Bus companies do good business under JNNURM

While companies have benefited from the Centre’s special package for buying buses under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the states have not got their share.

The UPA government had approved Rs 4,723.97 crore to jointly fund 14,504 buses for states in the second stimulus package in early 2009, of which Rs 2,088.84 would be borne by the Centre. However, an internal report of the Urban Development Ministry said it has released Rs 1,067.42 crore to the states so far.

Minister of state for urban development, Saugata Ray, cited the lack of reforms initiatives for the non-release of funds. “According to the memorandum of agreements with the states, they were supposed to have undertaken many reforms like creation of an unified transport authority in the cities where these buses would ply. The states had also agreed with the Centre to roll out smart ticketing systems and a dedicated urban transport fund, among other things. Most of the states have failed to do so.”

But the companies have done good business. Tata Motors have bagged most orders. An official of the UD ministry said, “The Tatas had launched modern buses ahead of other competitors. That may be the reason why maximum orders went to the company from the states.”

The second stimulus package announced by the Government on January 2, 2009, said: “States, as a one-time measure up to 30.06.2009 will be provided assistance under the JNNURM for the purchase of buses for their urban transport systems.”

Tata Motors had received orders for 5,888 buses of different types for state undertakings across the country, over a period of time beginning February 2009 up to March 2010. Of these, the company has till date delivered 4,656 buses. The remaining are under various stages of delivery.

Tata Motors makes buses at its plants in Lucknow and Dharwad and that of its associate company, ACGL – Goa. The company has the capacity to make about 2,000 buses per month.

A company spokesperson said, “We will not be able to share revenues, because the company does not disclose revenues, specific to lines of business.”

Ashok Leyland received orders for 5,209 buses, of which the company has already delivered 3,342 buses. A company spokesperson said, “The JNNURM program helped STU (state transport undertakings) volumes pick-up last year. There was significant growth in the bus market at 23 per cent due to the initiative last fiscal.”

Volvo received orders for around 800 AC low-floor buses. The buses are priced at '80-85 lakh. Around 95 per cent of the orders have been delivered.

Akash Passey, managing director Volvo Buses India Private Limited said, “We saw about 35 per cent growth in volumes last year and JNNURM was a good contributor. A good part of our revenues came from the initiative.”