MSRTC Saved Rs.90 Crores with an Electronic Ticketing System

Summary:

If Maharashtra’s 15,000 strong bus fleet could reduce the cost of printing every ticket even marginally, through an e-ticketing system it could save a pile of money. Here’s how they actually did it.

Highlights:

Maharashtra State road Transport corporation, lowered the administrative costs of producing each bus ticket and added about rs 90 crore to MSRTc’s bottom line. By allowing bus conductors to print tickets on the spot using ETIMs, Lubal effectively eliminated many layers of administrative costs.

Reader ROI:

Cost saving potential of e-ticketingHow handheld machines are modernizing the transportation industry

It services the second-most populated state in the second-most populated country in the world. And you’d know that just by observing Maharashtra’s State Road Transport Corporation. With over 15,000 buses and about 65 lakh passengers a day, the MSRTC isn’t small fry.

“From owning and maintaining a printing press to handling labor and to paper charges that go into printing tickets everything adds to the cost of a ticket.”

But because of its post-independence heritage, the bus service with its trademark red-and-white fleet wasn’t run optimally. The MSRTC flagged off its first bus in 1948. By its own admission, most folks didn’t give it more than a couple of years to shut down. Yet 62 years later, it’s still around and caters to a daily audience equal to the population of 34 of the world’s smallest countries. It’s also proudly living by its motto: Where there’s a road, there’s an ST bus. Staying true to that credo, however, forced the Rs 4,000-odd-crore enterprise to run uneconomical routes, which hurt its bottom line. In a report released last year, the Comptroller and Auditor General of India (CAG), showed that the MSRTC had racked up losses worth Rs 1,300 crore between 2002-2007. Admittedly, it’s a track record the MSRTC has improved since, posting a small, but neat, Rs 188 crore profit last year. It still had legacy issues though. Especially with the old-fashioned way it arranged for its tickets. A bus conductor handing out colorful stubs of paper tickets only represents the last stage in an archaic system the MSRTC used. Take for example how the MSRTC printed its own tickets — at a press it owned and maintained. This set up also compelled it to create a system to distribute tickets to hundreds of bus depots. None of this came cheap. “There are costs associated with everything,” says S. D. Lubal, DGM-EDP, MSRTC. “From owning and maintaining a printing press to handling labor and to paper charges that go into printing tickets. Everything adds to the cost of a ticket.” The costs didn’t stop there. There was a price to pay for the administrative-heavy process (the MSRTC employs over 10,000 people) of maintaining ticket inventories and squaring accounts with thousands of bus conductors at the end of everyday. So following the lead of other state-run bus corporations like the KSRTC (Karnataka State Road Transport Corporation), Lubal supplied its bus conductors with handheld Electronic Ticket Issue Machines (ETIMs) in a bid to cut costs and ensure better monitoring of its buses. By allowing bus conductors to print tickets on the spot using e-tickets, Lubal effectively eliminated many layers of administrative costs.

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“From owning and maintaining a printing press to handling labor and to paper charges that go into printing tickets everything adds to the cost of a ticket.”

At just over 600 grams, the handheld machines are modernizing MSRTC’s entire system and making ticketing less of a chore. Conductors no longer have to make entries on sheets of paper while hanging onto dear life or pour over waybills to tally their daily collections. Nor do clerks at depots have to worry about adding up the day’s tickets because they can now update their systems by plugging in the e-tickets. The project, says Lubal, is part of an e-governance initiative that aims to provide passengers with an online booking facility. It’s run in partnership with Trimax IT Infrastructure and Services on a build, operate and transfer (BOT) basis. “That allowed us to put up the best in technology for the least cost,” says Lubal. The e-ticketing implementation is based on LAMP technology, an acronym for a solution stack of free, Opensource software. On the back of the e-tickets, Lubal brought down the price of producing every ticket to 21 paise — a 60 percent drop. This is inclusive of the initial investment and the manpower required to run the project. The e-tickets project currently covers 55 depots and once it goes live at all of MSRTC’s 247 depots (with about 22,500 machines) — which Lubal is confident can be done well before their November 2010 deadline — the project will save MSRTC about Rs 25 lakh a day or over Rs 90  crore a year. The e-tickets also allow the bus fleet to circulate memorandums, letters,  instructions, general standing orders, and notices across the state without getting into tedious paperwork. The larger system attached to the e-tickets also provides an online inventory management module to manage vital and heavy consumption items. Finally, the e-ticketing solution gives MSRTC’s management a bird’s eye view of their organization, giving it more real-time information, which could help it select more profitable routes. Now maybe the CAG won’t throw the MSRTC under one of its own buses.