Transport is the essential convenience with which people not just connect but progress. Throughout history, people's progress has been sustained on the convenience, speed and safety of the modes of transport. Road transport occupies a primary place in to-day's world as it provides a reach unparalled by any other contemporary mode of transport.

The Transport Department has control over 7 State Transport Undertakings, Tamil Nadu Transport Development Finance Corporation Limited, Pallavan Transport Consultancy Services Limited, Institute of Road Transport, and the Motor Vehicles Maintenance Department.

The Transport Department is also the Nodal Agency of the State Government in respect of projects implemented by the Southern Railway, Departments of Postal and Tele-communications and the Civil Aviation of the Government of India, in the State of Tamil Nadu.

2. 1 Till 1971, State Transport operations were under the control of Tamil Nadu Government. After 1971, this was entrusted to various Transport Corporations registered under the Companies Act, 1956.

The Pattabiraman Committee in 1976 and the Thillainayagam Committee in 1990 gave various recommendations for the improvement of the State Transport Undertakings and they were implemented wherever possible.

2. 2 As on 31.3.2004, the State Transport Undertakings are offering the following services and their performance is as below:

Chennai Metro – City services          2554

Town Services (in Districts)              5633

Mofussil services                            5807

Express services

Inside State              525

Outside State           278

Ghat services           519

                            ---------

Total services         15316

Spare buses             1348

Total Fleet Strength  16664

2. Total Kilometre operated         63.90
    per day (lakh KM.)

3. Total Passengers carried       160.33
    per day (in lakhs)

4. % Fleet utilisation                 92.17%

5. Kilometre efficiency               97.82%
(excluding specials)

6. Kilometre efficiency             101.74%
   (including specials)

7. % Occupancy ratio

a) City & Town     64.23 %

b) Mofussil          84.79 %

c) Express          75.67 %

d) Ghat               97.60 %

    Overall            80.57 %

8. Breakdown per 10,000 Km 0.23

9. Accidents per 1,00,000 Km 0.32

Total accidents 7537

Fatal accidents 1269

No of persons dead 1446

10. Fuel performance (KMPL)

a) City & Town 4.27

b) Mofussil 4.65

c) Express 4.46

d) Ghat 3.51

Average 4.42

11. Engine oil per 10,000 Km             9.58 litres

12. Km run per condemned tyre         1.58 lakh Km

13. Retreading Factor                       4.06

14. Men per bus including workshop   7.02

2. 3 Amalgamation of State Transport Undertakings:

In order to reduce the administrative overhead and to avoid wasteful competition in the operation of services among the corporations, the Government have decided to amalgamate 21 Transport Corporations into 7 Transport Corporations. The Government of India notified the amalgamation of the State Transport Undertakings. The amalgamated set up is detailed below:-

3.1 Due to increase in the establishment and operational costs, the overall expenditure of the State Transport Undertakings have continuously increased. On the other hand, as there has been no fare revision, the income did not increase. As such all the State Transport Undertakings are continuously incurring loss. The accumulated loss up to March 2004 (provisional) is Rs. 2166.39 Crores. The reason for this heavy loss is due to the large gap between the income and expenditure.

In the financial year 2002-2003, the State Transport Undertakings had incurred a loss of Rs.4.21 crores. On account of frequent revision of High Speed Diesel price by Oil companies, the State Transport Undertakings are likely to incur a loss of Rs.32.13 crores (Pre-Audit) during 2003-04.

There is considerable improvement in use of High Speed Diesel Oil and lubricant and the Kilometre per Litre has improved from 4.37 (2002-03) to 4.45 (2003-04). The approximate savings on account of improvement in KMPL is around Rs.23.15 crores during 2003-04. The engine oil consumption per 10000 Kms. has come down from 11.09 litres to 9.58 litres during the current year.

3.3 Increase in Diesel cost

The Government of India periodically revise the price of the Petroleum products depending upon the varying global prices. But the bus fare is not raised periodically to commensurate with the increase in the cost of the Diesel and other petroleum products. The expenditure on consumption of diesel for the buses of State Transport Undertakings has gone up from Rs.1060.27 Crores in the year 2002-2003 to Rs.1186.20 Crores (provisional) in the year 2003-2004.

The seven Tamil Nadu State Transport Corporations have entered an agreement with the Indian Oil Corporation Limited for the supply of High Speed Diesel at concessional rate. According to the terms and conditions of this agreement, the Indian Oil Corporation Limited has agreed to extend the concession of Rs.700/- per Kilolitre with effect from 1.10.2003 to 30.9.2004. In addition to this concession, the Indian Oil Corporation Limited has also agreed to maintain and upgrade the fueling facilities at their cost with the best available technology apart from upgrading the existing facilities of shelter and platform. Similar concession will also be extended by other Oil Companies like the Bharat Petroleum Corporation Limited and the Hindustan Petroleum Corporation Limited and by way of this concession the Tamil Nadu State Transport Undertakings will save an amount of Rs.36.00 crores during the period on fuel cost.

3.5 Increase in Establishment Expenditure

Wage revisions are given to the employees of the Corporations through negotiated settlement. The average increase in emoluments for an employee in State Transport Undertakings on account of settlement effected from 01.09.1998 was Rs.835.00 per month and the total additional commitment per annum was Rs.231.00 crores. The establishment cost accounts for nearly 38% to 53% of the traffic revenue.

The establishment expenditure has been going up very steeply every year, even though there has been no appreciable increase in staff strength. The establishment cost which was at the level of Rs.388.00 Crores in the year1991-92 has gone upto Rs. 1395.45 Crores (provisional) for the year 2003-04.

The State Transport Undertakings have not been able to increase the revenue on par with the increase of expenditure on establishment, diesel and other input costs. The Government of India have revised the price of Petroleum products many times since the bus fare was last revised in December 2001 by the State Transport Undertakings. However, the fares were not revised. Hence, the gap between the revenue and expenditure has been persistent.

In order to keep up the operations, the State Transport Undertakings have to depend upon external borrowings, postpone payment to suppliers of fuel, spares etc, and commit default in payment of statutory liabilities and accident compensation. The State Transport Undertakings have fallen into a debt trap. The financial institutions are not prepared to extend any further loan to the State Transport Undertakings because of their higher loan burden.

The State Transport Undertakings have virtually landed in a financial mess with heavy outstanding liabilities towards the supply of fuel, spares and statutory dues. The position as on 31.03.2004 is given below:

Particulars	Rs. in Crores
HSD oil and Lubricant	68.02
Suppliers of spare parts, tyres etc	26.02
Accident compensation to be remitted to Courts	75.71
Statutory dues like Provident Fund, Gratuity, Recoveries from Employees	319.10
Others	3.99
TOTAL	492.84

Due to financial difficulties, the State Transport Undertakings are unable to replace the over aged buses in time and also to procure spares to keep the operation going.

Over the years, the accumulated losses of State Transport Undertakings have gone up steadily. The accumulated loss upto 31.03.2004 is Rs.2166.39 Crores. The State Transport Undertakings have an accumulated liability of Rs.492.84 Crores as on 31.03.2004 towards Diesel, Spare Parts, Statutory Liabilities and Accident Claims etc. As on 31.03.2004, a loan of Rs.844.82 Crores is outstanding to Financial Corporations. Due to their precarious financial position, most of the State Transport Undertakings are unable to pay interest and principal due. The amount defaulted in the current year upto 31.03.2004 alone is Rs. 273.64 Crores. The interest commitments to State Transport Undertakings have gone up from Rs.77.77 Crores in the year 1995-1996 to Rs.114.60 crores in the year 2003-2004.

In the Governor's address on 4.2.2004, it was announced that nearly 2500 old buses will be replaced with new buses, in two phases. It was reported by the State Transport Undertakings that 2375 buses had to be replaced immediately. Due to financial position of the State Transport Undertakings, it was proposed to purchase 1050 buses for the year 2003-2004 by availing loan from Tamil Nadu Transport Development Finance Corporation Limited. The programme will be continued as Phase-II till March, 2005 to replace the remaining 1325 buses.

500 chassis have been purchased for the year 2003-2004. The tender for purchase of 550 chassis is under process. The Metropolitan Transport Corporation Limited has introduced 147 Euro-II buses and this has helped to reduce pollution in the Chennai City. 10 low floor buses have been introduced in the Chennai City for the convenience of physically handicapped and senior citizens and children.

The Government have released a sum of Rs.30.00 crores (Rupees thirty crores only) for carrying out body repairs and mechanical repairs to the buses of State Transport Undertakings. 5316 buses were identified for major repairs, out of which repairs were completed in 4,032 buses and repairs to 80 buses are under progress. Out of Rs.30.00 crores sanctioned by the Goverment, so far Rs.25.07 crores has been utilised for repair works.

The accumulated heavy losses and the increased cost of the inputs in operation led the State Transport Undertakings to a grave financial situation, which necessitated the revision of fare. Hence, the Government with a view that the State Transport Undertakings should run self-sufficiently without any external loans, marginally increased the bus fare, with effect from 6.12.2001 that had remained static since 25.10.1999.

Presently, the fare in Tamil Nadu is the lowest when compared with the fare structure in the adjacent states. The present fare structure for Mofussil services in Tamil Nadu with comparative figures of other important neighbouring States is given below:

(In Paise per K.M.)

State	Fare Effect- ive from	Mofussil (Ordy)	Mofussil (LSS)	Mofussil Express	Deluxe	Super Deluxe
Tamil Nadu	6.12.2001	28	-	-	32	38
Andhra	4.2.2003	35	-	40	45	52
Kerala	1.10.2001	35	43	46	54	63
Karnataka	1.5.2003	28.5	-	37.25	42.50	50.75

It may be seen from the above table that the fare in Tamil Nadu is still lower than that prevailing in the neighbouring States.

The accident compensation commitment has gone up drastically from Rs.16.03 crores in the year 1991-92 to Rs.114.60 crores (provisional) in the year 2003-2004. Hence, the Government gave importance for accident prevention measures to reduce road accidents involving State Transport Undertaking buses. This Government's focus is on road safety, reduction and avoidance of accidents. As the role of the drivers is very important in avoiding accidents, regular refresher trainings, Yoga classes, safety clinics, brain storming sessions in driver training schools, safety driving award schemes, special increment to the drivers who perform duty without any accident for 10 years etc. are some of the measures introduced by the State Transport Undertakings to ensure safe driving by the drivers of State Transport Undertakings. The Institute of Road Transport selects young and energetic youths who have completed SSLC for an intensive 12 week training on driving heavy transport vehicles. They are also trained in attending to repairs in heavy vehicles, first aid etc. They are given priority for appointment in State Transport Undertakings. The Government have also ordered that a pass in SSLC / 10^th Std. instead of 8^th Std. as Minimum Educational Qualification for appointment of drivers in State Transport Undertakings. In certain State Transport Undertakings, system of 2 drivers has been introduced for driving the long distance vehicles during night journeys to reduce driver's fatigue.

During the year 1993, a woman driver was appointed for the first time at Nagercoil. In continuation two more women drivers have been appointed in Metropolitan Transport Corporation Limited, Chennai during the year 2003.