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REVIVAL PACKAGE OF ASSAM STATE TRANSPORT CORPORATION AND ITS ACHIEVEMENTS SO FAR

Assam State Transport Corporation or ASTC, as it is popularly known all over the North-Eastern India, has been the premier organization in the passenger-transportation sector with the prime objectives of providing passenger transportation at the most economic rate, affordable to all pockets, with high safety standards and infrastructural facilities all over the State of Assam for bus parking and passenger-amenities and its passenger friendly operating crews.

HISTORICAL BACKGROUND:

The STATE TRANSPORT, a State Government department, was started in the year 1948 with the objective of providing a cheaper mode of transportation to the people of north-eastern India, with 8 Nos. of buses, plying initially between Guwahati and Nagaon. It played an important role in fulfilling its objectives besides connecting the remote and interior places of the region to their respective district headquarters. As its network started spreading, the socio-economic development of the region started getting momentum and slowly and gradually it became a part of the socio-economic life of the people of this region and they held this organization in high esteem.

With the increase in population and economic activity the need for a specialized organization to cater to the needs of passenger transportation was felt, which culminated in corporatising the STATE TRANSPORT into ASSAM STATE TRANSPORT CORPORATION on 31st March, 1970. Hence, ASTC has a long history of providing passenger-transportation services to the people of Assam in most efficient and organized manner.

ORGANISATIONAL SET-UP:

The affairs of the Corporation is being managed by a Board of Directors and its executive power has been vested in the Managing Director, who looks after the day to day management. At present, there are 70 Officers and 3954 employees in the Corporation looking after the various aspects of the Corporation. There are over 125 Nos. of stations and sub-stations all over Assam with workshops at Guwahati, Jorhat, Tejpur and Silchar and maintenance centers at Nagaon, Sibsagar, Tinsukia, North-Lakhimpur, Dhubri and Goalpara to look after the major and minor repairs of the ASTC buses.

DECLINE AND ITS CAUSES:

After years of successful operation, the condition of the Corporation started deteriorating and it reached such a point that the closure of the Corporation had become inevitable. The primary reasons for such state of affairs can broadly be attributed to :

1. Over-staffing vis-à-vis the runner vehicle position.
2. Mushrooming-growth of private-owned passenger buses and the resultant un-healthy competition.
3. Un-economic fare structure, which failed to keep pace with the increase in the price of the essential inputs like HSD, Tyres and Spare-parts.
4. The age-old policy of providing services on the grounds of social obligation at the cost of economic losses.
5. Numerous agitations and Bandhs which not only caused economic losses but contributed to the decline in the work-culture of the employees as well.
6. Mis-management and lack of far-sightedness to cope with the changing scenario.

The condition of the Corporation had come to such a situation that the monthly earning fell to Rs.10.00 lakhs with the runner vehicle position at only 70 buses. The employees of the Corporation had not received their monthly salary for the past 12 months and work in most of the department had come to a stand-still. Besides, the outstanding liabilities, mostly to its staff and suppliers, had gone upto Rs. 14000.00 lakhs and serious views were being expressed to close down the Corporation.

The present Government after considering the importance of Assam State Transport Corporation have decided to revive the Corporation and decided to take the following measures:

1. Reduction in the number of employees and bus-staff ratio from 1:40 to 1:7 by way of implementation of the Voluntary Retirement Scheme.
2. Improvement in over-all work-culture in the Corporation.
3. Increase in the number of buses.
4. Repair of old and shut-down buses.
5. Innovating scheme for ensuring a monthly regular income of ASTC.
6. Commercial utilization of the spaces belonging to ASTC.
7. Generation of method for additional revenue of ASTC.
8. Repayment of liabilities of ASTC.

On the above principles, the following schemes were taken-up:

(a) Reduction of 1800 number of employees under VRS:

The Scheme was designed in such a manner that the Government has to pay only the amount due to the employees without any provision for Golden-handshake or weightage for the services due to the employees. The VRS component consist of the following:

1. CPF dues- both employees and employer's contribution.
2. Gratuity as per the Gratuity Act.
3. Un-utilised leave salary for a maximum period of 240 days.
4. Savings of GIS.
5. Unpaid sanctioned dues of the employees.
6. Unpaid salaries of 14 months.

Total 1800 employees were released under VRS with a fund of Rs. 6630.00 lakhs provided by Government during the year 2001-02 and 2002-03.

(b) It has been decided to repair 200 number of shut-down buses of ASTC at a cost of Rs. 357.00 lakhs and for purchase of new buses under the Annual Plan @ Rs. 400.00 lakhs each year for three years i.e. Rs. 400.00 lakhs X 3= Rs. 1200.00 lakhs.

(c) For improving the work culture amongst the employees of ASTC it must be ensured that regular monthly salary to the employees are paid. The total salary requirement of the employees of ASTC before the introduction of VRS was Rs. 2200.00 lakhs per year, which could barely be met out of its own income. Therefore, the State Government have decided to provide Non-Plan support per year to ASTC @ Rs. 1000.00 lakhs for three years amounting to Rs. 3000.00 lakhs.

(d) The Assam State Transport Corporation possesses 750 bighas of land all over the State of Assam and all these lands are located at prime locations of the city/towns. In addition to the parking of vehicles, these spaces can be used for commercial activities for which the ASTC has decided to build commercial arenas. The estimated cost for construction of such arenas in the following places are shown below in the first phase:

(e) There is huge liabilities of ASTC pending for payment to its employees as well as
outsiders for supply of spare-parts, etc. The liabilities of the ASTC employees is around Rs. 10000.00 lakhs on account of CPF dues, salaries for 14 months and pensionary dues of retired employees. Out of the liabilities, the liabilities against pensionary benefits and CPF liabilities of the existing employees are the statutary liabilities which amounts to Rs. 6500.00 lakhs and are to be paid or invested immediately to get the confidence of the employees working in ASTC. Until and unless the liabilities are squared-up, the confidence of the employees will not be gained. As such, it has been decided to include these liabilities amounting to Rs.6500.00 lakhs in the revival package of ASTC.

(f) For the repair and renovation of the existing bus-stations an amount of Rs. 500.00 lakhs is also required for smooth running of ASTC.

Therefore, the total revival package is estimated at Rs. 28087.00 lakhs.

IMPLEMENTATION OF THE REVIVAL PACKAGE OF RS. 28087.00 lakhs:

Out of the revival package amounting to Rs. 28087.00 lakhs, the Government of Assam has already provided the following funds to ASTC:

RESULT OF IMPLEMENTATION OF THE REVIVAL PACKAGE SO FAR:

1. It was decided to implement the VRS in three phases and the result of each phase is as follows:
 

2. A new scheme has been introduced by ASTC for allowing the private vehicles to operate under the banner of ASTC on ASTC routes. Under the Scheme, a one time registration-fee is charged from the vehicles desiring to operate under ASTC and also a share of earning of such buses every day as a commission to ASTC. Under the Scheme, ASTC is not required to invest a single paise for purchase of buses or for maintenance of the vehicles, whereas ASTC is earning a daily revenue from these buses. Upto 30th September, 2002, 950 number of buses have been registered under the Scheme. From these buses ASTC has earned an amount of Rs. 109.00 Lakhs as one-time Registration Fees which is not refundable and is also earning about Rs. 77.00 lakhs per month as commission from the operation of such buses.

3. Commercial utilization of spaces has already been started. From this account, too,
the earning of ASTC has also increased which has rose from Rs. 1.00 lakh per month to Rs. 8.00 lakhs per month.

4. After repair of 200 number of shut-down buses and purchase of 34 new buses, out of the Fund received from the State Government, the earning from its own buses has also increased considerably from Rs. 10.00 lakhs per month to Rs.30.00 lakhs per month.

At present the whole scenario of the ASTC is as follows :

1. The number of buses on road of ASTC is around 280 nos. and number of Private-operated buses under ASTC is about 1100 Nos.
2. The number of employees is 2924.
3. The salary requirement per month is Rs.140.00 lakhs (Gross).
4. The gross income of ASTC monthly is as follows :

There is shortfall of Rs.15/20 lakhs per month, i.e. shortfall at the start of the revival package was Rs.200.00 lakhs per month and it has been reduced to Rs.20.00 lakhs after the completion of the first phase of the revival plan. After 2003-04 there will be no gap.

Besides the above the Assam State Transport Corporation has decided to bifurcate its works in different segments, i.e. operation segment and mechanical segment. The Assam State Transport Corporation has a huge infrastructure in the mechanical sector but presently these mechanical infrastructures lying under utilized due to less number of ASTC's own vehicles. Therefore, it will be a sound proposition if these infrastructures can be utilized for the repair of the private vehicles also, and this will fetch a huge revenue to the ASTC.

Secondly, as mentioned earlier the private vehicles are allowed to run under the banner of ASTC on fixed routes. But it has been seen that due to lack of proper infrastructures some of the vehicles are violating the norms of operation on the allotted routes. Therefore, it is felt necessary that a computerized bus tracking system should be installed in the ASTC.
Therefore, the ASTC has felt that the help of Asian Development Bank will be required in the following sectors :

1. Consultancy for upgradation of mechanical infrastructures for effective utilization of the infrastructures for the repair of private vehicles.

2. Consultancy for the creation of separate profit centers.

3. Fund for upgradation of existing mechanical facilities.

4. Installation of computerized bus tracking system.

5. Fund for VRS of the employees who will be surplus due to computerized system of bus tracking system and upgradation of garages.

6. For investment of statutory dues of the employees amounting to Rs.6500.00 lakhs
   so that the employees of ASTC can feel confident that after their retirement they will get their retirement dues. Because at present the ASTC has not paid the retirement dues to retired employees as back as since 1994 and has not been able to pay the CPF dues to the employees who have retired after 1998. Therefore, to make the revival of Assam State Transport Corporation a success an amount of Rs.65.00 crores will be highly needed.