LAHORE: Most of the buses meant to be serving this city’s growing demand for public transport are sitting idle in workshops and depots. Transporters say the buses are too expensive to run, especially in the absence of a subsidy promised by the government; the Lahore Transport Company (LTC) says it won’t subsidise buses that aren’t running.
Currently, a total of 165 buses serve customers on 53 routes in Lahore. When the LTC was formed in 2009, the number of buses was around 750. The transporters say the buses are not profitable because they have not been getting a promised operational subsidy from the LTC since 2007.
In 1999, the Punjab government instructed banks to provide loans to transporters so they could import buses. An official at the National Investment Bank, previously the Pakistan Industrial Credit and Investment Corporation (PICIC) bank, said that though the agreement had matured in 1999, many transporters took loans after 2000.
He said the banks gave 90 per cent of the loan to transporters to be repaid in instalments in 5 to 8 years. He said that almost 90 percent of the transporters had not been able to repay the loan and now faced legal action from the banks.
The official said that now a new policy on fresh loans had been announced under which the transporters had to come up with 25 per cent of the total loan. The government would provide 25 per cent of the loan as an upfront subsidy. He said that transporters were not showing an interest in this scheme as most of them were already defaulters.
A transporter told The Express Tribune that he had borrowed Rs120 million to buy buses and had returned over Rs50 million, but he still owed another Rs120 million. He said he had made a deal with the bank last year whereby he would be free of the debt if he paid Rs65 million by June 2010.
“I was hopeful that the LTC would provide me with the subsidy amount but they didn’t and eventually the bank filed a suit against me claiming Rs120 million. The government is not giving us any subsidy nor compensating us for the losses we suffered,” he said.
Transporter Arshad Khan Niazi said his buses had been left unused at a company depot since January 1. He said that low fares, high diesel prices and competition from unregulated motorcycle and CNG rickshaws on his routes had forced him to “dump” a fleet of 52 CNG buses of a 2005 model. He said he owed pump owners Rs5 million for diesel.
He said that no subsidy had been provided to transporters since 2007 and that was why they had defaulted. “The Punjab government is promoting international transport companies rather than local transporters,” Niazi said. “If the LTC offers us the facilities it is offering the Turks we will be more than happy to resume our services,” he said.
Niazi accused the LTC of further bias. He alleged that the company had deliberately rerouted motorcycle and CNG rickshaws from Ferozepur Road to areas where his buses operated. “Their actions destroyed my business,” he said. “If the LTC can remove all the vans, motorcycles and CNG rickshaws from Ferozepur Road and Multan Road for Turkish companies, why not for us?” Maqsoodul Haq, general manager of the First Bus Service, told The Express Tribune that his company was now operating 135 buses on six routes. He said that they had an agreement with the LTC for a fleet of 300 buses to be operative by December 2011. He said that the company could get a fresh loan since it had cleared payments for the buses bought previously.
“We are in loss and the LTC is giving us lollypops about subsidies but we are hopeful we can get at least some in the near future. The LTC has promised to clear our routes of motorcycle rickshaws and if they keep their promise we might start earning some profit,” Haq said. He added that the company could not stop operations because 1,200 families depended on it for their livelihoods.
LTC chairman Khawaja Ahmad Hassaan said that the company would pay subsidies only on buses which were operational. “Why should we pay subsidies for buses which are standing at workshops or are pledged to the banks? If the bus is not operational, we will not give any subsidy,” he said.
Asked about the outstanding loans of the transporters, Hassaan said that the previous government had made arrangements with the transporters and that was “not our responsibility”.
He said that inviting international companies to Lahore would create competition among transporters. He said that the public transport situation in Lahore would soon improve. He said that 10 First Bus Service buses were already operational while the LTC had agreed a deal with Pak Global under which the latter would run 100 buses by June this year. He did not say when the Turkish companies would start operations.
Published in The Express Tribune, February 18th, 2011.