Economic crisis drives New Delhi’s public transport to the brink

New Delhi, August 5th, 2020.

Bus & Car Operators Confederation of India – (BOCI) & Delhi Contract Bus Association leading associations in passenger transport in Delhi/NCR, who looks after the interest and welfare of contract carriage and All India Tourist Permit busesis seeking government intervention to save the sector from a total collapse. The corona outbreak has severely impacted the passenger transport segment in North India particularly in Delhi/NCR.  The public transport sector has urged the government to consider waiver of road and passenger taxes for next three quarters, deferment of tax payments, extension of vehicle insurance validity, Deferment of EMI payments for next 6 to 12months and the Interest component be waived off  for the deferred period, discount of 10% to 25% on Toll Taxes/ Fast tags must be invoked and validity of documents like Fitness certificate, Permit, Driving License, Protection against defaulter Companies and Schools, Registrations or any other relevant cause need to be extended or deemed to be renewed till March 2021 and subsidies on diesel and tax reduction on spare parts for a stipulated period which would help to reduce the cost of running the vehicles.

Bus & Car Operators Confederation of India (BOCI), representing private passenger transport operators and having over 17 lakh operational buses on Indian roads, out of which, about 1.50 lakh buses are operated by various STU’s. The remaining 15.5 lakh buses, accounting for almost 30 Crore passenger trips, are run by private operators which are the member of various Associations & Federations affiliated to Bus & Car Operators Confederation of India (BOCI).  As we know, passenger transportation not just in India, but globally is one of the worst affected sectors on account of the Covid19 lockdown. Having suffered a financial loss of ₹65,000 crore in last two months, the business has no money to continue operations in coming month and is in the verge of collapse. The sector has made several representations to the authorities in the transport department, Ministries of state and to the Hon’ble Deputy Chief Minister of State for New Delhi to draw their attention to multitudes of issues faced by the sector

Mr Harish Shabhawal, General Secretary, Delhi Contract Bus Association & VP North, BOCI, New Delhi said that ‘The Government has taken steps to support the economy through various schemes and actions, however they have not addressed the public transport sector. The research units of road sector are continually keeping a tab on the deteriorating condition of this sector. More than one crore people are directly or indirectly dependent on this sector. But due to pandemic, financial crisis in the passenger transport segment has reached its peak.  Unless the Government provides timely and necessary support to the sector the whole ecosystem stands the risk of collapse. The transport operators are under acute financial strain and about 65-70% of their vehicles are still off the road. Further, given the present situation, the Bus operators and transporters are under duress and the situation is further aggravated by depletion of their available finances. This coupled with statutory compliance, motor insurance, EMI interest, Establishment cost, salaries, working capital etc. has created a crisis of mammoth proportion for the operators. Additionally, the uncertainty of timelines for resumption of operations, hygiene guidelines, impact of social distancing etc. will create further burden on the sector.”

“There is no revenue generation for School Bus Operators, as schools are closed indefinitely. As per the guidelines issued by Hon’ble Supreme Court of India for CBSE and other schools, the buses are painted with yellow color and they run on Green Fuel (CNG). They would require government intervention as these buses cannot be used anywhere else. But during Lockdown they have incurred costs like EMI’s, Salary of Staffs, Insurance, Parking Charges, Road Tax and several Government Compliance like, ESI, PF etc. are still to be borne by School Bus Operators. On the other hand, we emphatically say that most of the schools are having surplus funds on account of hire Charges from School Children. Therefore, under these compelled circumstances, schools should come forward voluntarily to save and help operators. Domestic and International tourism is on standstill due of pandemic and hence there is no earning for tourist buses as well.  Office Goers are working from home, IT-Sector & multinational & national organizations are still closed. Employees transportation is almost stalled as well. There is no revenue generation and financial inflows as mostly payments from business houses/companies are re-stained and existing finance with small bus operators as well as that of big bus operators is depleting fast. The small bus operators or who are in fact, drivers cum operators (around 75%) do not have enough resources  to even SUSTAIN their families and won’t be able to pay for the statutory and regulatory compliances until few months after the normalcy is re-stored” says Gurmit Singh Taneja, Working President of Delhi Contract Bus Association & Chairman Delhi State BOCI.

The key asks of the sector to various authorities in the Ministry of Road Transport and Highway (MoRTH):

Ø  MoRTH should issue Advisory to all State Governments /UT’s for WAIVER OF ROAD TAX/MV TAX/PASS. TAX ETC. for the year 2020-21.

Ø  Validity of Documents e.g. Fitness, Permit, Driving License, Registrations or any other relevant cause, whose extension of Validity could not or not likely to be processed because of lockdown/pandemic since Feb-01 2020 be extended or deemed to be renewed till March-2021.

Ø  MoRTH should direct NIC to do needful rectification in software to avoid imposition of Penalties or late fees etc.

Ø  Discount of 10% to 25% on Toll Taxes/ Fast tags must be invoked.

The key asks of the sector to various authorities in the Government of India and Ministry of Finance are:

Ø  Deferment of EMI payments for next 6 to 12months and the Interest component be waived off for the deferred period. 

Ø   Availability of Soft Loans without Collateral and Credit Facility to Bus Transporters by Banks & others Financial Institutions should be ensured like that extended for MSMEs.

Ø   Interest on existing working capital loans availed by Bus transporters should be waived for the DEFERRED PERIOD on pro rata basis.

Ø  NPA norms should be relaxed. Seizure of vehicles must stop in view of Judgement of the Supreme Court.

Ø  Validity of Comprehensive Insurance Policy Third Party Insurance & Own Damage Insurance should be extended till March 31, 2021. Third Party Insurance should be exempted from GST as it is mandatory and is for social object.

Mr. Prasanna Patwardhan, President, Bus & Car Operators Confederation of India (BOCI) said, “Due to COVID – 19 pandemic, transport sector has been severely affected and we have suffered huge financial losses. Now the operators have no money to continue operations for the coming months and are on the verge of collapse. We urge the government to provide relief by deferring various taxes for a period of six to twelve months for all operators and provide diesel at subsidized rates. We hope that our requests will be considered by the Government of India as the buses in most segments are idle with no hopes of revival in the near future.” 

BOCI has also addressed these issues in a letter to the Honorable Prime Minister requesting for a job security of 1 crore people who have not been paid during the lockdown and requested government to take responsibility to pay salaries for 3 months. Rescheduling of all EMIs and Banks should be instructed to reschedule loans by giving at least six months moratorium period to all customers and to waived off the interest for the moratorium period. Banks and NBFCs should be advised to provide top-up working capital at low interest rates to resume business. 

Additionally, BOCI have asked insurers to extend the third-party insurance policy for three months and Insurance coverage should be given for the entire lockdown period, plus 15 days, without taking any additional premium. Similarly toll tax should be waived of for three months after lockdown period is over by giving extension of the period of concession to toll operators. Banks can support these toll operators by providing them enough liquidity to sustain for next six months and recover it going forward.

BOCI also requested Government to issue advisory to all State Governments to consider waiver of Motor Vehicle & Property tax for at least three months and to immediately clear the pending bills to PPP partners as they had made sizeable investment in the public transport infrastructure.

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