Indian Institute of Management

Ahmedabad

IIMA/CIPR0003(B)

Indore City Bus Transport Service (B)

On June 7, 2008 Mr Chandramouli Shukla, Chief Executive Officer (CEO) Indore City
Transport Services Ltd (ICTSL) called a meeting of the Board of Directors of ICTSL. ICTSL
had launched a public transport system in Indore in February 2006 and its services had been
well received by the public. Though in two and a half years it had transformed the bus
transport scenario of the city, Mr Shukla faced problems arising out of changes in all the cost
components of the system. Increase in fuel price, maintenance cost, bus cost and bank
interest, along with decrease in the fare box revenue and advertisement revenue had
depleted the margins of the bus operators. Fares had not been increased since February 2006.
He was clear that the organization would survive only if the bus operators survived. There
was also pressure from the government to extend bus service to suburban areas and to start
a radio taxi service in the city. Mr Shukla wondered about the long term implications of
commencing the suburban and radio taxi services.
Formation of ICTSL
ICTSL was incorporated on December 1, 2005 as a special purpose vehicle (SPV) under the
Companies Act of 1956. It operated and managed the public transport system in Indore on a
Public Private Partnership (PPP) format. The mission and the main objectives of ICTSL as
stated in its Memorandum of Association are given in Exhibit 1.
The authorized capital of the company was Rs 2.5 million (divided into 0.25 million equity
shares of Rs 10 each). The initial paid up capital of Rs 2.5 million was held by the Indore
Municipal Corporation (IMC) and Indore Development Authority (IDA) in equal
proportion. The top management of the company comprised all the top officials associated
with transportation activities in the district (Exhibit 2). They included the Mayor and the
Municipal Commissioner of IMC, the Chairman and the CEO of IDA, and the Collector and
the Joint Collector of Indore District (Exhibit 2). The Regional Transport Officer, the
Superintendent of Police, Indore and bus operators were special invitee members.
The company was incorporated after Government of Madhya Pradesh had approved the
concept note submitted by Mr Vivek Aggarwal, the Collector and District Magistrate, Indore
District. The motto of the concept note was: 'minimum investment with maximum returns.
It spelt out how the project would promote competition and at the same time take advantage
of any economies of scale without making huge upfront investments.
Project Structuring
As per the concept note, the project was to be unbundled into the following components:

ICTSL would provide infrastructure facilities, like road network, common parking
facility for buses and common maintenance workshop. It would also have the
responsibility for planning, management, control, and monitoring of the public transport
system, that is, network and route design, fare determination, finalization of
specifications of buses, franchising/route allocation, contract monitoring, monitoring the

Prepared by G Raghuram, Satyam Shivam Sundaram, and Himanshu Patni.

Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for class discussion.
They are not designed to present illustrations of either correct or incorrect handling of administrative
problems.
2010 by the Indian Institute of Management Ahmedabad

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IIMA/CIPR0003(B)

quality of service, and dispute resolution. Provision of common infrastructure by ICTSL

would ensure that the project benefitted from economies of scale.

IMC would have the responsibility to develop bus stops. During the process of
unbundling, ICTSL wanted to invite tenders for the bus stop construction. However,
both IMC and ICSTL after due consideration on legal and operational issues, like
ownership of land and removal of encroachment, decided that IMC would take the
responsibility for the construction of bus stops.

Operation of buses on various routes would be carried out by private operators. It was
decided that each route would be served by a separate operator so as to eliminate any
direct competition among operators for picking up commuters from a particular bus
stop. It was envisaged that such an arrangement would reduce instances of rash driving.

Maintenance of buses owned by the service providers was kept as a separate activity and
was to be awarded to a private party. However, the bus operators would have to pay for
the maintenance of their buses. This would leverage benefits of economies of scale.

Advertisement rights for the buses would be given to a single private advertising
agency.

Responsibility of issuance of monthly passes and marketing of ICTSL tickets would be

given to another private party.

Global Positioning System (GPS) would be installed on a Build, Own, Operate and
Transfer (BOOT) basis in all buses with a central facility to provide, i) real time
information to commuters about the expected arrival time of the next bus at each of the
bus stops and ii) monitor the service parameters and performance of the operators.

For better integration, a uniform bus fare system and a single pass for all buses on all
routes was proposed. The salary structure across all operators was also to remain the
same.

Exhibit 3 gives the overall project structure of ICTSL. Exhibit 4 provides details of financial
planning of the organization as conceived by Mr Aggarwal in his concept note. The financial
modelling of the project was carried out in-house. The model suggested that the proposed
system was financially viable. The service attributes of the proposed system are given in
Exhibit 5.
Selection of Project Partners
Once the state government approved the concept note the process of identifying the private
partners started.
Bus Operator
A pre bid meeting was hosted on December 20, 2005 to explain various aspects of the
business to the prospective bidders. Then bids were invited on December 23, 2005. The key
sections of bid document for the initial 18 routes are given in Exhibit 6. Contracts were
awarded to the operators with the highest bid value (monthly premium per route). Exhibit 7
gives the names of the contract awardees and the monthly premium on various routes along
with the date of commencement of their service on the respective routes. Each contract was
awarded for five years and hence all the contracts on the same route were not coterminous.
Advertising Agency
Applications were invited on January 17, 2006 from companies interested in getting the
rights for advertising on the buses. It was decided that the contract would be awarded to the
agency with the highest bid value, that is, highest monthly premium per bus. As a result, six

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bids were received. M/S Giriraj was the highest bidder at Rs 25,000 per bus per month and
so was awarded the contract for 37 buses. Subsequently, in August 2006 it also got the
contract for another 16 new buses and in January 2007 for 43 new buses at the same rate. All
these contracts were coterminous with the first contract of 37 buses. In April 2007, it was
awarded the contract for 150 buses at the rate of Rs 12,200 per bus per month.
Agency for Issuance of Passes
Tenders were invited for issuance of passes and marketing of bus tickets on franchise basis.
Bids were opened on January 20, 2006. The contract was awarded to M/S R Square Systems
& Solutions because it asked for the least amount per pass. Exhibit 8 contains the agreement
document signed by ICTSL and M/s R Square Systems & Solutions.
GPS Operator
Applications from interested technology service providers were invited to monitor vehicle
operations using online GPS on BOOT format through a two bid system (technical bid and
financial bid). The contract was awarded to Mumbai based firm M/s Arya Omni Talk. It had
bid the lowest amount of Rs 2,400 per bus per month.
Two Years of Bus Service (2006-2008)
Operations
The fleet size grew from six in February 13, 2006 to 112 in May 1, 2008 (Exhibit 9). Between
March 2006 and January 2007, 72 new buses were added which started plying on 19 new
and three existing routes. Therefore, the number of buses on a route remained nearly
constant till September 2007. From October 2007 to December 2007, five new buses were
added. Then in January 2008 when two new routes, 25 and 26 connecting the centre of the
city with the suburban areas, were opened 18 new buses were added. Exhibit 10 gives the
details of the number of buses added on specific routes in a chronological order.
From carrying approximately 0.5 million passengers in April 2006, ICTSL fleets capacity
grew to cater to more than 2.6 million passengers in May 2008. Exhibit 11 gives an idea of
the total number of passengers served and the daily fare box collection in May 2008. Exhibit
12 shows the impact (as on June 6, 2006) of increase in prices of petrol by Rs 4 and diesel by
Rs 2 on the choice of commuters mode. As the analysis shows, more than 4,000 commuters
shifted to bus due to unit increase in the travel cost on personalized modes.
The number of passes issued per month increased from 446 in April 2006 to 6,391 in April
2008. The monthly details of passes issued are given in Exhibit 13.
The number of accidents in the city caused by rash driving of bus drivers reduced
significantly. While in 2005, 38 accidents were attributed to private buses
(www.indiastat.com), only one fatal accident in two years (2006-2008) was attributed to
buses run under ICTSL.
According to various reports published in the newspapers, environment of the city showed
a distinct improvement. Some of the newspaper articles related to ICTSL are presented in
Exhibit 14. These articles highlight the positive changes that took place in Indore after the
commencement of the public bus service.
In May 2008, ICTSL engaged V R Tecniche Consultants Private Limited to assess the
reduction in vehicular emission, air pollution, and fuel consumption in order to seek credit
for carbon reduction under Asia Pacific Partnership on Clean Development and Climate
(APPCDC). In fact keeping this aspect in mind, it had chosen the buses carefully; ones with

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low level of emission, low floor, less vibration, low noise, etc. Credits, thus earned, would
help ICTSL get monetary reward from the United Nations (UN).
In its two years of operation, Indore Bus Transport System (IBTS) was able to develop a
sense of ownership among the citizens of Indore. Women, in particular, felt safe and
comfortable in the new city buses, because there were separate seats for them in contrast to
the earlier buses and tempos of Nagar Seva. Apart from the newspaper articles, interaction
with commuters during site visits gave an indication that improved behaviour of the crew
was appreciated by all.
Financial Details
The key financial data for the period 2006-2008 are given in Exhibit 15. The concept note had
proposed that the profit earned every year would be invested in the development of
transport infrastructure of the city. The Balance Sheet (as on March 31, 2007) and the Profit
and Loss Account (for the year ended on March 31, 2007) are given in Exhibit 16 and Exhibit
17 respectively. Exhibit 18 gives a broad breakup of components of cost and revenue for
ICTSL. The biggest source of revenue for the company was from advertising followed by
monthly premium. The highest cost factors for ICSTL were: road tax, vehicle expenses, and
the recurring expense of GPS/Passenger Information System (PIS).
From Exhibit 19, which gives the details of economics of two bus operators, we can see that
the main source of revenue for the bus operators was the daily fare box collection. The entire
daily collection went to the operator. Exhibit 11 gives the total amount collected per day by
bus operators in May 2008. On an average in May 2008 per day collection had been Rs
437,828. The government had notified ticket fares for different distances. As on December 9,
2005 the fares for city buses with sitting capacity of 12 (excluding the driver) within
municipal corporation limit were:
Distance
Fare
Up to 3 km
Rs 3
Up to 7 km
Rs 5
Up to 10 km
Rs 7
Up to 13 km Rs 10
Up to 16 km Rs 12
ICTSL and the bus operators shared the revenue from the monthly passes in the ratio of
80:20. The marketing of the service was done by a vendor who also sold the monthly passes.
The cost of a monthly pass was Rs 250 in 2006 which was increased to Rs 300 in 2008. Out of
the 20 per cent that ICTSL received, it retained 12.2 per cent on a new pass and 17 per cent
on a renewed pass. The remaining 7.8 per cent in the case of a new pass and three per cent
on a renewed pass went to the vendor for processing, marketing, and delivery of passes. The
vendor had to guarantee issuance of minimum of 15,000 passes per month. This minimum
guarantee of passes ensured an assured income of at least Rs 4 million per month that was
shared between the operators and ICTSL. At the same time ICTSL shared the traffic risk
with the vendor.
Revenue from advertisement on buses was divided in the ratio of 60:40 between the
operators and ICTSL. In April 2006 the rate of advertising on buses was Rs 25,000 per bus
per month and it was tendered for 37 buses. In August 2006 it was tendered for 16 buses and
in January 2007 for 43 buses. In April 2008 it was tendered at the rate of Rs 12,200 per bus
per month for 150 buses. The reduction in bid value was due to increase in the number of
buses. Revenue from advertising at ICTSL bus stops were extra sources of income.

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Exhibit 20 provides an indication of economics related to GPS. The GPS operator received
around Rs 268,800 from ICTSL per month for providing tracking services on 112 buses. Most
of the equipments used in providing the services were properties of ICTSL and would have
to be handed over to it by the operator after five years of operation.
Sustainability in the Long Run
Since the inception of the project, sustainability was given special emphasis. The
administration was aware that for sustaining this facility two important criteria were: i)
sound organizational structure and ii) profit for everyone.
Organizational Structure
The elected representatives (Mayor, IMC and Chairman, IDA) were made the Chairperson
and Vice Chairperson respectively of the company. By doing so, it ensured that whichever
party came to power, it would have to adhere to the system. The Board of Directors
constituted of all the top bureaucrats of the city, which ensured that all the issues related to
implementation of service were overcome smoothly. The structure was such that even if
most of the directors were to lose interest in running the system, it could be run by a single
director. This made the system self sustained in all respects.
Financial Sustainability
It was very clear in the minds of the Directors that the system would survive only if each
party in business was able to make profit. However, the profit margins of the operators had
started to decline from 2006 for the reasons discussed below.
Decrease in profit margins of operators
The fare structure which had been decided by the state government in 2004 for the city buses
had not been revised. Since all the cost components had significantly increased over the four
years, there was a need to revisit the pricing mechanism. At the same time price elasticity of
commuters had also to be kept in mind. Since commuters were very sensitive to any increase
in the cost of travel, number of commuters could go down if the fares were hiked.
The cost of low floor TATA buses had increased from Rs 1.8 million to Rs 2.3 million. This
along with the increase in the interest rate (by around 150 basis points) had led to a
significant increase in the Equated Monthly Installments (EMI) for the bus operators. The
maintenance cost in 2006 was around Rs 4,000 per month for a new bus and Rs 9,000 per
month for a year old bus had almost doubled in two years. In 2008 the cost was around Rs
9,000 and Rs 13,000 respectively.
Increasing diesel prices were also a concern for the bus operators. Exhibit 21 shows the fuel
price revisions in the major cities from April 4, 2002 to May 24, 2008. On June 4, 2008, there
was another sharp increase in fuel price (Rs 5/l petrol and Rs 3/l diesel).
Another worrying factor for the operator was reduction in daily fare box revenue. Number
of commuters using passes was increasing, and hence, direct fare box revenue was
decreasing for the operators. Because of the introduction of more number of buses, the
advertisement revenue per bus was also declining. Hence, it was evident that to sustain the
system, ICTSL would have to take some decisions in favour of the operators so that their
depleting profit margins were taken care of.
Possible Options
After reviewing the situation Mr Shukla thought of putting before the Board the following
set of measures that would help ICTSL to overcome the crisis:

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Increase in Bus Fare

One of the possible options was to increase the bus fare. As already discussed above, such a
step would reduce ridership. However, since the petrol/diesel prices had been increasing,
personalized vehicular expenditures were also increasing. Hence, even if commuters were
sensitive to travel expenditure, bus fare could be hiked only to the extent that the commuter
would find the bus service to be more cost effective than personalized travel.
Renegotiation of Contracts
Another way to counter the unexpected increase in costs was to renegotiate the contracts
between ICTSL and the bus operators. The percentage share of revenue for the bus operators
from advertising and pass revenue could be increased. However, since ICTSL was a
government company, it would come under the scanner of the Comptroller and Auditor
General (CAG) and the Central Vigilance Commission (CVC). Given these constraints, the
company might not prefer to renegotiate the contracts.
Other Issues Related to Sustainability
Demands of Tempo/Van Unions
Apart from the problem of depletion in profit of the bus operators, ICTSL faced many other
issues. The tempo and city van unions had asked for an increase in the number of routes and
the length of the existing routes on which they were plying (Exhibit 22). Fulfilling their
demands would lower the ridership on ICTSL buses which were also running on the same
routes but on the other hand rejection would lead to agitation by the unions.
Introduction of Suburban Bus Services
On October 5, 2007, ICTSL floated tenders for the introduction of city bus service on the
suburban routes (Route 25: Indore-Rau-Pithampur-Indorama and Route 26: Indore-RauMhow- Pithampur). Tenders were opened on October 29, 2007. Arneja Road Lines (Route
25) and Dayajeet Nimay B.L.P.L. (Route 26) were awarded the contract on the basis of
highest monthly premium of Rs 12,085 and Rs 15,555 respectively. The bus service on these
routes started on January 1, 2008. Later, in May 1, 2008 two more buses were added on the
Route 25. The introduction of City bus services on longer suburban routes had fewer stops
en route. This, coupled with lesser traffic outside the urban areas facilitated higher average
speed for the buses. Therefore, the number of buses required to maintain the frequency for a
similar or proportionate route length in the urban area would be less. However, some
practitioners and academicians questioned the need for ICTSL to get into suburban services,
when the frequency and other service parameters within the city needed improvement.
Introduction of Taxi Services
In November 2007, the company also decided to start a demand responsive on-call taxi
service as a quick and easy means of transportation across the city. Tenders were floated on
November 29, 2007 for 100 taxis; two groups, each with 50 taxis. Splitting of groups was not
permitted. Tenders were opened on October 22, 2007 and M/s Prem Call Cabs Pvt Ltd,
Indore was awarded the contract for 100 taxis. It was the highest bidder at the rate of Rs
2,000 monthly premium per taxi. The taxi service was started in January 2008. It was
believed that introduction of taxi service would help reduce congestion resulted due to
growing number of motor vehicles. Moreover, taxi service was more commuter-friendly as it
provided door to door service. While the service was welcomed by a section of experts,
some felt that ICTSL should not have taken up an operation which was widely different
from bus service. They felt since ICTSL had not yet covered all the areas in the city and so it
needed to focus on servicing these areas rather than starting a new service.

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IIMA/CIPR0003(B)
Exhibit 1: Mission and Objectives

Mission

To devise and implement a mass transport service in accordance to the need of the city with a
view to provide viable commuting mode to the citizens of the city.

To decongest the traffic with the implementation of this cost effective system of public transport
thereby reducing the load on the city streets.

To create a financial model thats acceptable and beneficial to the government, the company and
the private contractors alike.

To provide a public transportation thats efficient, reliable and that ensures excellent services to
the commuters of all social strata.

To strive towards excellence by constant innovation and integration of newer technology for the
common benefit so that it becomes the Pride of Indore.

To strive towards creating a pollution free environment in the city by regulation of the use of
personal transport and encouraging the use of public transport.

Main Objectives
1. To establish and maintain line of passenger coaches and other vehicles generally to transport
passengers and to purchase, charter, hire, build or otherwise acquire passenger coaches and
buses to let out, hire or charter or otherwise deal with and dispose of any such coaches and
buses.
2. To purchase, construct, sell, develop, take in exchange or on lease, hire or otherwise acquire any
real or personal estate to develop infrastructure and to build roads, culverts, flyovers, tunnels, bus
stops, terminals, workshops and to give and undertake contracts for electrification of the facilities
developed by the company or any other agency.
Source: Memorandum of Association of ICTSL

Exhibit 2: Board of Directors

Name
Dr (Smt) Umashashi Sharma
Shri Madhu Verma
Shri Vivek Aggarwal
Shri Chandramauli Shukla
Shri V Sharma

Current Position
Mayor, IMC
Chairman, IDA
Collector and DM, Indore District
Joint Collector, Indore District
Municipal Commissioner, IMC

ICTSL Designation
Chairperson
Vice Chairperson
Executive Director
CEO
Member

Shri Pramod Gupta

CEO, IDA

Member

Source: ICTSL

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Exhibit 3: Organizational Structure

Source: ICTSL

Exhibit 4: Financial Planning

The paid up of the company was proposed to be Rs 2.5 million. The capital was to be subscribed by
IMC and IDA in equal proportion. The capital so raised and the profit available every year was
proposed to be invested in infrastructural development for transport in Indore.
Investment for the Project
(Rs)
Organization

Planned Investment

ICTSL

IMC

1,250,000

IDA

1,250,000

Total

2,500,000

Expected Monthly Expense

(Rs)

Expenses

Unit

Rate

Amount

Electricity

100%

5,000

5,000

Telephone

2,000

4,000

Rent

100%

20,000

20,000

Salaries

100%

25,000

25,000

Administrative Expenses

100%

15,000

15,000

RTO tax

50

400 per vehicle

20,000

GPS

50

1,000 per GPS

50,000

Total

139,000

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The original concept note had considered the total monthly expenses to be Rs 69,000, excluding the
RTO tax and GPS. The future projections were based on this figure.
Expected Monthly Income

(Rs)

Income

Unit

Rate

Amount

Advertising revenue

40%

1,250,000.0

500,000

Fresh passes

15,000

29.5

442,500

Renewed passes

35,000

42.5

1,487,500

Branding of passes
Revenue per bus

50,000
50

5.0
10,000.0

250,000
500,000
3,180,000

Total

Key Financial Figures

(Rs)
Amount

Gross profit per month

3,111,000

Return on equity (%)

14.93

Gross profit margin (%)

97.83

Profitability Projections For Five Years

350

317.31

300

250

Profits in Lacs

237.81

200

158.31

150

100

62.91
50
31.11
0
2006

2007

2008

2009

2010

Years

Monthly Expense for an Operator

Expenses
EMI
Road tax
Insurance
Diesel
Salaries
AMC
Tyres etc
Total

Unit
100%
100%
100%
1500 lit
100%
-

Rate
33,000.00
1,160.00
3,670.00
35.43
15,000.00
-

(Rs)
Amount
33,000.00
1,160.00
3,670.00
53,145.00
15,000.00
4,225.00
1,300.00
111,500.00

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Monthly Income for an Operator
Income
Advertising
Passes
Fare Box
Total

Unit
60%
200
3,000

Rate
25,000
1,000
30

(Rs)
Amount
15,000
200,000
90,000
305,000

Projected Balance Sheet for First Five Years

(Rs million)
Sr No

Particulars

Year 1

Year 2

Year 3

Year 4

Year 5

SHAREHOLDERS FUNDS

Share Capital

2.50

2.50

2.50

2.50

2.50

Reserves and Surplus

0.96

1.99

3.09

4.29

5.61

CURRENT LIABILITIES and

PROVISIONS

Sundry Expenses Payable

0.10

0.10

0.10

0.10

0.10

TOTAL

3.56

4.59

5.69

6.89

8.21

Fixed Assets

Furniture Gross Block

0.50

0.50

0.50

0.50

0.50

Less: Acc. Depreciation

0.07

0.14

0.19

0.24

0.28

Net Block

0.43

0.36

0.31

0.26

0.22

Current Assets

Sundry Debtors

1.28

1.41

1.54

1.69

1.87

Other Deposits

1.50

2.50

3.50

4.50

6.00

Cash and Bank Balances

0.25

0.22

0.24

0.34

0.02

Preliminary Expenses

0.10

0.10

0.10

0.10

0.10

TOTAL

3.56

4.59

5.69

6.89

8.21

Source: ICTSL

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Exhibit 5: Service Attributes

Ultra modern low floor buses with two broad doors, wide glass windows with 44 sitting and 40
standing capacity.

Self financing and revenue generating model for bus stops.

Bus stops to be located at spacing of 600 metres.

Fully-computerized ticket vending system.

Hand held computerized machines to issue daily tickets.

Real time vehicle tracking system through GPS based online data transfer facility.

PIS.

Optimum fare structure to meet the twin objectives of i) enable access to poor and ii) incentive for
upper middle class to shift to these buses from their own vehicles.

Completely modular pass system based on client server architecture.

Source: ICTSL

Exhibit 6: Excerpts from Bid Document for Bus Operation on 18 Routes

INDORE CITY TRANSPORT SERVICE LTD.
FORM FOR INVITING EXPRESSION OF INTEREST AND OFFER TO OPERATE CITY BUS
SERVICE IN INDORE CITY
ISSUEING FORM
THIS EOI/OFFER DOCUMENT TO OPERATE AND MANAGE THE PUBLIC TRANSPORT (CITY
BUSES) SYSTEM IN INDORE CITY has been issued by the EXECUTIVE DIRECTOR, Indore City
Transport Services Ltd, Indore
to ------------------------------------------------------- On
dated______________ , On receipt of Rs. 5,00/- (Rs. Five Hundred Only) by Cash ______________
(Receipt No. ________________________________________________________________)
EXECUTIVE DIRECTOR
Indore City Transport Services Ltd, Indore.
Preamble
Indore City transport services Ltd has been incorporated as SPV to operate and manage the public
transport system with Private sector participation in Indore City. The new SPV is ideally constituted as
a Public Limited Company incorporated under the Companies Act, 1956. The Registered Office of the
company will be situated at the office of Collector Indore. The company has been formed under the
chairmanship of Mayor, Indore with Collector of Indore as its Executive Director.
Procedure and Management
The management of the company is entrusted with the Board of Directors. There are seven members
on Board of Directors with collector District Indore as its Executive Director who shall be entitled to
exercise all powers for effective management of the proposed transport system under Public Private
Partnership model.
The Company has issued the EOI/offers to the interested operators, to operate the city buses on
various routes on the basis of Route wise offers in the form of amount of Premium to be paid to the
company on monthly basis. The company has identified and obtained permit for 18 routes in the city.
The other infrastructural facilities like Bus Stops, Parking at Night for Buses, permits for operating the
buses to particular routes, etc. will be supported by ICST
The bus operators will have to follow these rules and regulations. The driver, conductors and other
staff will be employed by the bus operators and such staff will be in proper uniform as decided by the
company. All the operating and maintenance cost, daily running costs, and other cost required for

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operating the services will be borne by the bus operators. The bus operators will be issuing tickets
from the Ticket Vending System as finalized by the company.
The company officials will overall supervise the day to day workings of the company and will see to
that the bus operators follow the rules and procedures decided by the company.
GENERAL CONDITIONS
Earnest Money
Rs.25,000/- (Rs Twenty Five Thousand) per bus. By crossed Demand Draft Drawn in favor of ICTSL,
Indore, Payable at Indore of any scheduled bank. (Demand Drafts of non scheduled bank will not be
accepted), if the earnest money deposit is not found in accordance with the prescribed mode and
amount mentioned as mentioned above, the tender/offer will be rejected.
Period of Contract
The contract will be awarded for the period of Five Years.
Number of Buses and Routes
The company will allow to the selected bus operators to operate minimum two numbers of specified
bus on each route daily between the specified timings and as per the trip schedule. Any changes in
number of buses will be subjected to the prior permission of the company. However incase of
increase in number of buses on any routes, the operator already having the buses on that route will
be given preference. The company has identified following 18 routes in the city and will obtain permit
to ply city buses on these routes from Road Transport Authorities.
1. Niranjanpur to Tajaji Nagar.
2. Dewas naka to Rajendra Nagar
3. Dewas naka to Airport.
4. Panchwati to Nagarnigam
5. Bapat Chouraha to Choithram Hospital
6. Khajrana to Bada Ganpati.
7. Tejaji Nagar to Airport.
8. Rajendra Nagar to Airport
9. Hawabangla to Bangali Chouraha.
10. Bombay Hospital to Nagar Nigam.
11. Bhawarkaun to Bada ganpati.
12. Sanchar Nagar to Rajwada.
13. Khajrana Chouraha to Krishnapura.
14. Sarvate Bus Stand to Indo German Tool.
15. Sangam Nagar to L.I.G.
16. Chandan Nagar to Railway Station.
17. Patni Pura to Nemawar Road Chouraha.
18. Rajendra Nagar to Jangeerwala Chouraha.
Type of Buses
Modern low floor 2 x 2, 44 seats buses with two broad doors, strap handles on guiding rails, anti skid
vinyl flooring, wide glass windows, integrated grab handles on seat, pre coated aluminum paneling,
CFL lighting, etc. complete as per detailed specifications given below.

13 of 33

IIMA/CIPR0003(B)

Low floor two step entry - 650mm height from ground

Two broad 1200mm wide doors.

Wide glass windows

44 seat 2x2 theater type seating and 40 standees

Anti skid vinyl flooring

Pre coated aluminum panels

Strap handles on guiding rails

Seats made of Single piece plastic shell in polyethylene

Integrated Grab handles on seat

All rounded corners

Pre coated aluminum paneling

Guiding grab rails on doors

CFL lighting

Fully computerized Ticket vending system should be installed to issue tickets and passes to
the passengers.

Fare
th
The State Government by notification dated 09 December, 2004 has prescribed fare for city buses in
the Municipal Corporation limit area for sitting capacity exceeding 12 (excluding driver). Since the
rates have been prescribed one year back and since then the fuel cost has been increased
significantly it is proposed to have the slab of fares as under:Upto 3 K.M.

Fare Rs.3.00

Upto 7 K.M.

Fare Rs. 5.00

Upto 10 K.M.

Fare Rs. 7.00

Upto 13 K.M.

Fare Rs. 10.00

Upto 16 K.M.

Fare Rs. 12.00

Timing of Bus Operation

Operator has to operate the bus services daily 365 a day in a year, from 7am to 11pm.
Advertisement Rights
The Total Advertisement rights throughout the contract period will remain with the company. The
advertisement revenue will be shared equally between the company and the operators.
Offer Bid
Amount quoted on monthly basis for one route, by the operator to operate and manage the public
transport system in Indore city in the prescribed form of Price Bid Offer given in these tender/ offer
document shall be firm and shall not be subjected to any exchange variations, labor conditions, and
fluctuations in freight, taxes, and any conditions whatsoever. Amount quoted by the operator shall
exclude expenditure for providing all the required staff, daily consumables, fuel, issuing tickets,
maintenance of bus to keep it in excellent condition, to fulfill all the mandatory and statuary
requirements, etc.

14 of 33

IIMA/CIPR0003(B)

Offer/Price Bid
I, the undersigned ____________________________________________
On behalf of M/S _____________________________________________
Of which I am a

____________________________________________

Hereby submit my offer as under:

I have read all the General Conditions etc. in detail and on the basis of my full study of the above
mentioned Document/s and the conditions, I undertake to operate and manage the public transport
system in Indore city, exactly in accordance with the general conditions as provided in the above
mentioned Document/s.
I undertake to pay to the Indore City Transport Services Ltd. Indore a monthly amount of Rs--------------------------------------------------------------------for the route --------------------------------------------------------------Validity of Offer
Tender/ offer shall remain open to acceptance for a period of 120 days from the date of opening of
price bid.
Performance Guarantee
The operator shall have to furnish Performance Guarantee in the form of Bank guarantee equivalent
to 10% of the total premium, which will have to be submitted at the time of agreement, valid for 60
months from the date of agreement.
Date and Place of Issuing of Form
Application form for expression of interest may be purchased during office hours from the office of
Joint Collector, District. Collectorate Office, Moti Tabela, Indore, from 05.12.2005 to 14.12.2005. The
other details can be enquired from the same office during working hours.
Date and Place of Submission of Form
Dully filled Application form to be submitted as per instructions till 4 PM on 23.12.2005 at the office of
Joint Collector, District Collectorate Office, Moti Tabela, Indore.
Other Terms and Conditions
Please attach other terms and conditions if any separately which would be analyzed in the pre bid
meeting to be held on 20.12.2005 And the common conditions prepared at the end of meeting will be
circulated to all which would become part of the offer.
THE ICTSL RESERVES THE RIGHT TO REJECT ANY/ ALL OFFERS WITHOUT ASSIGNING ANY
REASON. ACCEPTANCE OF THE HIGHEST BID/ OFFER IS NOT BINDING ON THE ICTSL.
Executive Director Indore City Transport services ltd, Indore

15 of 33

IIMA/CIPR0003(B)
Indore City Bus Transport Service (B) Cont.
Exhibit 7: Details of Contract Awarded

Route

Km

No of Buses

Operator Name

Monthly
Premium

Date of
Commencement

17.5

Ramajyoti travels

1/4/2006

17.5

Ramajyoti travels

12/6/2006

17.5

Ramajyoti travels

15/8/2006

17.5

Ramajyoti travels

6/1/2008

17.5

Ramajyoti travels

26/1/2008

19.5

Dayajeet Nimay B.L.P.L.

5,100

13/2/2006

19.5

Dayajeet Nimay B.L.P.L.

5,100

22/7/2006

19.5

Dayajeet Nimay B.L.P.L.

5,100

6/1/2008

21.0

Ramajyoti travels

1/4/2006

21.0

Ramajyoti travels

3/4/2006

21.0

Ramajyoti travels

4/4/2006

21.0

Ramajyoti travels

14/12/2006

21.0

Ramajyoti travels

15/3/2008

18.0

Ramajyoti travels

1,100

1/4/2006

18.0

Ramajyoti travels

1,100

3/4/2006

18.0

Ramajyoti travels

1,100

12/6/2006

18.0

Ramajyoti travels

1,100

15/8/2006

24.5

Ramajyoti travels

3/4/2006

24.5

Ramajyoti travels

10/9/2006

24.5

Ramajyoti travels

14/12/2006

13.5

Dayajeet Nimay B.L.P.L.

7,000

17/4/2006

13.5

Dayajeet Nimay B.L.P.L.

7,000

25/12/2006

13.5

Dayajeet Nimay B.L.P.L.

7,000

12/3/2008

17.5

Dayajeet Nimay B.L.P.L.

1,100

17/4/2006

17.5

Dayajeet Nimay B.L.P.L.

1,100

11/1/2007

17.5

Dayajeet Nimay B.L.P.L.

1,100

18/1/2007

12.5

Dayajeet Nimay B.L.P.L.

1,100

26/3/2006

12.5

Dayajeet Nimay B.L.P.L.

1,100

26/10/2006

12.5

Dayajeet Nimay B.L.P.L.

1,100

10/4/2008

14.0

Dayajeet Nimay B.L.P.L.

6,000

17/4/2006

14.0

Dayajeet Nimay B.L.P.L.

6,000

22/7/2006

14.0

Dayajeet Nimay B.L.P.L.

6,000

4/10/2007

14.0

Dayajeet Nimay B.L.P.L.

6,000

10/4/2008

10

9.0

Ramajyoti travels

501

13/2/2006

10

9.0

Ramajyoti travels

501

12/6/2006

10

9.0

Ramajyoti travels

501

15/8/2006

11

24.5

Dayajeet Nimay B.L.P.L.

1,100

13/2/2006

16 of 33

IIMA/CIPR0003(B)
Monthly
Premium

Date of
Commencement

Dayajeet Nimay B.L.P.L.

1,100

12/10/2006

Dayajeet Nimay B.L.P.L.

1,100

18/1/2007

24.5

Dayajeet Nimay B.L.P.L.

1,100

4/10/2007

11

24.5

Dayajeet Nimay B.L.P.L.

1,100

11/3/2008

11

24.5

Dayajeet Nimay B.L.P.L.

1,100

10/4/2008

12

7.5

Dayajeet Nimay B.L.P.L.

5,000

14/3/2006

12

7.5

Dayajeet Nimay B.L.P.L.

5,000

22/7/2006

12

7.5

Dayajeet Nimay B.L.P.L.

5,000

11/1/2007

13

7.5

Dayajeet Nimay B.L.P.L.

6,000

17/4/2006

13

7.5

Dayajeet Nimay B.L.P.L.

6,000

17/1/2007

14

13.0

Anam travel

5,000

6/6/2006

14

13.0

Anam travel

5,000

21/1/2007

15

13.5

Anam travel

5,000

6/6/2006

15

13.5

Anam travel

5,000

21/1/2007

16

10.5

Priyadarshini

3,000

19/7/2006

16

10.5

Priyadarshini

3,000

23/7/2006

16

10.5

Priyadarshini

3,000

18/4/2007

17

14.5

Dayajeet Nimay B.L.P.L.

501

26/3/2006

17

14.5

Dayajeet Nimay B.L.P.L.

501

17/1/2007

18

11.5

Dayajeet Nimay B.L.P.L.

6,000

17/4/2006

18

11.5

Dayajeet Nimay B.L.P.L.

6,000

11/1/2007

19

12.5

Kaya Transit

24,001

28/09/2006

22

17.5

Ramajyoti travels

17,700

29/10/2006

23

9.5

Kaya Transit

23,011

28/10/2006

24

10

Kaya Transit

25,111

6/1/2007

25

27.5

Arneja Road Lines

12,085

1/1/2008

25

27.5

Arneja Road Lines

12,085

1/5/2008

26

23.5

Dayajeet Nimay B.L.P.L.

15,555

1/1/2008

Spare bus

Dayajeet Nimay B.L.P.L.

13/10/2007

Spare bus

Ramajyoti travels

Spare bus

Ramajyoti travels

Route

Km

No of Buses

11

24.5

11

24.5

11

Source: lCTSL

Operator Name

15/12/2007
0

21/3/2008

17 of 33

IIMA/CIPR0003(B)
Exhibit 8: Agreement between ICTSL and M/s R Square Systems & Solutions

THIS AGREEMENT is made at INDORE, on Fifteenth day of April 2006 BETWEEN Indore City
Transport Services Limited, a company incorporated under Indian Companies Act, 1956 in India and
having its registered office at Plot No.30 Residency Area, A.B. Road, Indore acting through its
Executive Director Shri Vivek Aggrawal, (herein after referred to as the Company which expression
shall, unless repugnant to the context include it s successors and assigns)
AND
M/s R Square Systems & Solutions, a partnership firm having its office at Building No. 3/A, Office No.
1, Nirmal Park, Chavan Nagar, Dhankkawadi, Pune 411 043 and acing through its one of the
partner Shri Rajkumar Popatlal Singhvi, age 37 yrs, address: C-7/7, Royal Arched, Near Shankar
Maharaj Math, Pune Satara Road, Dhankwadi, Pune 411043, who is authorized by the all partners
to sign as stated here in under (herein after referred to as the Agency which expression shall,
unless repugnant to the context include its successors and assigns).
WHEREAS
A. M/s. Indore City Transport Services Ltd. (the said Company) is a company incorporated in
the state of Madhya Pradesh with the main objects of establishing and maintaining a public
transport system in the city of Indore. In pursuance of these objectives it is planning to
establish a network of passenger coaches for transporting passengers within the city limits of
Indore on fixed time schedule on the specified routes.
B. The company has been given the mandate by the Road Transport Authority, Indore to run the
city buses either on its own or to permit other transporters to do so on its behalf.
C. M/s R Square Systems & Solutions (the said Agency) is engaged in the business of
preparation of smart cards being seasonal passes to be issued to commuters. The said
Agency is desirous of entering into a contract with the said company to issue passes for the
buses run by the company on the terms and conditions hereinafter contained.
D. The Company and the Agency have desired to reduce to writing the terms and
conditions mutually agreed and as contained hereinafter.
NOW THIS AGREEMENT WITNESSTH AS UNDER:
1.
That this agreement shall be made effective from the date mentioned hereinabove. The
duration of the agreement shall be of 5 years provided the Agency maintains the guarantee of
selling minimum 15,000 passes per month during the tenure of the agreement.
2.

That the Company may terminate this contract on three months notice to Agency for
unsatisfactory performance. Similarly Agency may terminate this contract on three months
notice to the Company.

3.

That the Agency is appointed to issue various type of passes prescribed fare, and the fare so
collected shall be passed on to the Company in the following manner:-

Sr No

Types of Passes

1
2

4.

Pass Price

Share of ICTSL

Share of Contractor

New Monthly Pass

250.00

230.50

19.50

Renewal of monthly pass

250.00

243.00

7.00

In the matter of Sales:

a.
That the Agency shall issue the different traveling passes on the rate as prescribed
by the Company from time to time at the recognized centres or through its chain of
Distributors and Associates.
b.

That the Company shall be issuing all other passes and the amount to be collected
out of sale of such passes shall be determined by the Company from time to time.

18 of 33
c.

IIMA/CIPR0003(B)
That the Agency shall be responsible for marketing and selling of monthly passes.
The Agency hereby undertakes a minimum guarantee of selling 15,000 passes per
month. The Agency shall be paying the amount as specified in paragraph 3 above to
the Company for at least 15,000 passes every month.

5.

In the matter of payment of amount collected from sale of pass:

th
The amount payable by the Agency to the Company shall be paid by 5 of the next month in
which the amount is collected out of the sale of the passes.

6.

In the matter of affixing hologram on the passes:

The Company will be providing specific holograms to the Agency to be affixed on aforesaid
passes. Any pass found without the holograms shall be debited to the account of Agency and
necessary penalty shall be imposed.

7.

In the matter of PVC cards to be used for passes:

That the Agencyshall prepare the various types of passes in the format provided by the
Company. The passes shall contain photo of the pass holder and other related information
about the travelling information and validity of the pass. The card should be made of PVC.
The company reserves the right to use different cards, colors etc. for different types of
passes.

8.

In the matter of printing on PVC cards:

That the matters on the PVC cards shall be printed by a Thermal Screen Printer. The validity
of the cards shall be printed on the cards. The cards shall be printed in a readable manner
and the passes shall be printed on back side with the terms and condition of the pass. The
Agency shall be liable for proper printing of all the cards.

9.

That the Agency shall fulfill the following conditions while printing the various types of passes:

10.

a.

That the size, shape and colors of the PVC card shall be those as provided by the
Company from time to time.

b.

That the details provided in the format of passes by Company shall be printed by
Agency by Thermal Screen Printer and should be verified by Agency itself that it is
printed properly.

c.

That the Company shall exercise all the powers related to altering the format, colour,
matter or rules to be printed on cards.

d.

That the printed cards shall contain the identification number of the pass issuing
centre and serial no of the card.

e.

That the Agency shall provide all details of the various pass allocating centres, their
identification number, details of pass issued individually for various type of cards to
the Company from time to time on monthly basis indicating the monthly selling of
individual pass centres.

Hologram:
a.
That the Company shall be issuing holograms to the Agency to be affixed on the
passes. The Agency shall maintain proper records of the holograms received and
affixed on the passes. The Company shall at any time undertake the physical
verification of the unused holograms by itself or through any other professional
agency appointed in this regard.
b.

That the Agency shall affix the hologram after printing of the passes at the prescribed
place. In case the Agency fails to affix hologram, a penalty equal to pass amount
shall be imposed on the Agency.

c.

That the accounting for the holograms issued to Agency and consumption of such
holograms shall be maintained regularly. Agency shall be issued a stock of
holograms on advance payment to the company.

19 of 33

11.

12.

13.

IIMA/CIPR0003(B)

d.

That the Agency shall submit completed details of the holograms issued and
consumed each time before issue of new stock of holograms.

e.

The Company undertakes the responsibility of printing Holograms and the same shall
be supplied to the Agency in sufficient numbers so that the process of issuing cards
and/or passes does not get halted on account of non availability of holograms.

In the matter of Security Deposit by the Agency:

a.
That the Agency shall deposit 10% of the total cost of 15,000 passes as Security
Deposit with the Company in the form of Bank Guarantee and the same shall be
refunded after the expiry of the Agreement.
b.

That the Agency shall provide the said Security Deposit either in cash or in the form
of bank guarantee to the Company within 30 days of signing this agreement through
any nationalized or scheduled bank.

c.

That the said Security Deposit shall bear no interest.

Other Terms and Conditions:

a.

That all the liability regarding payment of salary to the employees and other workers
at the Pass Distribution Centres shall be of the Agency.

b.

That all the liability arising out of the appointment of workers and employees at such
Pass Distribution Centres shall be on the Agency.

c.

That the Logo of the Company shall be printed on the front and backside of the
pass.

Any dispute between parties, if failed to resolve by mutual consultation, will be referred to
arbitration under Arbitration and Conciliation Act, 1996. The decision of arbitrator will be final
and binding to both the parties.

The agreement is read, understood and agreed by both the parties and have hereto respectively
signed.
For Indore City Transport
Services Limited
(Vivek Aggarwal)
Executive Director

For M/s R Square Systems & Solutions

(Rajkumar Singhvi)
Partner

IN WITNESS WHEREOF, the parties have set their hands this Fifteenth day of April 2006.
1.

2.

Name ..

Name ..

Address..

Address..

..

..

Rate increment: 15% every year.

The Revenue will be shared in the rate of 75% and 25% respectively between ICTSL and the agency.

20 of 33

IIMA/CIPR0003(B)
Exhibit 9: Increase in No of Buses

Source: ICTSL

21 of 33

IIMA/CIPR0003(B)
Exhibit 10: No of Buses Added on a Specific Route on a Particular Day
Date

Route No

No of Buses Added

Cumulative

13/2/2006

13/2/2006

10

13/2/2006

11

14/3/2006

12

26/3/2006

10

26/3/2006

17

12

1/4/2006

14

1/4/2006

15

1/4/2006

16

3/4/2006

17

3/4/2006

18

3/4/2006

20

4/4/2006

21

17/4/2006

23

17/4/2006

25

17/4/2006

27

17/4/2006

13

29

17/4/2006

18

31

6/6/2006

14

33

6/6/2006

15

35

12/6/2006

36

12/6/2006

37

12/6/2006

10

38

19/7/2006

16

39

22/7/2006

41

22/7/2006

43

22/7/2006

12

44

23/7/2006

16

45

15/8/2006

46

15/8/2006

47

15/8/2006

10

48

10/9/2006

49

28/9/2006

19

51

12/10/2006

11

52

26/10/2006

54

28/10/2006

23

56

29/10/2006

22

58

14/12/2006

59

14/12/2006

60

22 of 33

IIMA/CIPR0003(B)
Date

Route No

No of Buses Added

Cumulative

25/12/2006

62

6/1/2007

24

64

11/1/2007

65

11/1/2007

12

66

11/1/2007

18

68

17/1/2007

13

70

17/1/2007

17

72

18/1/2007

73

18/1/2007

11

74

21/1/2007

14

76

21/1/2007

15

78

18/4/2007

16

80

4/10/2007

81

4/10/2007

11

82

13/10/2007

Spare bus

83

13/10/2007

Spare bus

84

15/12/2007

Spare bus

85

1/1/2008

25

91

1/1/2008

26

97

6/1/2008

98

6/1/2008

99

26/1/2008

103

11/3/2008

11

104

12/3/2008

105

15/3/2008

106

21/3/2008

Spare bus

107

10/4/2008

108

10/4/2008

109

10/4/2008

11

110

1/5/2008

25

112

Source: ICTSL

23 of 33

IIMA/CIPR0003(B)
Exhibit 11: Data on Key Operations of Bus Operators

Sr No

Date

Daily Fare
Box Collection

Total No of Passengers
(Including Pass Holders)

No of Passes

1/5/2008

469,988

95,219

9,762

2/5/2008

521,013

97,807

8,537

3/5/2008

550,282

106,053

9,237

4/5/2008

517,324

97,188

9,391

5/5/2008

540,203

100,920

9,388

6/5/2008

482,030

89,486

8,879

7/5/2008

425,480

84,432

9,007

8/5/2008

433,292

85,846

9,657

9/5/2008

453,132

85,195

8,969

10

10/5/2008

487,474

91,097

9,595

11

11/5/2008

488,951

90,348

9,806

12

12/5/2008

458,363

89,981

9,711

13

13/5/2008

389,320

80,038

9,399

14

14/5/2008

416,060

82,084

9,481

15

15/5/2008

413,684

82,608

9,028

16

16/5/2008

407,597

81,541

8,605

17

17/5/2008

411,042

81,188

9,127

18

18/5/2008

432,848

82,769

9,691

19

19/5/2008

433,788

84,067

9,490

20

20/5/2008

414,404

81,788

9,810

21

21/5/2008

504,488

90,487

9,333

22

22/5/2008

391,010

81,569

9,550

23

23/5/2008

364,761

72,574

6,055

24

24/5/2008

380,372

78,401

8,174

25

25/5/2008

395,343

80,444

7,849

26

26/5/2008

419,942

79,298

9,021

27

27/5/2008

391,519

77,656

8,827

28

28/5/2008

389,517

78,341

9,283

29

29/5/2008

415,674

84,326

9,068

30

30/5/2008

397,430

79,582

9,104

31

31/5/2008

376,324

74,897

8,353

437,828

85,395

9,070

Average per Day

Source: ICTSL

24 of 33

IIMA/CIPR0003(B)
Exhibit 12: Effect of Increase in Fuel Prices on No of Passengers
Date

No of
Passengers*

Before increase in
fuel prices

June 3, 2006

30,200

June 4, 2006

30,600

After increase of fuel

prices

June 6, 2006

33,400

June 7, 2006

33,500

Condition

Fuel Price
Increase

Shift Rate

Petrol Rs 4/litre
Diesel Rs 2/litre

~ 4,375
commuters shift
for every rupee
increase in
travel cost

Source: ICTSL

*Excluding passengers travelling on passes

Exhibit 13: Details of Monthly Passes

Month

Monthly Renewed
Passes

New Passes
General

Handicap

General

Handicap

Daily
General
Pass

Daily
Handicap
Pass

Total
Passes
Issued

Apr-06

446

446

May-06

659

201

860

Jun-06

842

356

1,198

Jul-06

1,586

486

2,072

Aug-06

1,898

939

2,837

Sep-06

1,950

1,108

3,058

Oct-06

1,549

1,170

2,719

Nov-06

2,486

29

1,219

15

3,749

Dec-06

1,175

78

1,283

15

29

2,581

Jan-07

2,438

87

1,398

51

59

20

4,053

Feb-07

2,256

84

1,026

52

54

3,474

Mar-07

2,613

65

1,006

67

48

3,802

Apr-07

4,385

120

36

62

4,605

May-07

3,447

74

1,420

52

169

5,165

Jun-07

3,070

84

1,396

65

330

4,949

Jul-07

4,994

145

1,719

47

322

7,231

Aug-07

5,194

199

1,986

50

2,843

10,273

Sep-07

3,437

136

2,232

102

2,450

8,360

Oct-07

2,584

125

1,934

110

6,167

10,927

Nov-07

2,564

177

1,701

58

2,325

6,834

Dec-07

3,073

150

1,795

91

1,738

16

6,863

Jan-08

3,292

142

1,835

89

2,110

21

7,489

Feb-08

3,525

157

1,404

74

1,192

37

6,389

Mar-08

3,183

116

1,446

92

1,249

13

6,099

Apr-08

3,355

128

1,241

65

1,578

24

6,391

Total

66,103

2,096

30,346

1,082

22,740

168

122,535

Source: ICTSL

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IIMA/CIPR0003(B)
Exhibit 14: Newspaper Clippings

26 of 33

IIMA/CIPR0003(B)

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IIMA/CIPR0003(B)
Exhibit 15: Key Financial Results
Particulars

FY2006

FY2007

FY2008

Investments
Number of Buses*
Total Income (in Rs)
Total Expenditure (in Rs)
Profits (in Rs) Before Tax
Profits (in Rs) After Taxes

0
12
141844
929806
-787961
-788409

0
80
9681515
4728007
4953508
3430806

0
107
NA
NA
NA
NA

Source: Auditors Report, 2006-07

*Data for no of buses is provided by ICTSL

Exhibit 16: Balance Sheet

I.

Sources of Funds

As on 31.03.2007

As on 31.03.2006

500,000

500,000

1. Shareholder funds
A) Share capital
B)Share application money
2. Reserves and surplus
3. Deferred tax liability
Total Funds Employed
II.

2,000,000
2,000,000
2,642,746
360,602
5,503,348

2,500,000

Application of Funds
Fixed assets
1. Gross block
Less:-accumulated depreciation

709,227
6,537,229
169,520

Net block
2. Current assets, loans and advances
A)Sundry expenses

709,227
6,367,709
8,768,877

B)Cash and bank balances

C)Loans and advances
D)Deposits
Total

136,432
3,700,334

1,958,080
251,340
244,637
11,222,934

8,412
0
3,845,178

Less:-current liabilities and provision

A)Liabilities
B)Provisions

2,842,367
10,925,195
1,162,100

Total
Net current assets
3. Miscellaneous expenditure (to the extent
not written off or adjusted)
A)Profit and loss account
Total Funds Applied
Source: Auditors Report, 2006-07

448
2,842,815

12,087,295

1,002,363

(864,360)
788,409
0
5,503,348

2,500,000
(Rs)

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IIMA/CIPR0003(B)
Exhibit 17: Profit and Loss Account
(Rs)

Particulars

2006-07

2005-06

Income from advertising, premium and passes

9,681,515

141,844

Total income

9,681,515

141,844

Direct expenses

2,102,181

929,313

Indirect expenses

2,456,306

493

169,520

Total Expenditure

4,728,007

929,806

Profit/(loss) before tax

4,953,508

(787,961)

Less: Tax expenses

1,125,580

360,602

36,520

448

3,430,806

(788,409)

(98)

3,430,708

(788,409)

Add: Opening balance

(787,961)

Balance carried to balance sheet

2,642,746

(788,409)

A)Basic earning

68

(15)

B)Diluted earning

13

(3)

C)Face value per share

10

11

Income

Expenditure

Depreciation

Deferred tax expenses

Fringe tax expenses
Profit after taxes
Short provision of earlier year

Earnings per share

Source: Auditors Report, 2006-07

Exhibit 18: Breakup of Cost and Revenue Elements

(Rs)
Income

As on 31.03.2007

As on 31.03.2006

Advertising receipts

5,540,220

83,592

Monthly premium

2,586,704

26,867

Revenue from seasonal passes

1,080,591

3,385

Sale of tender forms

174,000

28,000

Hoarding rent

300,000

9,681,515

141,844

31.03.2007

31.03.2006

Electricity expenses

306,733

11,456

GPS/PIS recurring expenses

781,340

Office lease rent

139,728

27,420

Road tax and vehicle expenses

874,380

72,720

2,102,181

111,596

31.03.2007

31.03.2006

Total
Direct Expenses

Total expenses
Indirect Expenses

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IIMA/CIPR0003(B)
Income

As on 31.03.2007

As on 31.03.2006

101,316

107,771

33,600

16,854

5,612

3,631

493

Computer expenses

19,414

Deepawali expenses

1,539

38,721

9,613

363,622

4,000

60,563

625,585

52,571

53,256

545

1,941

98,275

162,927

1,612

27,000

251,231

Regional workshop on
Urban transport expenses

134,137

Salary expenses

179,000

27,000

Stationary expenses

97,022

251,231

Telephone and fax expenses

74,025

6,652

98,000

521,141

2,456,306

818,210

Advertisement expenses
Decoration expenses
Audit fees
Bank charges

Employees welfare expenses

Functions and celebrations
Guest entertainment expenses
Legal and professional expenses
Motor car expenses
Newspaper, books and periodicals
Office expenses
Postage expenses
Renovation expenses

Preliminary expenses written off

Travelling expenses
Total Expenses
Source: Auditors Report, 2006-07

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IIMA/CIPR0003(B)
Exhibit 19: Bus Operators Economics
Rs/bus/month

Source: Discussion with bus operators (Mr.Manoj Ghiriwal of Dayajeet Nimay B.L.P.L. and Mr.Arshi
Khan of Ramajyoti Travels)
Item
Capital Cost

2008

2006

2,300,000 per bus

1,800,000 per bus

32*30*150/3.5= 41,000
assuming 150 km of
service per day per bus
and an avg of 3.5 kmpl

29*30*150/3.5= 37,000

2 Drivers

4,100*2= 8,200

4,100*2=8,200

2 Conductors

2,700*2= 5,400

2,700*2=5,400

1,000

1,000

9,000
13,000

4,000
9,000

Cleaning

1,500

1,500

Tires

7,000

7,000

Details in Exhibit 6

Details in Exhibit 6

Taxes (Motor Vehicles

Tax)

1,180

1,160

Insurance

4,500

4,500

Advertising (60% )

7,320

15,000

Bus

Fuel cost

Staff
Operational
Cost

1/4 Official staff per bus

Maintenance: New
Buses
For 1 year Old Buses

Route premium
Miscellaneous
Cost

Pass (80%)

For first four months in

2008
0.80*6,500 pass holders
per month*300/112 buses=
14,000
For 2007
0.80*6,300 pass holders
per month*250/85
buses=15,000

Revenue

Fare Box Collection

13,572,655/112 buses
=121,184
(for the month of May
2008)

0.80*2,100 pass holders

per month*250/62 buses=
7,000

110,000 *30/33 buses

=100,000 (for the month of
April 2006)
131,200*30/40 buses
=98,400 (for the month of
June 2006)

31 of 33

IIMA/CIPR0003(B)
Exhibit 20: GPS Economics
(Rs)

Item
Bus Equipment (Paid by bus operator)
PIS Cost (Paid by ICTSL)

45,000 per bus stop

500,000

Router

150,000

Sim Card

50,000
100 per bus per bus stop

2 PIS Displays in Office

90,000

Air Conditioner

20,000

3 Servers

1,000,000*3=3,000,000

UPS

76,000

Local PC

30,000

S/W
Switch
Broadband Services
Operational Cost
(per month)

18,247 per bus*112 buses =2,043,664

Digital Map of Indore

Broadband-TATA Indicom
Capital Cost

Amount

120,000
6,500
2,000 per bus *112 buses= 224,000

Spares

3,000

Salaries (Staff of 4)

4,000

Total Operational
Cost (per month)

231,000

Monthly Premium
from ICTSL

2,400*112= 268,800

Source: Discussion with GPS operator

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IIMA/CIPR0003(B)
Exhibit 21: Range of Fuel Price in Major Cities

Diesel

Petrol

Source:www.ptac.org.in (need to give full details)

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IIMA/CIPR0003(B)

Exhibit 22: Demands Made by Unions

Along with this letter, the union had submitted a list of 17 routes