Indore City Buses - Most Profitable Public Transport in India
There are 5Es to Leadership – Envision, Engage, Energize, Enable and Execute. The individuals or the companies that have proved to be Game Changers have always walked these 5 Es.
This example comes from an organization that is known to be inept and corrupt, from a state that would figure in India’s most backward list, from a city which does not figure in the Top 10 cities list in the country. And yet, this is the finest, most comfortable & efficient and most profitable city public transport system in the country.
Indore, like most Indian cities, till 3 years back had a public transport system run by “contract mini buses” run by operators who got their permit either due to their connections in the government or their ability to bribe the bureaucrats and politicians. They ran jam packed buses, with ill trained drivers, misbehaving conductors, and scant regard to any pollution norms. Those who could not jostle in to find a place had equally poor ‘autos’ to fall back on.
It all changed because a young IAS officer, Vivek Aggarwal, as the collector for Indore had a simple dream to provide his people world class public transport.
He engaged the city authorities to his vision and a public-private partnership company called, Indore City Transport Services Limited (ICTSL) was incorporated on December 01, 2005 with an objective to operate and manage the public transport system of Indore.
ICTSL started with a capital of just Rs. 25,00,000 ($50k) invested jointly by the Indore Municipal Corporation and Indore Development
The governing principle was “minimum investment, maximum returns”; diligent planning involved keeping in mind the interest of the consumers, the company and the operators. The details were thought over and implemented on ground with excellence within 56 days (for a solution that the city needed for the past 15 years).
The Buses were still to be run by Private operators who paid monthly premiums to ICTSL. The sources of revenue for the bus operators were the daily fare box collection, share of revenue generated through advertising on buses and monthly passes.
Operators were financed 100% by the bank and an agreement has been executed between the company, the bank and the operators to have an escrow account.
The new ‘Starbuses’ sourced from Tata Motors had the same tariff of Rs 3- 12 as that of the old contract mini buses. For people (read consumers) these low floor, GPS enabled buses with computerized vending machines were a huge wow. They found the buses to be clean, safe for women, comfortable and running to time (with electronic signboards showing their status). They found the staff to be well behaved and courteous and they rewarded ICTSL with a Rs 10 million ($ 200k) profit within the first year of operation.
The buses were color-coded according to routes, the staff were trained in etiquette by a management agency, A time-table to run the buses run from 7 am to 11 pm was made and the buses were washed, cleaned and air dried next day, followed by an inspection from the ICTSL staff.
Within 3 years, ICTSL, runs 110 buses and 100 CNG cabs on call. It has won a lot of admiration from both Indian and International agencies; with a World Bank team expressing interest to study the model. A lot of Indian cities are planning to replicate the model. But thus far no one has executed it on the ground.
A great story of exemplary envisioning (thinking of a modern public transport), engaging (getting support to implement it), energize (the various stake holders and engage them into the vision), enable (train the people, have a management system in place) and execute – finally plan and think about each detail and implement the model within 56 days from the drawing board.
Google Developer Expert, Google Cloud Champion
Amit Agarwal is a Google Developer Expert in Google Workspace and Google Apps Script. He holds an engineering degree in Computer Science (I.I.T.) and is the first professional blogger in India.