Stage 5 Developing the Improvement Plan

Bus Regulatory and Organization Plan

Improving public transport services or introducing such services may require new institutional arrangements for system planning, operating and regulation. Some of these institutions are within the public sector – especially the planning and regulatory bodies. Organizations providing transport services could be in either the private or the public sector. The organizations to be created will vary and will depend upon the legal framework. There is a need to establish an agency with an overall view of the transport sector and to prepare well coordinated plans. Similarly, the existing regulatory mechanisms – which essentially are the Regional Transport Authorities – should be strengthened or recast to shoulder more responsibilities. If the concerned authorities decide to encourage the private sector, a different type of regulatory mechanism will be required. Similarly, the private sector will also require some assistance to organize efficiently. Plans will fail if the institutions to implement them are lacking.

Improvement options and sub-options include:

  • Strengthen the legal and regulatory framework for urban bus services
    • Develop by-laws for bus service regulation, approved by the City Council
    • Assign legal rights to regulate, plan and manage bus services
  • Establish or strengthen the Transport Authority
    • Establish a bus service co-ordination unit within the city administration
    • Establish a route licensing and/or operating permit authority
    • City takes responsibility for network and route planning
    • City has responsibility for all aspects of passenger transport services
  • Reform the market for bus services
    • Require all services to register with the city
    • Open market to new entrants
    • Break up monopolies and uncontested market sectors
  • Place all services under contract to the Transport Authority
    • Services can only operate under permit from the city
    • Establish route or area operating contracts or franchises
    • Set service parameter, quality and standards
    • Award services or franchises under competitive tendering

A Special Purpose Vehicle may be necessary to oversee the planning and operation of bus services. This should represent all stakeholders (transport related). The SPV may be headed by the City Mayor and could have the following as members:

  • Collector (Vice Chairman)
  • Chief Executive of the City Development/Planning Authority.
  • Commissioner of the City Corporation.
  • Representative of the Police.
  • Representative of Commuters’/Citizens’ Associations.
  • Transportation Planning Expert.
  • Representative of a Government Transport Organisation.
  • Chief Executive of the SPV.

Initially, the SPV can be set up with an Executive Order, but when it enters into contracts it should be given a corporate status. This could be done by registering it as a Government Company. The function of the SPV would be to assess the transport scenario in the city, to plan the transport system and to contract services from bus operators. It would have to be authorized for this purpose by the State Government. The bus operators could be private entities or a government company. The internal structure of the SPV is shown in Figure 4. Once the system stabilizes, the SPV could be converted into a statutory body with powers of regulation, fare setting etc.


Figure 4 Organizational Structure of an SPV

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