ISLAMABAD - The metro bus operation in Islamabad has become a white elephant for the Capital Development Authority, which is forced to pump about Rs220 million per month to sustain its loss-making transport system in lieu of the federal government.
Subsidies to run urban transport systems is a common phenomena in several countries as their governments facilitate citizens by bridging the gap between expenses and income on such public facilities, however, offering this kind of subsidies by any development agency is rare in the world.
At present, CDA is running three metro routes named orange, blue and green line in addition to electric buses across the city as feeder routes but collectively the system is running on a loss of almost fifty percent. About 40,000 passengers use all three metro bus services on daily basis and about Rs60 million are being collected monthly as CDA is charging Rs50 flat fare from each passenger.
However, in return CDA is spending about Rs124.2 million on the metro operations including Rs88 million to M/s Faisal Movers for bus operations, Rs12.4 million to M/s Rawalpindi Waste Management Company for janitorial services, Rs9.8 million to M/s MS for security services and Rs14 million to M/s Tap Enjoyer for ticketing system — leaving the transport system in more than fifty percent loss.
Meanwhile, sources informed that CDA will have to pay Rs4 to Rs4.2 billion annually to NRTC, which is running the operations of electric buses in Islamabad, however, sources close to the developments informed that the buses are expected to fetch only Rs2 billion annually, which means these are also being operated on a loss of more than fifty percent.
A senior officer of the civic authority on the condition of anonymity has explained that the bus operations are not directly under our domain as we are a development agency not the government but as usual the federal government puts its burden on CDA’s shoulders.
Meanwhile, the senior officers of the finance wing are of the view that as the civic authority is already facing financial scarcity and running its affairs by selling its land bank, it could not sustain such a huge financial burden on a permanent basis.
They are of the view that the federal government should allow CDA to increase the fare or give subsidy from its own kitty as the civic authority’s resources are not enough to fuel the project for an indefinite period of time.
They argue that other than the capital, no development agency i.e. Lahore Development Authority, Peshawar Development Authority etc. in the rest of the country are giving subsidies to run metro service but respective provincial governments are sustaining such burdens.
When contacted, Director Public Relations CDA Shahid Kiani responded that all public transport services in the developed democracies are being subsidized by the government.
He confirmed that in CDA’s case revenue collected is approx 50 percent of the expenditure. He said the federal government has directed CDA to cap this gap.
He, however, said that CDA is exploring various non-fare revenue streams such as advertisement on buses and bus routes, parking fee, congestion and other charges etc. to make it self-sustainable.