Urban Mobility India conference 6th December 2012

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Aesthetics Easy access for disabled Passenger Comfort

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Aesthetics Easy access for disabled Passenger Comfort

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Aesthetics Easy access for disabled Passenger Comfort

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Aesthetics Easy access for disabled Passenger Comfort

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Aesthetics Easy access for disabled Passenger Comfort

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Reach to Public Easy access for disabled Passenger Comfort

Transportation- Emerging Trends Single Step Entry Driver Friendly Passenger Infotainment Onboard GPS Better Reach to Public Easy access for disabled Passenger Comfort

Transportation Network- Latest models Hub and Spoke Model Hub and Spoke Model involves transportation of goods using heavy vehicles along major highway corridors. (A-B) The distribution inside the cities is done using light/medium duty vehicles. Similar concept is used to transport passengers inside cities. The “Feeder bus network uses BRT for mass transit and ICV’s for local transport. A B

Transportation Network- Latest models Bus Rapid transport system (BRT) Dedicated bus lanes for mass transit. High speed corridors with excellent frequency of buses.

Economics of Intercity buses Reason for increase in operating expenses is to provide better comfort, more safety, improved aesthetics and technological upgrades to meet stringent emission norms.

Fuel Major constituent of vehicle operating cost. Typically contributes 40-50% of overall operating cost. Customers have option to choose between diesel, CNG, hybrid and Electric powertrain options Diesel price is linked with global crude prices and hence availability of fuel and price movement issues exist in long term. Hybrid/ Electric options are very environment friendly but infrastructure for charging and high cost of these systems is an issue currently. With the need to reduce emissions to Euro4/ Euro 5 levels, vehicles are fitted with SCR. These devices require urea solution for operation which increases the total fuel cost.

Vehicle Maintenance To maintain high uptime of transportation system, vehicles need to be maintained periodically. Preventive maintenance ensures excellent service availability while ensuring good overall life of vehicles. Items such as Tires, consumables, grease and damaged parts need to be replaced on periodic basis. Maintenance of vehicles require dedicated service depots and adequate stocking of parts. A centralized stores management system would be required to order parts/ manage inventory.

Driver/ Conductor Availability of skilled drivers is an issue currently. Trained drivers from proper Driver training institutes is necessary. AL currently has 2 institutes running and is setting up another 4 institutes across the country. Conductors are currently being used for cash collection on a daily basis. Alternative is to use e-ticketing system ( usage of smart cards)

Statutory Duties & Levies/Insurance/ Administration Statutory levies such as parking charges, toll fees, road permit costs need to be borne by transport organizations. Vehicle insurance is needed to cover for accidents/ natural calamities/ riots. Administration department is needed to manage the availability of vehicles for public service.

Financing of buses for urban transport Current transportation system depends on various unorganized sectors to ensure vehicle availability. The model proposed in this presentation covers consolidation of various sections under a single cloud operated by large OEM. The OEM becomes an one stop shop for state transport organization. The high capex required for purchase of vehicles is avoided and allows deployment of more vehicles. AL has implemented various such models across its customer base. The notable ones include: SLCTB- Sri Lanka Lagos – Nigeria, Delhi – DTC and DIMTS. While models operating in Nigeria and Sri Lanka are self sustaining transport models, the models in Delhi requires a subsidy from government.

70% of revenue allocated for above expenses Sri Lanka Model Zero subsidy, cash positive model. Daily collections are deposited into escrow a/c LAL (Associate company of AL) only provides vehicles on financial lease. Agreed revenue sharing: LAL- 20% SLCTB-80% SLCTB CONDUCTOR LAL TICKET COLLECTION FINANCING FUEL DRIVER INSURANCE PERMIT/ ROAD TAX MAINTENANCE 10% of collections deposited in escrow a/c set off against actuals 70% of revenue allocated for above expenses

Lagos Model Bank purchases vehicle from AL and provides it to operator on financial lease. Bank ensures cash collected is allocated in foll. Priority: Vehicle EMI, Fuel, Maintenance and Profit to operators. LAMATA OPERATOR CONDUCTOR BANK TICKET COLLECTION BUS PURCHASE FROM AL FUEL DRIVER INSURANCE PERMIT/ ROAD TAX MAINTENANCE

Delhi Model DIMTS Delhi had planned a fleet size of 4500 buses After 2 years, only 400 buses has been deployed. Financial and operational capability of operators is a huge bottleneck. DIMTS CONDUCTOR TICKET COLLECTION CLUSTERS AL Can be customized FINANCING MAINTENANCE 10% advance + 90% on delivery 3 Months advance+ monthly billing DRIVER/ REG/ INSURANCE PERMIT/ ROAD TAX FUEL

Model proposed for Pune STU AD REVENUES AL CONDUCTOR SUB- CONTRACTOR DEPOSIT ESCROW A/C TICKET COLLECTION FINANCING MAINTENANCE DRIVER/REG/ INSURANCE FUEL PERMIT/ ROAD TAX STU will pay subsidy to AL directly if revenue from ticket collection is less than contractual rate payable to AL.

Advantages of Pune Model AL becomes single point contact for STU and hence would be able to centrally manage the entire transportation system. High capex can be financed by OEM’s thus facilitating large volume deployment. The vehicle purchase cost avoided can be spent on infrastructure of service depots and with an increased FSI ( Floor space index), revenues of transport corporation can increase substantially. Can be implemented quickly and due to low initial capex, additional vehicles can be deployed. The increased vehicle parc can improve service in high density areas. AL’s driver training institutes located across the country can facilitate recruitment of skilled drivers.

Pune bus day Initiative Ply 3000 Buses on 1st Nov Add new routes 349 High Frequency In high density An initiative by Sakaal times, Sakaal Media group to improve public transportation system in Pune. PUNE BUS DAY

Pune bus day Impact NO CONGESTION

Pune bus day Impact SAFER TRAVEL

Pune bus day Impact LESS POLLUTION

Pune bus day Impact BETTER COMFORT

Pune bus day Impact NO TIME DELAYS

Comparison of fuel consumption between bus, 2 wheeler and 4 wheelers Pune bus day Impact Comparison of fuel consumption between bus, 2 wheeler and 4 wheelers   Bus 2 Wheeler 4 Wheeler Passenger Capacity Nos 50 2 4 Mileage Km/ Liter 3 45 16 Fuel Price Rs/ Liter 51.5 72 Fuel Cost Rs/ km/ passenger 0.34 0.8 Savings in fuel if people travel by bus instead of 2W/4W 0.46 When implemented across 50 cities, the fuel savings will be Rs 2500 Crores p. A Assuming 500 new buses are deployed to transport 30 people for 200 kms in a day, the fuel savings will be Rs 13.8 Lakhs(~Rs 50 Crores p.a)

Financing of vehicles for JNNURM 2 Source of funds for vehicle purchase under JNNURM 2   North Eastern states Union Territories Rest of India Central Govt 0% 35% STU’s 15% 20% Balance funds 85% 80% 50% The balance funds required to facilitate purchase/ deployment of vehicles can be raised through 2 methods: Equity investment from private sector, Debt funding provided by financial institutions.

AL’s proposal for JNNURM funding The funds provided by STU’s/ Central government can be used for investment in service depots and setting up transport routes. The transportation models implemented already by AL ensures upfront capital expenses is minimal while creating a self sustaining transport model. AL can co-ordinate setting up of transportation network by identifying suitable partners for vehicle operation, maintenance and administration while providing attractive financing terms. AL’s driver training institutes can facilitate availability of well trained skilled drivers across STU’s. STU 50% capex 50% capex AL Assist in setting up channel partners TICKET FARE COLLECTION SERVICE DEPOT FUEL DRIVER INSURANCE ROAD TAX PERMIT MAINT.

“Aapki Jeet, Hamari Jeet”