Corporatisation in Delhi Discussion on RFQ Document Investor Meet March 26, 2008 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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
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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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 Delhi Transit Private Stage Carriage Services Owning to the increasing irregularly of blue-line buses, the government is looking to overhaul the current system. @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 Delhi Transit 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 Delhi Transit Discussion on RFQ Cluster 1 L E - 1 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 Delhi Transit @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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: @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 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 @ DIMTS Limited, 2008 Delhi Transit T E D T A I @ DIMTS Limited, 2008 Delhi Transit 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. @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 Delhi Transit 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. @ DIMTS Limited, 2008 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. @ DIMTS Limited, 2008 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