United Nations Public Service Awards Case Studies

Indore is a centre of trade and commerce serving the state of Madhya Pradesh and central Indian region in particular. Rapid industrial and commercial development coupled with rise in population in recent past has contributed to a large-scale increase in traffic on city roads. This increasing intensity of traffic has resulted in manifestation of a number of problems like congestion, delay, accidents, pollution etc., which has posed a potential threat to the economic vitality, and productive efficiency of the city.
In the absence of a proper public transport system with well planned routes and schedules the Urban Transport Scenario led to mushrooming of Para transit operations through Tempos and Minibuses. These modes with their obsolete technology and operating environment were threat to traffic safety as well as environment of the city. The operations were highly disorganized, poorly equipped and ill-managed.
In-efficient and in-effective public transport compelled the urban population to rely on private modes of transport. Urban Population in Indore heavily relied on private vehicles for urban trips and there was a large increase in the private vehicle ownership. This situation had lead to unsustainable urban transport scenario in Indore with further increase in congestion, delays, pollution and fatal accidents. Acute bad behavior and tendency of overcrowding had made travel by public transport a nightmare for average commuter.
Quantitatively there were about 1.82 Million Urban passenger trips generated daily with modal share of the then existing Para Transit Option was only to the tune of 16.5 %, while the other trips were carried out by Private Vehicles.
The entire citizenry of Indore was affected by the aforesaid urban transport scenario. Most affected were the low income group citizens and women. Lack of specialized and effective regulatory agency to operate and manage the public transport system in Indore resulted in growth of unorganized and informal modes competing for passengers with each other on city roads. There were no designated stops and no schedules or routes which resulted in chaos on city roads.
The people of Indore especially the poor and woman were so badly affected by the ever deteriorating urban transport scenario in the city that road accidents and cases of molestation of women in tempos and minibuses had became a daily occurrence. New system specially takes care of these segments of the society by allocating space to the female passengers and training of the staff to ensure good behavior coupled with proper information system.

What is the initiative about? (the solution)
To provide an effective mass transport system for city of Indore initiative was taken by the District Administration of Indore in collaboration with Municipal Corporation and Indore Development Authority. A Special Purpose Vehicle (SPV) company (Indore City Transport Services Limited) was established in December, 2005 to provide Public Transport Services in city of Indore. ICTSL is a Public Limited company having stake of all agencies involved in providing city governance including District Administration, Indore Municipal Corporation (IMC the third tier Government) and Indore Development Authority (IDA). The Governing Body of the ICTSL is constituted of elected as well official members. The aim of ICTSL is to provide quality public transport initially starting with High Capacity Low Floor Buses and further graduating to a full fledged Bus Rapid Transit System with segregated bus lanes. The operations are managed and monitored By ICTSL but financed and run by private operators under an Innovative Public Private Partnership Model. The Incorporation of ICTSL achieved the goal of establishing an urban transit agency which is directly accountable to the people of Indore. This Initiative through its PPP Model has combined the efficiency of private capital with regulatory strength of the Government. The services provided are efficient, cost effective, convenient as well as safe. The company uses advanced technology and is in the continuous process of up gradation. Technology like GPS based real-time vehicle tracking, fleet management, real-time passenger information system for convenience, electronic ticketing and pass management for greater transparency in operations and speedy processing has been very effectively used. The users of ICTSL derive direct benefits in terms of savings in travel time, safety and convenience. Women are specially benefited by this service in terms of security and sound behavior of ICTSL Operators. Non-ICTSL users are benefited indirectly in terms of savings in vehicle operating cost (VOC) due to reduced congestion on the road network and good health due to reduced pollution. Benefits accruing to the community/economy are reduction in accidents and environmental pollution. ICTSL City bus Service till now is totally accident free service unlike other public transport services in the country. ICTSL has helped in bringing down pollution levels in the city as it has initiated the modal shift from private vehicles to public transport as well as polluting Para Transits to ICTSL Buses. Quantitatively the Success and achievements of the Initiative can be measured by its increasing rider ship. ICTSL Buses carry an average of 100 thousand passengers daily. ICTSL operations promote the use of public transport. A modal shift of about 6% out of the total daily trips from private Vehicles to ICTSL Buses has taken place since its inception in December 2005.

Who proposed the solution, who implemented it and who were the stakeholders?
Effective Public Transport is the need of every metropolitan city. For cities that are growing at a rapid pace, it becomes the most essential vehicle for pace of growth. Indore could easily be identified as the fastest growing metropolitan city in central India and the most important feature missing here was a good public transport service. It had become really important for the city administration to provide the people of the city with a safe and reliable mode of transportation at an affordable price. The concept and the solution was conceptualized and implemented by Mr. Vivek Aggarwal, IAS, District Collector Indore who is now also Executive Director of Indore City Transport Services limited a special purpose company incorporated by him to provide a dependable solution for the need identified above. It aims at establishing a public transport backbone to facilitate the rapid growth of the city. The private-public partnership model has been designed to benefit the citizens, the company and the private partners. The company is now investing the income generated from the service in the development of transport infrastructure of the city. The management of the company is entrusted with the Executive Director under the supervision of the Board of Directors. The members on the board hold their office by the virtue of their posts .There are six members on Board of Directors with Collector of District Indore as its Executive Director who has been vested with powers for effective management of the new transport system under Public Private Partnership model. Besides the Collector the Mayor of Indore chairs the board and Regional Transport Officer Indore and Superintendent of Police, Indore (ex-officio) are special invitees in all meetings of the Board. It has also been resolved that all the private partners shall also be invited to the meetings of the board so that their valuable inputs are used for smooth and proper functioning of the company and decisions are taken which are detrimental to the interest of investors.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The main objectives of the initiative are to create specialized and effective management agency to monitor cost effective and good public transport services within the city of Indore through private partnership Further to develop support systems for improving transport infrastructure. The strategy adopted for the successful implementation of the project included establishment of a SPV to operate and manage the public transport system to incorporate best practices and customized technology with a financial Model to benefit all the stakeholders. ICTSL has been incorporated as a Public Limited Company with paid up capital of INR 2.5 millions which is being held by the Indore Municipal Corporation and Indore Development Authority in equal proportion. The management of the company is entrusted with the Executive Director under the supervision of the Board of Directors. The strategy was to create an umbrella organization for planning and implementation of the project with private capital. Therefore the management and control of all common operations is with ICTSL. To ensure uniform service and management some measure like centralized office, uniform fare system, single pass for all routes, uniform salary structure, uniform dress for drivers and conductors and a common depot have been provided for. Whereas buses are owned and operated by private partners, there are separate partners for running operations of advertisement on buses, issuance of common passes, building of bus stops on BOT basis and management of GPS and PIS systems. All private partners have been selected by a transparent tendering process with a definite revenue sharing mechanism. The relationship between the company and private partners is governed by contracts. The fare policy is to ensure equitable access to poor and to provide incentive for upper middle class passengers to prefer these buses over their own vehicles. Fare is Low enough to secure fullest utilization and viability of the system. Uniform fare collection system with electronic machines across all operators has been implemented. The city bus route network system has been planned and designed in a scientific manner to cater to the requirements of people commuting between place of work and place of stay. Color coding of routes and buses and their numbering has been carried out for the convenience of commuters. A unique financial model is the mainstay of this initiative. The revenue sources are daily ticket collection, passes, advertisement, monthly premium, bus stops and PIS system. Daily ticket collection goes to the operator, revenue from passes is shared 20:80 and advertisement revenue is shared 40:60 between the company and operator. To further explore additional sources of income to the company, ICTSL is executing Clean Development Mechanism. The drivers are trained by engineers and Traffic Department covering topics relating to traffic rules and driving styles to ensure safe driving and strict discipline on the roads. The conductors are trained in various aspects of behavior required to provide exceptional customer service.Apart from growth of the present system a full fledged Bus Rapid Transit System is under implementation within the same mechanism created through ICTSL.

b. What were the key development and implementation steps and the chronology? No more than 500 words
The nominee identified the need for an efficient public transport system for the city and floated his concept of introducing modern public transport system under PPP model. A meeting was called in the month of October, 2005. All decision makers of the city were present. The decision taken was to create a solution that was Reliable, Affordable and Safe. The task sounded very difficult, especially looking at the availability of funds and relevant infrastructure but it was the need of the city. The result of the brainstorming was to create a SPV to provide Public Transport services to City of Indore going with the concept proposed by the nominee. ICTSL was incorporated on December 01, 2005 with an objective to operate and manage the public transport system of Indore. Seven key people were identified as the Board of Directors. Indore Municipal Corporation and Indore Development Authority shared the paid up capital of 2.5 million INR equally. The execution was the responsibility of Mr. Vivek Aggarwal (Collector, Indore). The model decided was of public-private partnership. The model was designed to ensure 'Minimum Investment with Maximum Returns' for all parties concerned. Nominee designed it with flawless technique and scientific approach. The financial model provides maximum profitability for the company as well as the operators. The operational aspect provides impeccable control for both the parties and use of latest technology. The target launch date was decided as January 26, 2006. It meant only 56 days after incorporation of the company to implement public transport service in city that was craving for it for more than 15 years. Survey was conducted to identify the routes that would cater to maximum passenger traffic. Eighteen such routes were identified and finalized taking suggestions from the traffic department. Ultra-modern low-floor bus was chosen to run on the streets of Indore. Bids were invited and a pre-bid meeting was hosted to explain the concept to the prospective bidders on December 23, 2006. The operators actively participated in the bid process and we had the routes booked. Applications were received on January 17, 2006 from companies interested in taking the rights for advertising on the buses. Various advertisers participated and we had the highest bidder at INR 25000 per bus per month. The monthly pass system had to become the backbone of the entire system. Monthly pass costing INR 250 to enable the passenger to travel unlimited on all routes was finalized. The bids for issuing passes were called and on January 20, 2006 we had a company ready to setup 15 centers across the city. Now we had all the parties in place, the operators, the advertisers, the pass issuers, the drivers, conductors & administrative officers. Stage was set and 5 days were left. The buses were to be delivered, the advertiser's branding was left, the ticket issuing machines had to be programmed and the manpower had to be trained. The pass-issuing machines were imported and it was all set to issue the first pass on 26th of January 06. First batch of 8 buses rolled on the appointed day and thereafter there was no looking back.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
The Main Obstacles encountered were, Lack of Political Will: First obstacle was that initiative for this project was not taken by political executive. It was an initiative of a civil servant .There was a need to create a political consensus for sustainability of the project. By involving various organs of elected representatives including Member of Parliament, Members of Legislative Assembly, municipal councilors and prominent citizens right in the beginning by organizing seminars and one to one meetings this problem was overcome. At present the sense of ownership of the project is complete. Disbelief in Government Organization: There was a general disbelief in the masses as well as investors initially in the whole concept and the ability of ICTSL to deliver was doubted. Even the response to first tenders issued was lukewarm but first few days of operations proved the worth of the system as well as its sustainability. The sense of ownership amongst general public became so strong that passengers would not allow others to litter even chew beetle nut while traveling in buses. Resistance from existing operators: There were 550 monstrous tempos running in the city and about 400 mini buses along with a number of unauthorized vehicles. These operators were running these services with the help of anti social elements and they tried to create a political storm by raising issue of unemployment. This was the most ticklish issue as these operators even threw stones and broke the window panes of new buses in some incidents. Our resilience and our resolve to compete in the open market with better services paid of. Tempos have been phased out of the city and mini bus owners are also phasing of their buses and are becoming part of ICTSL system. The co-ordination and integration of various Government agencies in Transport sector and bringing them on single platform was also a challenge. The same was overcome by establishment of public limited company with equal stakes of various government agencies in Infrastructure development and service delivery. Elected and nominated Members of various Government agencies were involved in the governing body of ICTSL. There was a lack of financial capability of Government agencies which made it difficult to mobilize large investments in Public Transport Sector. This was overcome by Innovative Public Private Partnership Model to mobilize Finances for Public Transport Infrastructure. The Revenue was shared in a balanced way between the private and public (ICTSL) counterparts, where the ICTSL share is being deployed in raising common infrastructure. Lack of trained manpower: Lack of trained manpower was a major constraint. Through a PPP model most of the manpower has been deployed by the private partners. A very small team drawn from the pool of District Administration is able to run the service in a very efficient and cost effective manner.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The concept of the new public transport system in Indore was initiated keeping in mind the limited resources available. Public Private Partnership model with innovative revenue sharing mechanism was adopted to fulfill the requirements of financial, technical and human resources and costs associated to successfully implement the initiative. A company “Indore City Transport Services Ltd” was incorporated to operate and manage the public transport system. The new SPV is constituted as a Public Limited Company incorporated under the Companies Act, 1956. The Registered Office of the company is situated at 30 Residency Area, Indore. The authorized capital of the company is INR 2.5 millions divided into 250 thousand equity shares of INR. 10/- each. The initial paid up capital of INR. 2.5 millions is being held by the Indore Municipal Corporation and Indore Development Authority in equal proportion. Financial evaluation of the project was carried out in-house with the objective of determining its financial viability and assessing its potential for implementation on a commercial format. Financial model of the project ensures returns for operators, financial institutions, pass vending agency and the company. Main sources of revenue for the system are fare collection, advertising, and biding amount by private participants and share of revenue generated through monthly passes. Revenue sharing mechanism allows 80% of the pass revenue and 60% of advertising revenue to the operators besides their daily fare collection. Besides there is self financing and income generating mechanism for bus stops also. The revenue generated through these stops is shared with Municipal Corporation. The passenger information system display screens are another source of revenue to ICTSL. To further explore the additional sources of income to the company, ICTSL is executing clean development mechanism project. BOOT, BOT and Swiss Challenge method of selecting technically qualified agencies was adopted to ensure the use of latest technical knowhow available in the transportation sector through out the world. Interestingly, ICTSL as a company plays the role of an umbrella organization with very little man power employed. The requirement of technical, skilled and semi-skilled man power is being fulfilled by the operators and service providers as per the agreements executed between them and the company. The financial model with this kind of revenue sharing mechanism and responsibility sharing set up has ensured good profits to the company as well as sustainability of the system. An initial paid up capital of only INR 2.5 million has resulted in total present investment of 400 million INR in the system. Further amount of 120 billion INR is being invested under the same mechanism to set up segregated bus lanes for Bus Rapid Transit System in the city.

Is the initiative sustainable and transferable?
Yes the Initiative is Transferable as well as sustainable. The Use of Public Transport for urban Mobility is the most sustainable option in the Transport Sector. This not only saves energy, it reduces congestion, delays, valuable time of users and improves traffic Safety. The Financial Sustainability of the ICTSL Bus Operations is evident from the PPP model itself. The Rolling stock has been financed by private partners and the revenue share of ICTSL from operations is sufficient for the technological up gradation in the transport infrastructure. Cutting edge technology has been deployed with internal resource generation .It has been a win win situation for company, private partners and citizens. The Social Sustainability of the ICTSL initiative is evident from the patronage of citizens belonging to various sections of the City of Indore and their sense of belonging towards their own Bus service. The economic sustainability is evident from saving of time, reduction in accidents, and convenience to the general population. Improvement in Urban Environment is also another economic as well as environmental sustainability indicator. Indore model of Public Transport was put to vote by a Leading News Paper in India. “Times of India” conducted a survey recently after a spate of accidents by blue line buses in Delhi. Comparisons were drawn with Bogota model of Columbia and Curitiba model of Brazil. Indore model got 92% of the vote as the best model of public transport which can be followed in Delhi. In the last one and a half years cities like Bhopal, Jabalpur in Madhya Pradesh, Kota, Udaipur, Jodhpur in Rajasthan have adopted Indore model and have started operations. Amritsar, Ludhiana, Jallandhar and Patiala of Punjab are in the process of implementation following Indore model and consultancy is being provided by ICTSL. Raipur in Chhattisgarh will be launching the service on the same lines shortly. The Department of Urban Development in Government of India has written to state governments to follow Indore model for setting up public transport services in their cities. Officers and public representatives of almost all states have visited Indore to study this system which has resulted in its replication in nine cities of India already. Many other cities especially with one million plus population are in the various stages of implementing this model. Department of Administrative Reforms in Government of India has picked this model as a national best practice. It has funded the documentation of the entire model for ensuring its replication. The nominee was chosen to make a presentation on the civil services day i.e.21st April 2007 in the presence of Prime Minister of India and attended by Cabinet Secretary, all the heads of services of Indian Union as well as Indian states.In nutshell the Indore model has not only sustained in Indore it has proven its replicability for Indian cities. Many international experts have visited Indore to look at the system including transportation consultants from World Bank, faculty from BRT institute USA and representative from US federal department of transportation.

What are the impact of your initiative and the lessons learned?
Identification of the need of masses and initiative to alleviate that need by involving all stakeholders was a major contributor to success. Absence of an organized public transport system in city of Indore with a population of 2 million plus was a dire necessity. Right from the beginning various organs of city government were involved and a body which represented the three main institutions of the city i.e. District Administration, Municipal Corporation and Indore Development Authority was created. Extensive consultations and involvement of various citizen groups allowed the initiative to become a project owned the common people of Indore. A unique financial model with a very small public investment has become the mainstay of success. A company with a paid up capital on only INR 2.5 million has attracted private capital to the tune of INR 400million in the project. It is further implementing a project worth INR120 billion for setting up bus rapid transit system in the city. Public Private Partnership model for delivery of public services has proven track record. This methodology was put into operation resulting in massive success. Combination of the might of state with efficiency of private capital has resulted in creation of a very successful public service delivery model which is not only sustainable for the city of Indore but has also proven its replicability for other cities. A very lean public organization with a large work force employed and managed by private partners has proven another success. The company is being managed by only 5 full time employees with the top management working part time along with their designated duties under District Administration. In spite of a very lean organization the efficiency and cost effectiveness of the service is being admired by experts. Zero subsidy and complete market orientation is another aspect of this project which is unique. Public transport in most parts of the World is highly subsidized. This project has proven that an urban public transport system can be run profitably without any state subsidies. Further details about the project can be seen on website www.citybusindore.com


Institution Name:		Indore City Transport Services Limited, Indore
Institution Type:		Public-Private Partnership
Contact Person:		Vivek Aggarwal
Title:		Executive Director
Telephone/ Fax:		917312499888
Institution's / Project's Website:		917312304488
E-mail:		vivagg_2005@yahoo.com
Address:		30,Residency Area, AB Road Indore
Postal Code:		452001
City:		Indore
State/Province:		Madhya Pradesh
Country:		India

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information