund + Reserves +
Share Allotment Money Already Received + Preference Shares
(including Redeemable) + Convertible Debentures but excluding
Warrants - (Revaluation reserves + Miscellaneous expenditure not
written off)
The financial year would be the same as followed by the Applicant for
its annual report. Say, Year 1 will be the financial year 2007-08. Year 2
shall be the year immediately preceding Year 1.
The Applicant shall provide the audited annual financial statements
as required for this RFQ Document. Failure to do so would be
considered as a non-responsive bid
Financial Capability - Financial Terms/ Definition
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T
E
D
T
A I
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Bus Specifications
Buses will have a mix of specifications (based on the nature of
the route, road conditions and the traffic patterns) such as low
floor, semi low floor and standard buses.
All buses will be equipped with GPS tracking system,
automated devices to validate off-board tickets, devices to issue
tickets and devices to record identity of staff for increased
safety.
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Delhi Transit
Fares and Revenue Streams
The operators will be compensated through following revenue
streams:
Fare box collection as per regulatory provisions.
Off board revenue from sales of tickets and advertising on
the buses etc. as per the bid criterion.
Fiscal Incentives and Disincentives operationalised
through the per km. payment.
Operators will be paid, along with incentives and disincentives,
from an escrow account jointly managed by the operator and
the concession manager.
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Bid Criterion
The bid criterion will be a per kilometer/ passenger
kilometer (yet to be finalized) cost payable to the operators
by the concession manager from off-board revenue
(generated from off board tickets, advertising revenue and
operational penalties).
This payment will be in addition to the fare box revenue
that will be retained by the operator.
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Delhi Transit
L1 - Least Present Value Revenue (LPVR)
To facilitate a possible foreclosure of the concession from
any operational eventuality or structural reorganization,
operators may be required to quote a Least Present Value
Revenue (LPVR) figure at a standard discount rate that
will be kept in a sealed cover during the pendency of the
concession.
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Delhi Transit
38
Appendix Detail
Appendix Detail Type 1 Type 2 Type 3
Type 4
Lead
Member
Member
1
Member
2
Member
3
Member
4
1 Letter of Application

2 Power of Attorney

3 Power of Attorney
(Single)
4 Details of Applicant

5 Financial Capability

6 Experience

Form 6A (Permit Details)

Form 6B

7 Affidavit

8 MOU
(Single)
9 Undertaking by Type 3

10 Undertaking by Type 3

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Thank You !