DTC takes ad route to facelift

With all of Delhi getting ready for the 2010 Commonwealth Games, the state-run Delhi Transport Corporation (DTC) too has got into makeover mode.

Its fleet of buses is getting a facelift and the crumbling bus shelters are making way for sleek stainless steel structures. Plans are also afoot to delete some of the red ink splashed all over its profit and loss account.

At the moment, DTC is hugely unprofitable. It reported a net loss of Rs 1,036.77 crore in 2007-08 on an income of Rs 387.60 crore. But the corporation has put in place plans to reduce these losses. These involve opening up new revenue streams with minimal capital expenditure on its part.

First, it has started selling space to advertisers on its revamped bus shelters. No fewer than 200 such shelters have already come up all over Delhi and another 250 are in the works. These have been built not by DTC but by private companies who get to keep whatever advertising revenue the shelter generates in excess of Rs 1 lakh per month.

The 200 shelters that are ready will rake in Rs 24 crore for DTC in the next one year. Significantly, the Delhi government has extended a helping hand by putting its advertisements on a number of such shelters. Once all 450 are ready, the annual revenue could be as high as Rs 54 crore. By 2010, DTC plans to have 2,500 such shelters, 1,400 of which will be built through public-private partnership. 
 

FINANCIAL RESULTS                  (Rs in crore)
Year	Total Income	Total Expenditure	Net Loss
2004-05	407.05	1115.43	708.58
2005-06	448.56	1266.37	879.38
2006-07	405.25	1391.78	954.82
2007-08	387.60	1424.37	1036.77
(Tentative)

DTC will also earn Rs 4,500 per bus for the contract awarded to a service provider for installing global positioning system (GPS) facility in all its 6,500 buses. The annual revenue generation out of this service is expected to cross Rs 35 crore by the end of 2010.

The corporation has already awarded the contract to ORG Technologies, a Gurgaon-based IT solutions provider. ORG will be given advertising space in the buses as well as in 500 bus shelters for the monthly payment they make to DTC.

DTC has a total of 5,942 employees and wages account for as much as 47.13 per cent of its total expenditure. In 2007-08, the traffic income of a DTC bus stood at Rs 18.56 per kilometre compared with the staff cost of Rs 25 per kilometre per bus.

The corporation now plans to outsource the operation and maintenance of buses to private players and thereby save the staff cost up to Rs 5.46 per kilometre per bus. Though the staff cost per bus at Rs 19.54 will still be higher than the revenue, the losses will come down sharply.

DTC also plans to commercially exploit its 35 bus depots which have a land bank of 175 acres by way of advertisements and setting up budget hotels. However, the immediate priority will be to create enough parking for its planned expansion of the fleet strength as the current parking lots can accommodate only 3,600 buses.

"Our immediate priority is to create parking space for our buses. Once it is achieved, we may consider building multi-level parking facility to accommodate cars," DTC Chairman & Managing Director Ramesh Negi said, adding: "At the same time, we will also explore the advertisement potential at each bus depot. And wherever it is commercially viable, we would be setting up budget hotels."

At the moment, DTC is busy modernising its fleet of buses with some generous help from the Delhi government, which has financed the corporation's Rs 1,800-crore acquisition of 5,000 low-floor buses fitted with the GPS facility "" about a quarter of these will be air-conditioned.

DTC officials said by 2010, the corporation would have a fleet size of 6,500 buses and a majority of the 3,500-odd existing buses would be off the roads.

All these plans look nice. But DTC also needs to factor in competition from large bus operators. Under the action plan of the Delhi government, buses run by small operators will be replaced by 2010 by companies which will be given permission to run various routes chosen through a bidding process. Companies like Orix, ILFS, SRS Travels and some other logistical companies have shown interest in the project.