ASRTU RATE CONTRACT INITIATIVE – AN INNOVATIVE MODEL TO PROMOTE PUBLIC-PRIVATE PARTNERSHIP

Association of State Road Transport Undertakings (ASRTU) is an apex coordinating body working under the aegis of Ministry of Road Transport & Highways Govt. of India. ASRTU has 62 members collectively operates 150,000 buses and serve 70 million passenger a day and provide efficient, economic, safe and reliable public transport facility in urban, hilly and rural areas across the country. 

Contracting is one of the crucial aspects for Bus Operators around the world. One of the key services offered by ASRTU is a common procurement service through Rate Contract, which is decided by Standing Committee (Supplies & Contracts). In order to facilitate the hiring of premium buses and City Life Urban Service Buses, ASRTU has invited bids from different manufacturers for the hiring contract of buses.

Key Contract Terms

ASRTU floats an enquiry and invites manufacturers to submit their quotes on following parameters:

1.  Luxury Coaches

a) The cost per km excluding fuel for different models based on daily utilisation and the fleet size in the tabular format.

Luxury Coaches

b)  Fuel Mileage under plain roads for different models. The fuel mileage for Hilly terrain, City routes and bad/traffic congested roads can be negotiated jointly by STUs and the operator based on actual operation of latest 3 months. Recommended fuel filled be filled by the operator and the cost will be reimbursed by the STUs.

2.   City Life Urban Service Buses

a) The cost per km excluding fuel for different models based on daily utilisation and the fleet size in the tabular format.

b) Fuel Consumption will be paid by STUs in addition to the above hiring price. The manufacturer needs to quote Fuel Mileage. STUs will monitor fuel mileage during initial 3 months period of induction of buses. The higher fuel mileage will be taken as benchmark for the payment.

Contract Period and Price Revision

The rate contract is valid for the period of two (2) years. Whereas, the contract entered between the STUs & the approved operator during the above period shall be for five (5) years.

There will be no revision of hiring rates for the buses in operation for the first two (2) years. Subsequently, there will be an increase of 2.5% every year on account of the increase in variable cost. 

Operating Model

ASRTU has entered into Rate Contract for hiring of premium buses for all STUs. The manufacturer is responsible for providing the buses and engages the operators for the operation of the buses. The company provide service support through nearest company’s workshop, so that operators ensure in providing the buses in good working condition to the concerned STUs.

The operator is also responsible for engaging experience drivers, as well as, takes care of insurance and to pay applicable taxes. The STU is responsible to provide bus conductor, fare collection system, parking facilities, space for maintenance & upkeep of the buses, branding and marketing, taxes & levies (VAT, passenger tax, special road tax etc.)

The STU are responsible for defining SLA (Service Level Agreement) and operational issues like penalties for absence, late running, breakdown, maintenance time, payment terms etc.

Advantage of ASRTU Rate Contract

ASRTU is promoting PPP (Public Private Partnership) in the bus sector. The rate contract is an innovative model as STUs members do not require to go for separate biddings and can directly entered into contract with bus manufacturers. Further, the manufacturer / operator are responsible for the upkeep and maintenance of the buses. This will increase the fleet efficiency.

The manufacturers can also make investment in the project as it assures them standard terms and conditions. This also reduces the effort to prepare proposal for each STU and the same Rate Contract can be followed by all STUs.

Existing Rate Contract for Hiring of Buses

ASRTU has worked out rate contract with 4 key players:

Luxury Coaches

1)      M/s Volvo Buses India Pvt. Ltd.

2)      M/s Scania Commercial Vehicles India Pvt. Ltd.

3)      M/s Daimler India Commercial Vehicles Pvt. Ltd.

City Life Urban Service Buses

4)      M/s JBM Auto Ltd.