Indore, the largest metropolitan city of the state of Madhya Pradesh, is fast emerging as a centre of trade and commerce. In the context of rapid growth of the city, increasing mobility, high travel demand, increasing intensity of traffic, congestion, delays, accidents and other such problems, public mass transport system of the city stands out as the most critical issue. The intra-city public transport system is essentially road based with 500 private minibuses , 550 tempos and 10000 auto rickshaws. Since there was no specialized and effective regulatory agency to monitor the system a special purpose vehicle in the form of public limited company “ Indore City Transport Services Ltd.” was set up to operate and manage the public transport system in Indore with private sector participation to overcome financial constraints.

The aforesaid company has identified and took permission for 18 high travel demand routes from RTA and has already started operation of its 37 ultra-modern low floor buses. These city buses with 2 broad doors are allowing passengers to board and alight quickly and easily, save time and fuel, and give better run-times and improved economy to the bus operators. Real time vehicle tracking and fully computerized ticket vending system are some other highlights. O&M and other regulatory measures are being exercised by the company.

The main sources of revenue for the system are the fare box collection, advertising, passes revenue and bidding amount by private participants. The optimum fare structure has been decided to meet twin objective of Equity access to poor and incentive for upper middle class to prefer these buses over their own vehicles. The fares have been kept reasonable to give healthy competition to existing minibuses and tempos, low enough to secure fullest utilization and high enough to ensure viability of the system within the government norms. System of monthly, weekly, employee and student passes will ensure the fullest utilisation of the new system.

Financial evaluation of the project was carried out with the objective of determining its financial viability and assessing its potential for implementation on a commercial format. At this stage, projected financial analysis estimates the likely returns to the operators, company and people at large.