Debate over BMTC privatisation resurfaces: Balancing public welfare with private efficiency

“The government spends on health, education and transport not for profit. The improvement in people’s quality of life is the benefit the government seeks,” Ramalinga Reddy counters the argument that BMTC is incurring losses.

The recent debate over privatising Bangalore Metropolitan Transport Corporation (BMTC) pits public welfare against market logic. Supporters of privatisation, like Mohandas Pai and Bengaluru South MP Tejasvi Surya, argue that BMTC’s monopoly is inefficient and that private operators could bring capital, scale, and innovation, especially in high-demand corridors. 

Bengaluru has always had state-owned transport corporations running buses. The demand to bring in private players to public transport is not new. 

Muralidhar Rao, a mobility activist now 77, advocated this way back in 1996 through a public interest litigation, which did not see the light of day. He has been campaigning constantly for ending the monopoly of state-owned bus corporations.

“I’m pitching for the restructuring of BMTC on the lines of the Delhi power supply model, which involves private-public participation and a 49-51% stake for government and the private sector each. Officials will be from the government, and the managing director will be from the private sector,” he explains.

“The government does have a social obligation. So the government needs to be a part of it. However, even the government entities have vested interests at play, so to balance profitability, efficiency and social obligation, the private sector needs to be involved intelligently, by bringing in rules and regulations through BMLTA,” he advocates.

This will allow buses to run profitably while also bringing accountability and transparency, he argues. What about schemes like Shakti, which offer free travel to women? “Let them be paid through Direct Benefit Transfer,” he says.

When free transport matters

Tara Krishnaswamy, who studied the impact of the Shakti scheme recently, was also a part of the ‘Bus Bhagya Beku’ campaign launched by Citizens for Bengaluru a few years ago. 

She notes that two-thirds of women who use the Shakti scheme for daily commute are from lower strata of society. In Bengaluru, 34% of them have got a new job or better-paying job because they did not have to worry about travel expenditure.

“This was possible only because the transport was state-owned. The small jobs, such as cooking and domestic work, mattered to these women, but they were not big enough to pay for the transport. Free transport put all the money in their pocket. In a private transport scene, this cannot be imagined,” she points out.

“The pressure of bus occupancy because of the Shakti scheme was so high that the government had to increase the number of buses—something no other campaign could do. We will soon have 10,000 buses on the road,” she adds.

She dismisses the argument that BMTC has a monopoly on Bengaluru’s roads. 

“Today, private buses do exist on the road. BMTC does not have a monopoly. Every company on Outer Ring Road, every private school or college, every factory, hospital, and research institution has buses. They may not have a stage carrier licence (authorisation to pick up and drop random people at designated stops), but they do carry lakhs of people. So Bengaluru’s transport already has a huge private share.”

“If you introduce private stage carrier buses, BMTC bus occupancy and services will fall. The impact will be on the poor, affecting the economy and GDP of the city,” she argues.

Minister responds

State transport minister Ramalinga Reddy has been stressing the importance of public transport remaining truly public ever since the controversy began. “The government spends on health, education and transport not for profit. The improvement in people’s quality of life is the benefit the government seeks,” Reddy told DH, countering the argument that BMTC is incurring losses.

“If private operators are allowed to run buses, they will run only where they see profit. Who will serve the underserved areas? Private operators will even hike the fares, making travel unaffordable for the masses,” said Reddy, citing the example of very high prices quoted by private bus operators during Dasara for outstation trips.

“Those who advocate for private buses, have they actually travelled in buses? They seek to serve private vested interests,” he added. The state has more than 3.8 buses per 1,000 people, while in other cities and states, the ratio is much lower. Forty-eight lakh people use BMTC buses, making it the most successful public transport model. Many progressive cities around the world, such as Singapore, offer free bus services, he pointed out.

A slippery slope already?

The government is the best custodian to run public transport, and it should never be privatised, says Shaheen Shasa, an urban mobility activist volunteering with Bengaluru Bus Prayanikara Vedike (BBPV). She highlights that BMTC is already inevitably moving towards privatisation to secure FAME funds from the central government to run electric buses. 

“This model is the gross cost contracting (GCC) model, where electric buses are currently operated; the government pays per kilometre for outsourced buses with drivers, fuel, etc., and employs only the ticket collector,” she explains. 

She points out that in this model, the bus owners cut corners and save money by not investing in trained drivers, paying them less, and sometimes cutting maintenance costs as well. This can put the safety of pedestrians and commuters at risk through rash or negligent driving, or affect punctuality and performance. 

“We know that these drivers are not paid on par with BMTC drivers, and their training is not as good as well. They do not receive the same benefits as BMTC drivers. All these affect the quality of service,” she adds.

“Now these electric buses are new. In the upcoming years, we need to see how maintenance is handled. If more electric buses are deployed, there will be more privatisation. Eventually, all buses will be private if the fleet is 100% electric and the operating model is the same. The government will have less control over the fleet and operators, and will have to yield to all the terms they dictate. It’s already on a slippery slope,” says Shaheen.

To give context, subsidies under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) scheme are available only to transport corporations that procure electric buses through the Gross Cost Contract (GCC) model, in which operators are paid per kilometre while ownership remains with the agency. This condition effectively compelled BMTC to adopt the GCC mechanism for its e-bus fleet. Today, Bengaluru has the second-highest number of electric buses among major Indian cities—1,799 out of a total 7,067, second only to Delhi’s 2,526 out of 3,222.

‘BMTC isn’t perfect, but…’

“There are many problems with BMTC, but those are not because it is public-owned,” she observes. They are basically because they do not invest in new buses. They used to have an outdated trip completion target that could hit the operations.”

“BMTC is also under pressure to be profitable, so they have revenue targets for trips. This sometimes leads to competition between buses, leading to too many buses too quickly on the same route,” she adds. 

“A normal response to a problem is to fix it. What the advocates of privatising public transport say is that there is a problem with the government, so let’s bring in private players. It’s like throwing the baby out of bathwater,” she says. 

“If Mohandas Pai or Tejsvi Surya have any issues with BMTC, let them specify precisely what they are, and we can all fix them together with BMTC. There is nothing the BMTC cannot solve. Useful, constructive conversations can help address issues and improve transport in the city,” Shaheen concludes.