Restructuring urban public transport in India

Project:
Restructuring urban public transport in India
Recommending a set of restructuring options for the State Road Transport Corporations

India’s bus network is organised through 26 State Road Transport Corporations (SRTCs), most of which were founded shortly after independence. They are generally one of the largest public sector undertakings in a state, are a drain on government budget and are politically sensitive to any intervention, so it was crucial that they were reformed if the bus service was going to become viable.

In 1998, DFID and the Asian Development Bank asked us to recommend a set of restructuring options for the SRTCs in India, and develop a regulatory framework for the bus transport sector. The governments in Andhra Pradesh, Madhya Pradesh and Orissa were offered options for the restructuring of their transport sectors, with a primary focus on reforming the large, loss-making SRTCs. Our recommendations provided the governments with a path that would move a large majority (up to 95%) of bus services into private hands, allowing the government to focus on best-in-class regulation. 

Our capacity building programme was responsible for the underwriting of the successful implementation of the restructuring. Several other states, especially the newly created states like Chhattisgarh also took up Adam Smith International’s recommendations.