Can Kerala State Road Transport Corporation Be Saved?

The Kerala State Road Transport Corporation (KSRTC) is in an unenviable situation – saddled by debt, staring at losses and facing a nation-high bus-to-employee ratio of 7.2 and a fuel-efficiency standard that would make a McLaren gush.

In a recent op-ed in the Mathrubhumi, a former Chairman of the Tamil Nadu Transport Corporation and Principal Secretary in the Transport Ministry, P C Cyriac, argued for the KSRTC to be restructured on the basis of the model employed for the Cochin International Airport Limited (CIAL), the moderately successful public-private partnership (PPP) model adopted for the Cochin Airport.

While he rightly identified the issues that drag the KSRTC down (bus-to-employee ratio, fuel efficiency and so on), his suggestions –  especially on adopting the PPP model of CIAL – are impractical. Cyriac instead suggests getting private investors on board as minority stakeholders. However, no investor would deem investing in a company that posted losses of more than Rs 600 crore last year a welcome proposition. Would you, as an investor, put your hard-earned money in a corporation whose administration is is such that two years ago, 3,000 employees received double their salary and 3,000 received none at all in a mix-up? The KSRTC has still not computerised its operations or devised a time-management system. Would you invest any money in such a company?

Cyriac, however, does rightly point out the lack of professional expertise inside the corporation. But his suggestion of appointing “qualified IAS officers” might not be the best advice; qualified management professionals should be preferred over paper-pushing bureaucrats.

Even aside from the question of investor reception, the suggestion of a PPP model would invite contempt and vigorous opposition from the left-wing intellectuals that populate Kerala. Whether the government will expend such political capital is doubtful, considering it already lacks the political will to push through the current set of suggestions.

The Susheel Khanna report, which has the standard set of recommendations for a public transport corporation, recommends the trilateral splitting of the corporation into North, Central and South divisions based out of Kozhikode, Ernakulam and Thiruvananthapuram along the lines of the Tamil Nadu Road Transport Corporation. While this and other suggestions, such as induction of new buses and cutting of unprofitable routes, are practical, the most essential requirement – reducing employees in the corporation and restructuring to improve efficiency and reduce the financial liability of the corporation – are impractical due to political considerations.

The trade unions   Centre of Indian Trade Unions (CITU) and Indian National Trade Union Congress will be in opposition to any sort of restructuring. And considering the political links that exist between the CITU and the ruling Communist Party of India (Marxist), the government will not want to displease its allied organisation, especially with CPI (M) coming out in direct opposition to the elder partner. There’s also the continuing blowback that the party is facing from Gita Gopinath’s appointment as economic adviser to the Chief Minister, which has been suggested by some as an indicator that Pinarayi Vijayan will pursue the much -despised “neo-liberal” policies. There has been no indication, though, that he supports any notion of a free market or “neo-liberal” policies.

This issue, along with the political fracas that has erupted over the suicide of an engineering student, Jishnu, and the subsequent divergence in positions within the ruling Left Democratic Front, means that a political consensus will be hard to come by.

Will the state government splurge on political capital to tidy up the KSRTC? Indications are that it will not.

Professor Susheel Khanna had to deny media reports which said that he recommended the dismissal of employees and reducing the number of buses, which, after a cursory look at the statistics and the state of the corporation, any sensible person would recommend.

Furthermore, even the employees of the corporation seem to be acting directly against their interests – 200 employees are owners in competing private bus services according to a report. Just imagine if even one of these erring employees was a well-connected trade unionist. If action is taken against him, he will most probably escape any disciplinary action, and the fool that dared take action against him would likely be harassed or even suspended.

To save the KSRTC, the CPI (M) will have to break its nexus with the CITU and act in the best interest of the corporation. But that might be a step too far for the government to take. If it wants the corporation to survive and retain it as a public sector unit, it will have to cut the trade unions to size and professionalise and restructure the company.

The allocation of Rs 3,000 crore may fund the much-needed infrastructure to revamp it, but such an investment of public money also demands that the government commit to acting in the best interest of the people.