APSRTC woos AC train passengers

While the Union Railway Minister Lalu Prasad Yadav is targeting potential air travellers through reduced AC coach fares, the state-owned Andhra Pradesh State Road Transport Corporation (APSRTC) and private operators here are trying to woo the potential AC 3/2 tier railway passengers of long distance routes by offering more comfort and convenience through their luxury Volvo bus services.

With the niche passenger segment opting for Volvo services, the luxury services of both RTC and private operators are yielding higher rate of profit as compared with their normal, high-tech services.

The APSRTC currently owns 75 Volvos and plans to add 25 more to its premium segment in the immediate future.

"Many long distance passengers of AC 3/2 tier railway compartments are now preferring Volvo services as they offer more comfort and convenience besides saving the travel time in some cases," Kanna Laxminarayana, state transport minister, told Business Standard.

In all, the corporation is operating 1,035 buses on the 472 inter-state routes connecting important destinations in Karnataka, Tamil Nadu, Maharashtra, Orissa, Pondichery, Goa and Chhattisghar. The private operators in Hyderabad, on the other hand, had a combined fleet of 86 Volvo buses a couple of months back

According to the minister, the Volvo services of the APSRTC currently offer a much higher average rate of profit at Rs 4,340 a day as compared with Rs 1,200-Rs 1,400 coming from its normal hi-tech bus services.

In terms of investment, a Volvo bus costs up to Rs 80 lakh a unit, compared with ordinary and hi-tech buses whose price ranges from Rs 6 lakh to Rs 13 lakh. However, in terms of attracting high-end passengers, the minister says, it is worth investing in such high-cost luxury fleet.

For the APSTRC, the proposed acquisition of 25 new Volvos forms only a minuscule part of its overall investment plans. Being the single largest state-owned road transport corporation in the entire country with a fleet of about 19,000 buses under its wings, the APSRTC has drawn up plans to replace 2,000 older buses with new ones in each consecutive year starting from this year. Ashok Leyland and Tata Motors are the sole suppliers of engine-cum-chassis of these new buses while the bodies are built by other firms in Hyderabad, Bangalore among other locations.

The growing demand for high-end luxury services in the state can be gauged from the fact that the Volvo services operated by the corporation are being run at 77 per cent occupancy rate (OR) in the rainy July month as compared with the average OR of 70 per cent recently achieved by other services of the RTC this year.

With the state government giving more flexibility in tariff determination and operational freedom to the management of the corporation as part of a reform package, the RTC is expected to achieve 74 per cent occupancy rate by the end of the current year as compared with about 60 per cent a couple of years back.

"A one per cent increase in OR will yield an additional income of Rs 40 crore for the corporation. Our endeavour is to increase the OR to a maximum of 78 per cent in the coming years," Laxminarayana said.

It handled 65.22 lakh km a day and earned a daily average revenue of Rs 8.76 crore from its operations last year.

The RTC enjoys a monopoly in the public transport with 90 per cent of the total routes in the state being its exclusive domain under the nationalised status though the more profitable long distance routes have already been opened for private operators.

Even in the Left-front ruled West Bengal and Kerala, the percentage of nationalisation in the total routes available in those states is only 10 per cent and 13 per cent respectively, the minister said.