Finances in Red: the NTC is not Only Bus Company in Difficulty

Other transportation companies are they also in the red financially? Yes, says Sidharth Sharma,Chief Executive Officer (CEO) of Rose-Hill Transport (RHT) Holding Ltd. . According to him, carriers today are under pressure regarding their profit margins.

"From 1 st July 2011 to 30 June 2012, RHT suffered losses amounting to Rs 18 million, " says Sidharth Sharma. He adds that even if the company could turn things around and make a profit of Rs 5 million for the nine months ended March 31, the situation in terms of finances remains, at least, fragile.

The factors that sealed the profitability of the company: unfair competition from taxis and other brown vans on certain lines, the 6% increase in the price of diesel and 3.5% of labor costs, or the rate of absenteeism, which can reach 25% of employees. Sidharth Sharma pointed out that if the company applied the rate of wage compensation demanded by the unions, or around 40%, it would suffer, for sure, losses for this fiscal year.

Concerns shared by Swaley Ramjane, Director General of the United Bus Service (UBS). The company recorded a loss of Rs 955,000 for the three months of the year ending March 31, 2013. While in the same period last year, the profits made were Rs 2.6 million. "Our financial situation is precarious. It is likely to continue because there is no improvement in the light of the environment in which we operate, " laments Swaley Ramjane.

This emphasizes that the quantum of the subsidy provided by the   National Transport Authority to bus companies has not increased since 2005, after the government's decision to free transport for students and seniors. So in the meantime, the number of students and seniors traveling on buses has increased significantly, he adds.

Another problem noted the price of spare parts imported from abroad has increased by 50%."But if we must now increase the salaries of employees of bus companies in accordance with recommendations of the National Remuneration Board, we n 'have no choice but to increase the price of the ticket " , argues the director of UBS.