A Study on Operating Cost at BMTC

CHAPTER-1
INTRODUCTION
HISTORY:-
Humans' first means of transport were walking and swimming. The
domestication of animals introduces a new way to lay the burden of transport
on more powerful creatures, allowing heavier loads to be hauled, or humans to
ride the animals for higher speed and duration. Inventions such as the wheel
and sled helped make animal transport, including rowed and sailed vessels,
dates back to time immemorial, and were the only efficient way to transport
large quantities or over large distances prior to the Industrial Revolution.

The first forms of road transport were horses, oxen or even humans carrying
goods over dirt tracks that often followed game trails. Paved roads were built
by many early civilizations, including Mesopotamia and the Indus Valley
Civilization. The Persian and Roman empires built stone-paved roads to allow
armies to travel quickly. Deep roadbeds of crushed stone underneath ensured
that the roads kept dry. The medieval Caliphate later built tar-paved roads. The
first watercraft was canoes cut out from tree trunks. Early water transport was
accomplished with ships that were either rowed or used the wind for propulsion,
or a combination of the two. The importance of water has led to most cities that
grew up as sites for trading, being located on rivers or at sea, often at the
intersection of two bodies of water. Until the Industrial Revolution, transport
remained slow and costly, and production and consumption were located as
close to each other as feasible.

Transport or Transportation is the movement of people, animals and goods

from one location to another. Modes of transport include air, rail, road, water,
cable, pipeline and space. The field can be divided into infrastructure, vehicles
and operations. Transport is important because it enables trade between persons,
which is essential for the development of civilizations.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 1

A Study on Operating Cost at BMTC

MODES OF TRANSPORT
1. Human-powered
2. Animal-powered
3. Air
4. Rail
5. Road
6. Water
7. Other mode
Some sort of accounting was in existence even in ancient times. In fact,
accounting is as old as money itself. The existence or use of accounting can be
traced as far back as the ancient civilizations of Sumerian, Egypt and Babylonia.
Even in India, the use of accounting could be traced to ancient times. In the
book 'Arthashastra', written by kautilya, the minister of Chandra Gupta Maurya
around 4th century B.C., there was a separate chapter on "the business of
keeping up accounts in the office of accounts".

Although the beginning of accounting could be traced to the period as early

as in 443 B.C., The real development of accounting i.e., the modern system of
accounting based on double entry principles took place on the year emergence
of the modern system accounting system accounting after 1450. The first
publication of modern system accounting after 1450.The first publication of
modern accounting system. Viz., the double-entry system came out in Venice
in 1494. Lucas Pacioli, and Italian monk, wrote a book called "Summa de
arithmetical geometric proportionate proportionality" or popularly called
"Summa" in Italian language. This book was primarily a book on mathematics.
But it included a brief section on double-entry book-book on mathematics. But
it included a brief section on double-entry book keeping principles called "de
computes scriptures". Luca de bargo pacioli came to be regarded as the founder
or father or father of the modern double-entry system of book-keeping.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 2

A Study on Operating Cost at BMTC

MEANING OF COST
It is the sum of the total of all the expenditure in producing and selling a
product."

The American Accounting Association as "the foregoing, in monetary terms,

incurred or potentially to be incurrent in the realization of the objective of
management which may be manufacturing of a product or rendering of a
service."

The institute of cost and works accountants, London defines cost as "the
amount of expenditure (actual or notional) incurred on or attributable to a given
thing." Thus, cost refers to something that must be sacrificed to obtain a
particular thing.
MEANING OF COSTING
Costing is the technique and process of ascertaining costs. It consists of the
principles and rules, which are used for ascertaining the costs of products and
services.

MEANING OF COST ACCOUNTING

Cost accounting refers to the process of determining and accumulating the cost
of some particular product or activity. It also covers classification, analysis and
interpretation of cost. It is defined as the process of accounting for cost where
expenses are incurred to the establishment of its relationship with cost centres
and cost units.
The costing terminology of I.C.M.A, London defines cost accounting as "the
process of Accounting for cost from the point at which expenditure is incurred
or committed to the establishment of its ultimate relationship with cost centres
and cost units. In its widest usage, it embraces the preparation of statistical data,
the application of cost control methods and the ascertainment of the profitability
of activities carried out or planned."

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 3

A Study on Operating Cost at BMTC

COST CENTER
Cost Centre is the smallest segment of activity or area of responsibility for
which costs are accumulated. It is defined as a place, location, machine a person
or a thing for which cot can be ascertained. Example, sales department,
production marketing

PROFIT CENTER
A profit centre is that segment of activity of a business, which is responsible for
both revenue and expenses and discloses the profit of a particular segment of
activity.

INSTALLING A COSTING SYSTEM

A formal system of cost accounting is essential for ascertaining and controlling
costs. But one has to reckon with the fact that the requirements of no two firms
are alike and the system must be designed to meet the individual needs of each.
The following are, however, some of the keynotes or essentials of a good costing
system:
 Simplicity and adaptability: The designed costing system must
be simple and practical. A simple record and clear form of
control is the foremost ingredient. Introduction of petty and
unnecessary details make the system difficult and this should be
avoided.
 Accurate and Speedy statistics: It is again important that the
system provide prompt and accurate costs relating to operations,
processes and jobs in all their constituent elements. in this fast
hanging business world, cost data get obsolete very soon, and
obsolete data may misguide rather than guide the management.
 Admit comparison: The costing system must admit of easy
comparison with predetermined estimates and with costs of
similar jobs previously performed. It is comparison, which points
up the areas of strength and weakness.
 Standardization: In a good costing system, there should be a
proper standardization of all cost records and forms and
uniformity in size of all cost statistics and form and uniformity
in size of all cost statistics and forms as far as possible.
Standardization is of great help in historical and cross-sectional
comparison.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 4

A Study on Operating Cost at BMTC

 Co-operation: There should be a close co-ordination and inter-

locking of all productive and non-productive activities of the
business. There is need of a sound system of internal check as
well so that the information being supplied could be checked and
cross checked

 Economical: After all there is a cost of installing and operating

a costing system. Therefore the cost accountant has the ensure
that the cost of costing does not exceed its value to management.
Although there could be no definitive rules about the amount
spent on the costing department, the question that must always
be kept in mind in mind is as to what purpose is the information
required. Costs are a means to an end and never an end in
themselves.

Apart from these considerations, a cost accountant while designing a costing

system for a particular enterprise should get thoroughly acquainted with the
following

 The requirements of the management

 The layout of the factory

 The stages through which a product must pass before it is complete and
control Exercised over production

 The methods of storing raw materials.

 The methods of remunerating labour, whether by day or piece work or

by a combination of the two

 The personalities of the key personnel and the capacity of the office
staff.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 5

A Study on Operating Cost at BMTC

CLASSIFICATION OF COSTS
Costs incurred on a particular product can be classified on different types on
their nature or on some other basis. Some of the cost classification are discussed
below.

Classification on basis of financial nature of costs

 Financial costs (consists of cash and non-cash costs)
 Non-financial costs.

Classification on the basis of elements

 Direct costs/traceable costs: Direct costs are costs those which can be
identified easily with a unit of operation or costing unit or cost center.

 Indirect costs/common costs: Indirect costs are costs which cannot be

allocated but which can be apportioned to cost centres or cost units.

Functional classification of costs

 Production costs
 Administration costs
 Selling and distribution costs
 Research and development cost
Classification based on cost behaviour
 Fixed costs: Fixed cost is a cost which tends to remain constant in the
long run, or over period of time/

 Variable costs: Variable costs are cost which tends to vary in

accordance to level of out put

 Semi-variable costs: They are neither perfectly variable nor completely

fixed in relation to changes in volume.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 6

A Study on Operating Cost at BMTC

ELEMENTS OF COSTS
In the previous heading we learnt about classification of costs, further we have
to know what the cost consists exactly. Hence it is essential to know about costs
elements. The total cost is further divided into several parts to make it clear the
concept of cost. Cost of production/manufacture consists of various expenses
incurred on production of goods or services. These various expenses are called
as elements of total cost of production.
And these can be divided into 3groups are
 Material
 labour/wages
 Expenses
SYSTEM OF COSTING
Process of cost ascertainment is a systematic and planned process. Cost data
should be arranged and processed on a coordination manner according to known
systems.
 Historical costing:
Historical costing is system of costing under which costs are determined after
they have been incurred

 Standard costing:
Under standard costings, standard costs are determined and used, and then
compared with the actual costs to determine the extent of variances so that
remedial action can be taken. Standard costs are the pre-determined costs of
conformity with the most efficient operation and use of resources within the
firm.
METHODS OF COSTING
Costing methods refer to the process of collecting, arranging, processing and
presenting costs. The choice of a method of costing depends upon the nature of
product, service and industry.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 7

A Study on Operating Cost at BMTC

METHODS
According to C.I.M.A. Terminology there are basically two methods of costing:
 Specific order costing (or job or terminal costing), and
 Operating costing (or process or period costing).

 Specific order costing: It includes batch costing, contract costing, and

multiple costing. Costing methods are applied to separate jobs, batches,
and contracts authorized by specific order. Each job, contract, etc., from
the other and hence needs to be cost separately

 Operational costing: It consists of costing methods applicable to

standardized goods and services involving repetitive and continuous
operations or processes. Process costing and operating costing are the
examples of operational costing

OTHER COSTING METHODS

 Job costing:
Under job costing costs are collected and accumulated fo each job, project or
work order separately. Each job is a separate cost unit. Each job is distinct; it is
different from the order, and therefor e, is to be separately casted, job costing is
applicable to printing woke, machine repair, engineering works.
 Contract costing: in this method each contract is a cost unit and
an account are open for each 'Contract in the books of the
contractor to ascertain profits and losses. Contracts are generally
on large size taking more than one year to complete.

 Batch costing:
A batch represents a group of similar products or a number of small orders
processed or manufactured together as a single group each batch is produced
according to specific instructions and is to be cost separately sometimes a large
number of identical units are produced as one batch. Batch costing is applicable
to confectionery, production of machine parts etc.,

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 8

A Study on Operating Cost at BMTC

 Process costing:
This method of costing is suitable for industries where manufacturing is carried
on by distinct and well-defined process. For example, in textile industry the
three distinct processes are spinning, weaving and printing. Output of one
process becomes input for the next process, e.g., output of spinning process is
spurn yarn, which is input of weaving, process and go on. This method is also
called average costing. As the products are manufactured continuously, it is
called as continuous costing. It is suitable for textiles, chemicals.
 Composite or multiple costing:
This costing is used in those industries where the nature of the product is
complex, such as motorcars etc. In such cases costs are accumulated for
different component making the final product and then totalled to ascertain the
total cost of the product.
 Operation costing
This costing methods aims as ascertaining the costs of each operation in place
process. In this method the assumption is that output is achieved through a
number of different operations.
 Service costing
The method of operating costing is used for undertakings rendering service
departments of an undertaking. Examples of such services are passenger and
freight transport, etc. An appropriate cost unit is to be selected to suit the nature
of service. Operating costing is also called service costing.

ADVANTAGES OF COSTING:
 It helps to cost control

 It helps to future production policies

 It discloses profitable and unprofitable activities. The activity with less

or no profitability can be eliminated by the management

 Economical purchasing is helped by an efficient cost accounting system.

 Estimates and tenders can be prepared prices may be adjusted according

to the market condition.

 It discloses losses or inefficiency occurring in any form such as idle

time, scrap etc.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 9

A Study on Operating Cost at BMTC

 It discloses the exact cause for an increase or decrease in the profits

 Profits and loss account or inefficiency occurring in any form such as

idle time, scrap etc.

 It discloses the exact cause for an increase or decrease in the profits.

 Profit and loss account and Balance Sheet can be prepared without any
stock taking.

 It provides an independent and reliable check on the accuracy of

financial accounts.

 Cost accounting supplements the efforts of the engineering department

by setting up physical standard and helps in ascertaining normal and
abnormal losses and gain

 Cost accounting enables an effective appraisal of different sections in

the organizations.

 Through standard costing and budgetary control, it is possible to control

the expenditure

 The different cost concept that is sunk cost, opportunity cost, marginal
costs etc. Help in decision making.

 Cost accounting provides useful information to the investors in their

opinion formation about the organization.

 The consumers can also beneficiaries

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 10

A Study on Operating Cost at BMTC

OBJECTIVES OF COST ACCOUNTING

The main objectives of cost accounting can be summarized as follows: -
1. Determining selling price
Business enterprises are run on a profit-making basis. It is thus necessary that
the revenue should be greater than the costs incurred in producing goods and
services from which the revenue is to be derived. Cost Accounting provides
information regarding the cost to make and sell such products or services. Of
course, many other factors, such as the condition of the market, the area of
distribution, the quantity which can be supplied etc., are also be given due
consideration by the management before deciding upon the price but the cost
plays a dominating role.

2. Determining and controlling efficiency

Cost accounting involves a study of the various operations used in
manufacturing a product or providing service. The study facilitates measuring
of the efficiency of the organization as a whole or departmentally as well as
devising means of increasing the efficiency cost accounting also uses a number
of methods, eg, budgetary control, standard costing etc., for controlling cost.
Each item of cost (materials labour and expenses) is budgeted at the beginning
of the period and actual expenses incurred are compared with the budget. This
greatly increases the operating efficiency of the enterprise.

3. Facilitating preparation of financial and other statements

The third objective of cost accounting is to produce statements of such short
intervals as the management may require. The financial statements, prepared
under financial accounting generally once a year or half-year, are spaced too far
apart in time to meet the needs of the management. In order to operate the
business at a high level of efficiency, it is essential for the management to have
a frequent review of production, sales and operating results. Cost accounting
provides daily, weekly or monthly volumes of units produced, accumulated
costs together with appropriate analysis. A developed cost accounting system
provides immediate information regarding stock of raw materials, work-in-
progress and finished goods. This helps in speedy preparation of financial
statements.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 11

A Study on Operating Cost at BMTC

4. Providing basis for operating policy

Cost accounting helps the management in formulating operating policies. These
policies may relate to any of the following matters:
Determination of cost volume, profit relationship.

Shutting down or operating at a loss.

Making or buying or operating at a loss.

Continuing with the existing plant and machinery or replacing them by

improved and economic ones.

OPERATING COSTING
Cost Accounting has been traditionally associated with manufacturing
companies. However in the modern competitive market, cost accounting has
been increasingly applied in service industries like electricity generating
companies banks, insurance companies, transportations organizations,
hospitals, passenger transport and railways, hotels, road maintenance,
educational institutions, road lighting, canteens, port trusts and several other
service organizations. The costing method applied in these industries is known
as "Operating Costing'

According to the Institute of Cost and management Accountants (ICMA UK)

operating costing is, that form of operating costing which applies where
standardized services are provided either by an undertaking or by a service cost
center within an undertaking'. The method of computation of cost in various
service providing organizations is explained in this chapter in subsequent
paragraphs.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 12

A Study on Operating Cost at BMTC

MEANING OF OPERATING COSTING

Operating costing is also known as service costing is used for establishing cost
of services rendered or services are offered for sale and no items are produced.
Service costing is use in service organization like power generation, hotel
hospitals, transportation companies, colleges etc.,

DEFINITIONS OF OPERATING COSTING

CIMA defines that service costing cost accounting for services or functions
(e.g., canteens, maintenance ,personnel). These may be referred to as service
centers, departments or functions Because of the varied nature of activities
carried out by the service undertaking the cost system used is obviously
different from that followed in manufacturing concerns.

Operating costing is a method of costing applied by undertakings which

provide service rather than production of commodities. Like unit costing and
process costing, operating costing is thus a form of operation costing. The
emphasis under operating costing is on the ascertainment of cost of rendering
services rather than on the cost of manufacturing a product. It is applied by
transport companies, gas and water works, electricity supply companies,
canteens, hospitals theatres, school etc. Within an organization itself certain
departments too are known as service departments. For example: maintenance
department, power house; boiler house; canteen; hospital; internal transport.

Operating costing offers better scope of control. It facilitates the computation of

unit operation cost at the end of each operation by dividing the total operation
cost by total input units. It is the category of the basic costing method,
applicable, where standardized goods or services result from a sequence of
repetitive and more or less continuous operations, or processes to which costs
are charged before being averaged over the units produced during the period.
The two costing methods included under the head are process costing and
service costing

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 13

A Study on Operating Cost at BMTC

The essential features of operating costs are as follows

1. The operating costs can be classified under three categories. For example in
the case of transport undertaking these three categories are as follows:
 Operating and running charges: It includes expenses of variable
nature. For example expenses on petrol, diesel, lubricating oil, and
grease etc,

 Maintenance charges: These expenses are of semi-variable nature and

include the cost of tyres and tubes, repairs and maintenance, spares and
accessories, overhaul etc.,

 Fixed or standing charges: These includes garage rent, insurance road

license, depreciation, interest on capital, salary of operating manager
etc.

2. The cost unit used is a double unit like passenger mile; Kilowatt-hour, etc. It
can be implemented in all firms of transport, airlines, bus-service etc and by all
firms of Distribution Undertakings.

COST UNIT:
For ascertaining cost, it is necessary to decide suitable cost unit for each type of
service industry. Basically, operating costing is a types of process costing. Thus
it used the method of process costing when ascertaining the cost of supply of
electricity. Steam etc. However, sometime operating costing may adopt a
particular job as a unit of cost as for example when costing a particular trip by
a bus so as to quote the charger. In such cases operating costing under operating
costing may be of two types (a) simple cost unit (b) costing cost unit.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 14

A Study on Operating Cost at BMTC

Following is the list of different cost unit used in different types of service.
Table 1.1: The operating cost units in different service organizations
Nature of business Cost unit

Electricity Kilowatt-hours

Hospitality Patient day

Goods transport Tone-kilometer

Passenger transport Passenger kilometer

Hotel Room day

Canteen Meals served, cups of tea sold

Educational institution Full time student

Water supply Per 1,000 gallons

Boiler house Kilogram of steam supplied

Road maintenance Kilometer of road maintained

Collection of cost data: After determining the unit of cost to which the total
expenditure is to be allocated, the cost relating to the rendered is collected

Thus it can be seen that in operating costing in most cases the cost unit is a
compound unit. It refers to both the quantum of service and period of service.
Thus a transport charge for carrying so much weight (Ton) for so much distance
(km) an electricity company charge one for use of both quantum (kilowatt) and
the period (Hour) and so on.

SERVICE COSTING ANALYSIS

The service costs are usually collected under the following headings
 Standard Charge or Fixed Charge

 Running Expense or Variable Cost

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 15

A Study on Operating Cost at BMTC

APPLICATION OF OPERATING COSTING

1. Transport service: Under this method of costing, the operating cost of each
vehicle is determined. The common unit of service is tonne kilometre in case of
goods transport, and passenger kilometer in case of passenger transport.
Examples of transport service are Truck operators, road transport, Railways,
Airlines etc,

2. Supply service: It includes services like electricity, steam gas, water etc.,
where steam is used for the purpose of generating electricity, it is possible to
compute the cost of electricity generated by aggregating the steam production
costs with other related cost of electricity generation. A cost unit is generally in
terms of kilograms.

3. Welfare Services: It includes services like canteen, hospital, library, etc.,

Hotels, restaurants employ operating costing. The total operation of a hotel can
be divided into number of cost centers like Restaurant, Housekeeping, Laundry,
etc. The cost is generally in terms of per meal/dish.

CHARACTERISTICS OF OPERATING COSTING

The industries which adopt this method of costing do not produce any tangible
goods.
Instead of they are concerned with rendering the services to public at large.
 The cost unit used by such undertaking is known as composite unit as
compared to the used of simple cost unit by rest of undertakings.

 It involves many stages and process in converting basic material to the

ultimate service.

 Costs are usually computed period wise

 The demand for the service of industries adopting this method of costing
fluctuates.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 16

A Study on Operating Cost at BMTC

 There are no difficulties faced in respect of valuation of work in progress

or closing stock when compare to other industries.

 Only medium and large sized undertakings deal in manufacturing and

rendering services.
APPLICABLITY OF OPERATING COST
The operating costing is adopted or used by undertakings which do not produce
any goods but rendering service to be cost could either be:

 Supply services
 Electricity
 Water supply
 Gas Supply
 Transport Service
 Railways
 Airways
 Bus Transportation
 Health and Welfare Service
 Hospitals
 Canteen
 Libraries
 Municipal and Village Panchayat Services
 Street Lighting
 Road Maintenance Etc.,

OBJECTIVES OF OPERATING COSTING

Objectives of operating costing they are as follows

 To provide an accurate basis for quotation and fixing of rates

 To provide cost comparison between the alternatives
 To decide at what price the used buses can be charged
 To compare the cost of maintaining of the group of buses with another
group
 To determine what should be charged against department using the
service
 To ensure that cost of maintenance and repair is not excessive
 To ensure that all operation have been carried out in proper time,
resource consumed is not excessive and plants are properly maintained.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 17

A Study on Operating Cost at BMTC

Operating costing or service costing is to similar to output costing. All costs are
suitable classified under fixed and variable is important as it draws management
attention to the fixed cost to which they are committed regardless of the units
off services ultimately given.

PROCEDURE FOR OPERATING COSTING

1) DETERMINE COST UNIT: The first in operating costing is the

determination of the cost unit. This is a complex task.

2) ASCERTAIN COST: The next point to be noted is that operating cost are
period cost. The cost of supplying the service for a period are ascertained in the
following manner (taking the example of transport)

3) VEHICLE NO: Each vehicle is treated as a cost center given a specific

number. All the cost account against this number. A separate account is opened
to record the cost and income of each vehicle

4) VARIABLE COST : Variable cost are the running and operating. This
included expenses of variable nature eg., petrol diesel, lubricating oil greases
etc., the material requisition note and time sheet or log bears the vehicle no the
relevant vehicle account is debited with it direct material and direct labor cost.
Direct expenses such as a fuel are debited to vehicle account on the basis of log
book and the cash/purchase of journal vouchers.

5) FIXED COSTS: Fixed Cost (fixed charge) included garages rent, insurance,
road license fees etc., the fixed charges are apportioned and absorbed by each
vehicle no on the basic of over head absorption rate may be actual or pre
determined. The fixed cost attributable to the vehicle is debited to the relevant
vehicle account.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 18

A Study on Operating Cost at BMTC

6) REVENUE: The revenue from the vehicle is credited to the vehicle account.

7) PROFIT OR LOSS: The vehicle account at this stage will reveal the profit
or loss made on operating that vehicle. The profit or loss is the transfer to the
costing profit and loss account the total operating cost of a period is divided by
the number of cost unit (km/Passenger/ton) supplied during the period to arrive
at the operating per unit for that period.

8) NO STOCK: In case of a service industry there is no question of any closing

stock or work-in-progress since it is not possible to store a service for future use

9) ABNORMAL COST: According to cost accounting standard s

(transportation cost) and non recurring cost shall be directly debited to profit
and loss a/c and shall not form part of operating cost. Example are penalty,
detention charge demurrage and cost related to abnormal break down.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 19

A Study on Operating Cost at BMTC

ADVANTAGES OF OPERATING COST

1. Investing more for employees will show them they are valued in return they
will be more engaged in company and do more (better) work job.

2. Cut office supply expenses, reducing supply expenses can significantly

reduce company's operating expenses& improve company's bottom line.

3. Cut out travel and entertainment expenses

4. Reduce business marketing and advertising expenses

5. Outsource administrative functions such as company's payroll and accounting

to help reduce company's business expenses

DISADVANTAGES OF OPERATING COST

1. Start up business are more costly and expensive and risky since there is no
proven formula
2. In order to obtain capital to fund the business, a detailed lengthy business
plan must put to together

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 20

A Study on Operating Cost at BMTC

TRANSPORT COSTING

Transport operating costs refer to costs that vary with vehicle usage, including
fuel, tires, maintenance, repairs and mileage-dependent depreciation costs.
Projects that alter vehicle miles travelled , traffic speed and delay, roadway
surfaces, or road way geometry may affect travellers vehicle operating costs,
which should be considered in a benefit-cost analysis

Vehicle ownership costs refer to fixed costs that are not directly affected
by vehicle mileage, including time-dependent depreciation, insurance and
registration fees, financing and residential parking.

Projects that change per capita vehicle ownership rates, such as significant
changes in the quality of alternative modes and land use accessibility, may affect
vehicle ownership costs, which should be considered in benefit-cost analysis.
 Estimate changes in total vehicle miles travelled along a corridor

 Estimate changes in vehicle travel speeds and delay due to road and
traffic
conditions
 Estimate fuel consumption rates, fuel prices, and non-fuel-related
operating
costs
 Calculate total changes in vehicle operating costs

 For improvements to ride quality, such as possible repairs and curve or

grade reductions estimate effects on vehicle wear

 Estimate changes in per capita vehicle ownership in an area

 Estimate average vehicle ownership costs

 Calculate total changes in vehicle ownership costs.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 21

 A Study on Operating Cost at BMTC

TRANSPORT COST SHEET FOR MONTH/YEAR

STEP COSTS Rs. Rs.

A FIXED COST

Insurance ……….. xx

License fee, permit fee and taxes ………... xx

Depreciation …………. xx XX

Other fixed costs (specify) ………….. xx

B VARIABLE COST

Salaries and wages of drivers, cleaners & other

Operating staff …………… xx

Fuel and Lubricants ………….. xx

Consumables …………… xx

Amortization cost of Tyre, Tube & Battery xx

Laundry …………… xx XX

C. Spares …………... xx XX

D. Repairs & maintainable …………… xx XX

E. Other variable cost (specify) ………….. xx XX

TOTAL OPERATING COST (A+B) xx XX

PROFIT/LOSS

REVENUE TAKINGS

VEHICLE NO XXX
CARRIAGE CAPACITY (SEATS OR TONNES) XXX
DAYS OPERATED XXX

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 22

A Study on Operating Cost at BMTC

CHAPTER-2
REVIEW OF LITERATURE
INTRODUCTION
A literature review is an evaluative report of information found in the literature
related to your selected area of study. The review should describe, summarise,
evaluate and clarify this literature. It should give a theroretical base for the
research and help you (the author) determine the nature of your research. Works
which are irrelevant should be discarded and those which are peripheral should
be looked at critically.

All works included in the review must be read, evaluated and analysed (which
you would do for an annotated bibliography), but relationships between the
literature must also be identified and articulated, in relation to your field of
research.

"In writing the literature review, the purpose is to convey to the reader what
knowledge and ideas have been established on a topic, and what their strengths
and weaknesses are. The literature review must be defined by a guiding concept
(eg. your research objective, the problem or issue you are discussing, or your
argumentative thesis). It is not just a descriptive list of the material available, or
a set of summaries

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 23

A Study on Operating Cost at BMTC

LITERATURE REVIEW 1:
MOHAMMED QUDDUS (10 April 2007) "Metro Station Operating
Costs an Econometric Analysis" :Evidence from Bangladesh” from
Business Journal, Vol 5.

Mohammed Quddus wrote that "The objectives of this article develop an

econometric analysis of metro station operating cost to identify factors that
create variation in cost efficiency. Stations operating costs can be classified
amongst the semi fixed costs that a metro faces in the sense that they do not
vary proportionately with metro output. They may therefore be important in
determining the degree of returns to density. This article seeks to provide an
improved understanding of some of the major factors driving these costs.
Empirical understanding of some of the major factors driving these costs.
Empirical results show that strong system-specific influences impact costs but
over and above these we detect positive associations from a range of station
characterstics, including the length of passageways, number of platforms, peak-
level service frequency, interchange demand the provision of toilet facilities. In
addition, we find that the presence of air-conditioning has a substantial effect in
increasing expected station operating cost by as much as 40 percent".

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 24

A Study on Operating Cost at BMTC

LITERATURE REVIEW 2:
MEGAN SMIRTI MARK HANSEN (7th November 2008) "Capturing the
Impact of Fuel on Jet Aircraft Operating costs with Engineering and
Econometric Models" Cost & management Book, pg no 45-56

Mr.Megan Smirti Mark Hansen wrote that "The objective of study will
investigate the potential of two operating cost models to capture the effect of
fuel prices on aircraft economics and models to capture the effect of fuel prices
on aircraft economics and, Develop a Total Logistics Cost Model by
incorporating passenger preference Develop a Total Logistics Cost Model by
incorporating passenger preference cost and operating cost. The first cost model
presented is an econometric operating cost model (hereafter, EM), in that it uses
econometric methods to model operating costs based on airline-aircraft
operating cost data."

This study also highlights the predictive potential of econometric operating cost
models. The Leontief technology operating cost model has much strength
transperancy, few inputs, and the ability to provide predictions at a snapshot in
time. However, this study shows the strengths of econometric cost models and
their ability to provide consistent estimates and deep insight into current and
future aircraft cost economic

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 25

A Study on Operating Cost at BMTC

LITERATURE REVIEW 3-
F.GEMEZ, D.SCHOLZ (14" February 2009) "Improvements to Ground
Handling Operations and Their Benefits to Direct Operating Costs" in
International Journal of Operating Cost" vol 10

The objective of this paper systematically identifies and investigates ideas to

improve ground handling operations and determines their influence on Direct
Operating Costs (Doc). First, the importance of ground handling operating
carried out by low cost airlines are described. Then, the main possible features
and analyzed. A methodology has been established to systematically evaluate
the contribution of those features to DOC is developed and justified. As a last
step, recommendations towards ground handling cost reductions are given;
several new systems can be adapted to the current air crafts to improve the
grounding handling operations. Results show that a 3.5% DOC reduction could
be achieved.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 26

A Study on Operating Cost at BMTC

LITERATURE REVIEW 4:-

AUTHOR: B Gary Barnes, Peter Langworthy (17T" January 2003) "The
Per-mile Costs of Operating Automobiles and Trucks" Magazine FROM
INTERNATIONAL JOURNAL ACADEMY vol I pg no. 182-191

This report provides a spreadsheet model for calculating the costs of operating
cars and trucks. This cost will be used in the planning of highway projects. One
challenge faced by the researchers is the fact that highway projects alter the
vehicle operations costs. The researcher used innovative methods to determine
the travel cost estimates based on usage, while excluding the fixed costs of
vehicle ownership. The research also offers methods to adjust the costs for
different driving conditions, like smooth or rough roads. The report also
suggests methods to determine what the cost of operating a personal vehicle or
truck will be in the future.

The specific costs that they have addressed are:

 Fuel consumption
 Routine maintenance
 Repairs
 Tires

They have conclude that in a "baseline" case of highway driving on smooth

pavement, with gasoline price of $1.50 per gallon, trucks average 43.4 cents per
mile. City driving conditions, involving frequent stops and starts, 9.5 cents for
trucks. Extremely rough pavement increases the baseline cost by 2.7 cents"

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 27

A Study on Operating Cost at BMTC

LITERATURE REVIEW 5:-

Daniels. C., (1974) in his journal “Vehicle operating costs in transport

Studies: With special reference to Economist Intelligence Unit" London,
London Cost times. pg no 350-400.
The report examines the factors involved in vehicle operating costs, subdivided
into both running and standing costs, and refers to published research results
which relate some of factors. Much information from transport studies in Africa
is presented and discussed. In particular, emphasis is placed on the relative
vehicle operating costs on roads of different types of surface, ranging from earth
and gravel to good bitumen surfaces, and on different widths of roads. It is
suggested that it is in these areas in particular that the cost differentials show
considerable variation between studies.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 28

A Study on Operating Cost at BMTC

LITERATURE REVIEW 6:-

F. Robusté, A. López-Pita & M. Capdet, (25'h april 1996) "Social costs of
metropolitan passenger transport in Barcelona" journal of Barcelona
times vol 25, 58-65
F. Robusté, A. López-P'ita & M. Capdet, wrote that "relevant variables of
the model, especially the value of time savings, concluding that the m The
article defines the costs (in monetary terms or in other units) of metropolitan
passenger transport in Barcelona, Spain, including public transport modes
(buses, railway, subway and taxi). A graph for the main streets and roads
allowed to estimate traffic congestion costs.
Considered costs include operation costs (fuel, lubricants, tires, and operating
personnel), indirect costs (insurance, taxes, vehicle depreciation, infrastructure,
etc.), travel time (access, waiting, riding and transfer time) and externalities.
The application of the models to Barcelona city yield a cost of 0.51 Euro/pax-
km for public transport
Numerical elasticities for the unit cost to travel speed increases are -0.38 for
public transport, while the same elasticity is -0.57 for speed reductions. A
sensitivity analysis has been performed regarding the most odel is robust.
Effects of unit transfers of trips from public transport to traffic and vice-versa
are also analyzed. The model is also consistent with shopping basket expense
distribution surveys.
In addition to its value as a means of learning about relative social benefit of
transport modes, the model has also the mission of establishing common
grounds for clarity in metropolitan transport data. The objective is to define
future quality of life policies based upon the overall costs of transport as
described in this article

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 29

A Study on Operating Cost at BMTC

LITERATURE REVIEW 7:

Mike Antich (11" December 2015): "Flat Fuel Prices Forecast to Extend
Through 2016" ECONOMIC TIMES NEWS PAPER, PG No.15-39.

Mike Antich (11th December 2015) wrote that "Fuel represents approximately
60 percent of a fleet's total operating costs. Consequently, the stability of fuel
pricing over the 36 months has been the No. Mike 1 factor contributing to
keeping fleet operating costs flat.
This current, multi-year period of fuel price stability has seen the minimization
of unpredictable pricing volatility that resulted in unanticipated price spikes
ravaging fleet budgets in past years.

Over the past decade, the percentage of imported oil has continued to drop with
the increase in domestically sourced oil. This has lowered the impact of price
volatility in oil-producing regions mired in political instability. For instance, the
recent turmoil in Syria, Yemen, and Venezuela resulted in minimal price
volatility in the U.S; which, in the past, most likely would have resulted in
pricing gyrations.

Continued flat fuel prices will be a key factor influencing 2016 and 2017 model-
year acquisitions. It is well documented that fuel prices influence vehicle
acquisition decisions in the retail market, which some fleets are using to their
advantage. New- and used-vehicle markets tend to react to fluctuations in fuel
prices. When prices are low, buyers are more willing to consider larger, less
fuel-efficient vehicles. With fuel prices flat, the impact of fuel cost on fleet
budgets will be driven by total consumption rather than cost per gallon.

A corollary benefit is that lower crude oil prices have kept the cost of
replacement tires stable the past several years. Replacement tires are the third
highest operating cost expense for fleets. The forecast is that ongoing softness
in oil prices will continue to exert downward pressure on replacement tire
prices.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 30

A Study on Operating Cost at BMTC

LITERATURE REVIEW 8:
Mustafa Domenza (21t August 2000) : : "A PARAMETRIC COST MODEL
FOR ESTIMATING OPERATING AND SUPPORT COSTS OF U.S. NAVY
AIRCRAFT" vol X pg no. 175-300

This study provides parametric O&S cost models for future US Navy aircraft
acquisition programs based on physical and performance parameters. The
proposed parametric cost models provide decision makers with a tool for
developing rough-order-of-magnitude annual O&S cost estimates for future US
Navy aircraft acquisition programs. The historic aircraft cost data was provided
by the Naval Center for Cost Analysis (NCCA) in a spreadsheet format and the
data were extracted from the Navy Visibility and Maintenance of Operating and
Support Cost (VAMOSC) data warehouse. After validating the assumption that
the average annual O&S cost for any aircraft type/model/series is constant from
year to year, cost estimating relationships are developed. The first model
developed is based on multivariate regression. In this case, forward stepwise
regression was used to find the model with the best fit. Since the multivariate.
regression model turns out to be impractical, having more than 30 variables in
the equation, a tree-based model is presented as an alternative. Additionally,
single variable cost estimating relationships are formulated based on the
physical and performance parameters length, weight, and thrust.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 31

A Study on Operating Cost at BMTC

LITERATURE REVIEW 9:
TOMMY CHIA Maintenance (O&M) Costs of the Mine Resistant
h Protected (MRAP) Vehicles. UNITED STATES JOURNAL Pg
no.103-114.

This research was initiated by the U.S. Special Operations Command (SOCOM)
to understand the potential operating and maintenance (O&M) cost involved in
the running of their Mine Resistant Ambush Protected (MRAP) vehicles, which
is presently funded under the overseas Contingency Operations (OCO) budget
request. The purpose of this thesis was to develop a model to estimate the future
O&M cost when funding from the OCO budget request ceases and is shifted to
their service's budget. This study analyzed the annual O&M costs of the MRAP
vehicles, using available fiscal year (FY) 2008 and 2009 data from the MRAP
Joint Program Office (JPO) and regression analysis. The regression models
were subjected to tests of statistically significance and due to the shortage of
data, were found to be insignificant. The O&M cost per vehicle for SOCOM
was observed to be much higher than that of other services for most of the cost
elements. There were, however, insufficient data to verify the factors that bring
about the high cost. The importance of the observations lies in the following:

PROBLEMS RECCOMMENDATION

The paucity of the underlying Continue to collect current annual

dataset (FY 2008 and 2009 data) is O&M data for the MRAP vehicles by
the cause of the lack of statistical services, particularly SOCOM.
significance.
Army data representing 75% of Disaggregate data (when available) by
MRAP inventory dominates the services and develop services-unique
analyses. models.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 32

A Study on Operating Cost at BMTC

LITERATURE REVIEW 10:

Maryam Hashami (2004) in his journal "Operating Costs for Commercial
tors in Minnesota", JOURNAL OF MINNESOTA ECONOMIC
TIMES, Pg No .504-555.

This study was performed in order to provide information to use in a benefit

cost analysis of the Spring Load Restriction Policy (SLR) in Minnesota. The
aim of the study was to determine the cost of the SLR policy on the freight
industry. To do so requires an estimate of operating cost per km for commercial
vehicle operators. A survey of commercial road users was performed to
determine the economic impacts of SLR. The average operating cost per km for
commercial vehicle operators has been calculated from the responses.

A Cobb-Douglas model gives the best fit to estimate the total cost from our
data. From the model one can see roughly constant return to scale occur; if
output (total truckloads) increases by 1%, total cost will increase by 1.0

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 33

A Study on Operating Cost at BMTC

CHAPTER-3
RESEARCH DESIGN
INTRODUCTION
Transport or transportation is the movement of people, animals and goods
from one location to another. Modes of transport include air, rail, road, water,
cable, pipeline and space. The field can be divided into infrastructure, vehicles
and operations. Transport is important because it enables trade between persons,
which is essential for the development of civilizations.

Transport infrastructure consists of the fixed installations including roads,

railways, airways, waterways, canals and pipelines and terminals such as
airports, railway stations, bus stations, warehouses, trucking terminals,
refuelling depots (including fueling docks and fuel stations) and seaports.
Terminals may be used both for interchange of passengers and cargo and for
maintenance.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 34

A Study on Operating Cost at BMTC

TITLE OF THE STUDY:

The tittle of the study is “STUDY ON OPERATING COST” in BMTC –
Bangalore Metropolitan Transport Corporation

STATEMENT OF THE PROBLEM:

The operating costing method is applied in those undertaking which provide
services and not engaged in manufacturing tangible products. The cost of
providing a service is termed as “OPERATING COSTING". In many
manufacturing companies operating costing is used in certain departments
which render services. Variation of fuel cost is affecting to the profit when cost
of living increases it affect to the variable cost of BMTC bus charges.

The main problem is the collection of all kinds of operational cost which are
incurred by the company which is very difficult to analyses and assess its impact
on profitability of organization. Hence this study is relavent

SCOPE OF THE STUDY

The operating costing is highly significant for the successful cost management
of any company. Therefore a detailed study of each components of the control
will be highly feasible to study the adequacy and optimum level of operation
costing each vehicle and also to fix the rate for the carriage of passengers or
goods. It is covering the aspects of operational performance of the corporation
from 2013-2014 to 2017-2018.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 35

A Study on Operating Cost at BMTC

OBJECTIVES OF THE STUDY

I. To collect the information about the cost of service being rendered.

II. To know the cost of operating each vehicle.

III. To examine the operating performance of the organization.

IV. To know the present capacity utilization in operating expenses.

V. To suggest the management to overcome the problems that are arised.

LIMITATIONSOF THE STUDY

There is no separate costing department in BMTC and the accounts department
itself looks after the costing aspects. Thus, information was collected from the
accounts department at central office.
 The study relates only to costing system in BMTC and does not apply to
any other services.

 Frequent visiting to the various department and collection information

is not possible.

 It is limited to the facts and figures of the annual and administration

reports provided.

 The study is only on the one financial aspects i.e., operating costing.

 Time is limited for wide coverage of the study

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 36

A Study on Operating Cost at BMTC

METHODOLOGY OF THE STUDY

This is an analytical and descriptive study undertaken to ascertain the

operational Practices in BMTC. It throws light on the operating costing adopted
by the corporation. This is an analytical and descriptive study undertaken to
ascertain the price comparison of different services in BMTC.

 The study is purely an analytical method where in the data have been
analysed on the basis of information supplied by the responded
corporation.

 Visiting and collecting information from MIS department statistics

department and accounts department

 The other relevant information is collected from the manual report and
administration report of the corporation.

 Frequently visiting and collecting information.

 To make the projects more interesting to the readers have added some
graphs and charts that are drawn from the corporation's annual and
administration reports.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 37

A Study on Operating Cost at BMTC

PLAN OF ANALYSIS
The collected data have been have been analysed with the help of techniques
like averages, percentages, etc. To make the data in a presentable manner
wherever necessary tables, chart have been used.

RESEARCH INSTRUMENTS
The study required the collection of information from both primary and
secondary sources which were collected and analyzed to arrive at suitable
interpretation.
The data has been collected both from the primary source as well as from the
secondary sources.

SOURCES OF PRIMARY DATA:

Primary data is the main source of data, which was mainly collected through
the accounts department at central office and with the help of other departments.
Primary data is in original in nature. The data is collected through personal
interview with the assistant manager of the cost and finance department and cost
accountant of the company.

SOURCES OF SECONDARY DATA:

Data has been collected from other sources like, annual accounts and audit
reports i.e., the books provided by the accounts department and administration
reports provided by MIS department and from statistics department and also
from other relevant books. The information is also collected from books,
articles, thesis and company's website

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 38

A Study on Operating Cost at BMTC

CHAPTER SCHEME

1. INTRODUCTION:
This section includes- Meaning, definition of cost and cost accounting,
installing costing system, classification of cost, methods of costing. Operating
costing meaning, definition, introduction, application, characteristics,
objectives, procedure, advantages, disadvantages. Transport costing, Transport
cost sheet format

2. REVIEW OF LITERATURE:
This part includes review of authors about the topic in different context

3. RESEARCH DESIGN:
Introduction, Title of the study, statement of the problem, scope of the study,
objectives of the study, limitations of the study, methodology of the study, plan
of analysis, research instruments.

4. COMPANY PROFILE:
This part includes introduction organization structure, history, environmental
policy, administrative setup, BMTC mission, traffic operation.

5. ANALYSIS& INTERPRETATION:
This section includes analysis and interpretation of questionnaires in the form
of graphs and also analysis of the operating cost of the BMTC

6. SUMMARY OF FINDINGS, SUGGESTIONS AND

CONCLUSION

7. BIBILOGRAPHY, ANNEXURE

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 39

A Study on Operating Cost at BMTC

CHAPTER:-4
COMPANY PROFILE

HISTORY:-
BMTC has its origin in a private company called Bangalore Transport Company
Limited founded in 1940 catering to the entire city with just 98 buses. Then the
Government of Mysore took over the city transport from the private company
by an act and ran buses up to 10- mile radius in the city in 1956 calling it
Bangalore Transport Service [BTS].

1961: Mysore State Road Transport Corporation- MSRTC - (Mysore' was

replaced by Karnataka' later because of the renaming of the State-KSRTC) is
formed by a special act, with BTS as one of its divisions.
1993: BTS got the recognition as a unit under a director with two divisions of
functions as North and South.

On 15th august 1997, Bangalore Metropolitan Transport Corporation (BMTC)

is incorporated as a separate entity having been bifurcated from its parent body
KSRTC. Now, it is fourth biggest public city Transport Corporation in India
and the only profit making public sector urban transport corporation in the
country.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 40

A Study on Operating Cost at BMTC

Objectives.-
The Environmental Cell was constituted with the following primary objectives
 To achieve good environmental performance in the Corporation.

 To establish environmental awareness across the organization.

 To meet the goals of corporate environmental vision.

 To comply with the requirements of all applicable environmental laws

and striving to comply with all Environmental laws.

 For conserving natural resources by improving efficiency and reducing

wastage.

 Forestation program and landscape development at Depots, Bus stations

and Central Office.

 To implement new projects on environment as and when necessary

Environmental corporate policy:

a. Environmental sustainability is our destination and "cradle-to-grave" is
our path. Our entire corporation and all stakeholders will value and share
this vision.

b. Through eco-effective technology, we will continuously redesign our

products, our processes for improvement of our corporation.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 41

A Study on Operating Cost at BMTC

ENVIRONMENTAL POLICY-

BMTC, a Government of Karnataka Undertaking involved in providing

transport solutions to the commuters of Bangalore city is committed to provide
environment friendly operations with the following commitments.

 To comply with statutory and regulatory requirements with regard to

environment.

 To involve relevant stake holders in planning and review of its

Environmental Management Systems

 To motivate and impart training to employees to contribute proactively

to improve environmental performance

 Adoption of environment friendly transport operations through

technological up-gradation and pollution reduction measures on
continual basis with special focus on natural resources.

 To adopt and practice resource optimization measures on continual basis

GROWTH DURING 2017-18:-

BMTC is catering to the transport services in city and suburban

areas of Bangalore in a radius of about 40.4 kms and the area of operation is
expanded from 3527 Sq. kms to 5130 Sq. kms in view of Greater Bangalore.
The operations have improved during the year by adding 217 schedules. The
no. of schedules were increased from 5949 to 6189, 549 vehicles were added
and 268 aged vehicles were scrapped/transferred and removed from the fleet
during the year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 42

A Study on Operating Cost at BMTC

REASONS FOR STARTING:

BMTC is one of the Cost-Effective modes of transport. Its fare is the lowest
compared to other transport facilities. BMTC buses occupy least space on the
roads when the numbers of road user are taken into account. One bus easily
carries 60 persons on an average unlike two wheelers and four wheelers. This
helps reduction traffic congestion and increasing road safety and four wheelers.
This helps reducing traffic congestion and increasing road safety and road life.

BMTC saves the most precious fuel and thereby saves the most valuable
foreign exchange. Use of more numbers of 2 wheelers and four wheelers on the
roads means consumption of fuel using BMTC more for travel means saving
fuel and foreign exchange. BMTC reduces air pollution, as they are less in
number of two wheelers and four wheelers. Using BMTC more travelling means
reducing air pollution considerably. On 15th of August 1997 BMTC is
incorporated as separate entity having been bifurcated from its parent body
KSRTC. Now BMTC is celebrating Bus day on of 4'h day of every month.

VISION OF BMTC

"MAKE BMTC SUSTAINABLE, PEOPLE -CENTERED AND CHOICE

MODE OF TRAVEL FOR EVERYONE"

The Bangalore Metropolitan Transport Corporation is the sole public bus

transport provider for Bangalore, serving urban, sub-urban and rural areas.
BMTC is committed to provide quality, safe, reliable, clean and affordable
travel. The testimony of its success lies in increasing passenger trips everyday
by a wide range of customer base. In an effort to modernize its services for
commuter comfort, BMTC strives to strengthen information system and
improve processes through introduction of intelligent technology solution,
make capacity enhancement through infrastructure development, user-friendly
interchange facilities, fleet upgradation and augmentation, apart from its core
activities, which includes fare structuring, route network optimization, planning
and monitoring. BMTC reaches far and wide, in every nook and comer of the
city, making public transport an attractive travel choice of everyone. BMTC's
stronghold in the area of public transport in Bangalore is a testimony to its
adoption of sound management, HR, Quality and Environmental policies and
strong support from the Government of Karnataka and esteemed passengers.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 43

A Study on Operating Cost at BMTC

MISSION OF BMTC

1. Provide people-centered (quality, efficient, integrated and safe) services

2. Commuter responsive service planning and promotion
3. Optimize resources and build capacity
4. Adopt environment-friendly and sustainable practices
5. Strengthen commuter feedback mechanism
6. Modernize and maintain zero breakdown fleet
7. Evolve effective mechanism to monitor service performance
8. Conduct safety training, performance audits and awareness for stake holders
9. Conduct safety training, performance audits and awareness for stake holders
10. Increase commercial revenue through monetizing land, buildings & buses
11. Increase efficiency in operations and administration
12. Ensure inter-agency coordination and multi-model integration.
13. Formulate and enforce police measures for sustainability of the service
provision
14. Implement Intelligent Transport System to improve the quality of service
15. Extend travel concession to the weaker sections of the society
16. Act as an agent for cultural synthesis and national integration
17. Promote research on urban transport
Table:4.1
Details of Capital Expenditure

SL.NO Particulars Capital expenditure (lakh)

1 Buses-549 and domestic vehicles 119304.7
2 Purchase to land 18839.66
3 Purchase of plant and machinery 2507.63
4 Computer hardware 441.72
5 Departmental vehicles 537.61
6 Buildings (including those in progress) 6767.16
Total 209302.5

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 44

A Study on Operating Cost at BMTC

Future outlook :-
The future outlook of the corporation seems to be a challenging one.
However the near proactive steps announced by the Central and State
Governments would provide a ray of hopes to the Corporation. Therefore, time
has come to redefine the objectives so as to ensure its healthy existence.

In line with the above, the Corporation has planned to expand its traffic
operations in urban agglomeration of Bangalore Mega city. Lands for
construction of Depots and bus Stands are being procured now. The Corporation
has inducted 471 Low-Floor High Capacity Ultra-Modern AlC VoLVO Vajra
Buses to the city fleet.

Electronic Ticketing Machine is being introduced to curb pilferage and avoid

inconvenience etc., Introduction of smart cards, replacing traditional monthly
commuter passes and tickets are on the anvil. Apart from this, the Corporation
has planned to introduce Automatic fare collection system.

SOCIAL OBLIGATIONS:-
 Connecting all villages around the city through its regular service with
busses indicating destination in red board

 Plying city services to the core areas to ease congestion with busses
indicating destination in black board.

 Running limited stop buses to save time of the commuters.

 Providing comfort oriented fast moving Pushpak buses.

 Chartering services to various industries, schools and colleges.

 Offering subsidized travel to the deserving sections of the society.

 Issuing passes to various segments of the society.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 45

A Study on Operating Cost at BMTC

 Providing Eco-friendly 'Parisaravahini' buses.

 Plying 'Mini' buses to provide transport to remote sub urban areas.

 Running 'Vestibule' buses to carry more passengers.

 Upgrading Transport services by introducing Volvo' buses in the city.

 Providing city sightseeing 'Curitiba' bus

 Special services to cater to the needs of ladies, sick people.

 Special PASS buses for daily, monthly and student pass holders are in
introduced.

 providing peak hours services at morning and evening.

RECENT INNOVATIONS IN BMTC

BMTC's route to better commuter services steered it on the path of innovation.
It introduced good-looking vestibule buses to carry more passengers. Low floor
buses were introduced for the first time in India for the safety of commuters. To
prevent footboard travelling and to ensure the safety of commuters when
boarding and disembarking, it introduced pneumatic door facilities. The
Environment-friendly (Parisaravahini) buses run by the corporation have been
widely appreciated by the commuters.

The Bangalore Metropolitan Transport Corporation (BMTC) is going many

innovations very periodically to help the city-bus commuters.
Now there is lot of new things happening at BMTC
Recently BMTC has introduced a special kind of buses which are very
unique in India

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 46

A Study on Operating Cost at BMTC

1. LADIES SPECIAL BUS:

A new pink color buses are on the roads of the city, these buses are dedicated
only for women 7 all kids below 12 years.
This is especially considered with lot of complaints from women commuters
where they used to face lot of issues from men's in bus, currently there are 25
buses running and soon plan to add another 30 buses.
2. Hospital Special Bus:
This is new concept from BMTC in order to help the patients coming to
Bangalore to visit various well know hospitals, here only patients with a helper
or a supporter is allowed to travel, currently there are 3 routes operating from
Kempe Gowda bus terminal& planned to introduce much more base on the
response from the people. In order to identify this bus easily this will we having
a red cross on the bus.

3. Three-door Bus:
A new three door buses with a single entrance & separate exit points for men &
women. This is been in place after a suggestions considered from women bus
commuters, Here conductor will sit at the entry point & makes easy to buy the
ticket& move inside the bus.

4. Vayu vajra bus:

Green coloured Volvo buses operated in 12 routes connecting to Kempegowda
International Airport. Free wi-fi access is provided to the commuters in these
buses.

5. Marcopolo AC and Corona AC:

Air conditioned buses with lower fare than Vajra services plying on select
routes.

6. Metro feeder:
Special buses running on 10 routes as feeder network to the metro
Stations

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 47

A Study on Operating Cost at BMTC

7. Hop On Hop Off

this service was introduced for sightseeing in Bangalore. It covers a route
connecting about twenty landmarks of great historic, religious and scientific
significance

8. Mercedes Benz:
BMTC has also introduced Mercedes company buses on a trial bases
which is under progress.
DIFFERENT VARITIES OF BUSES INTRODUCED BY BMTC IN
RECENT YEARS

ECO FRIENDLY BUSES INTRODUCED BY BMTC

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 48

A Study on Operating Cost at BMTC

VAYU VAJRA BUS INTRODUCED BY BMTC DURING 2013

HOP ON HOP OFF BANGALORE

ZERO EMISSION THE ELECTRIC BUSES INTRODUCED BY BMTC

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 49

A Study on Operating Cost at BMTC

REWARDS AND RECOGNITION:-

Awards conferred on BMTC:

The corporation has been conferred with the following awards during the year
2014-15

1.ASRTU awarded- transport excellent award 2016 (leave management system)

2.Skoch Award for Hop on Hop off service 2017
3. Skoch Award for women safety in travelling 2018
4. ASRTU National Public Transport Excellence Award "cleanliness at work
place " for maintaining cleanliness at depots and bus stands
5. ASRTU productivity award
6. Republic Day Governor Recognition award
7. Global brand excellence PR professional of the year-2018 for the initiative of
hop on hop off services
8. BMTC secured 2nd place in best practices award 2013-14, for its initiative
on CMAK award for "IT application in Employee Leave management system"
in innovative HRM
9. ASRTU award for minimum operational cost in city service during 2011
10. ASRTU award for Highest Tyre Performance in city service during the year
2015-16

Rewards
During the year 2013-14 cash reward of Rs.22, 450.00 was distributed among
60 Conductors/Driver/ Driver cum Conductors/ Security personnel/ Line
checking and Security staff & Officers for having detected various types of
bogus/duplicate passes and

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 50

A Study on Operating Cost at BMTC

USE OF INFORMATION TECHNOLOGY

The Corporation has taken the following measures in use of information
technology.

 BMTC has initiated to improve the services by monitoring through

Global Positioning System (GPS) Technology. As on today 1000
vehicles are monitored using GPS

 Commuter friendly Internet based bus route information system

introduced.

 Commuter friendly bus timetable containing the bus departure details of

city, suburban and pushpak services along with route maps is
introduced.

 BMTC has introduced e-tendering system for procuring spares to ensure

transparency in the system.

 BMTC has introduced E-KART system (casual contract) for easy

available of buses on casual contract even for short duration on hourly
basis.

 BMTC has introduced Electronic Clearing System (ECS) of

disbursement of salary to all its employees.

 Smart card is issued for student passes and identification cards for
monthly passes.

 BMTC has introduced Electronic Ticketing Machines for issues of

tickets in the buses on pilot basis.

 Introduction of LED destination Board in buses.

 Information regarding BMTC is available on website. Launching of

website for online recruitment.

 Passenger information system and IVRS on the anvil.

 Electronic pass vending machine (pass with photograph) installed in

Kempegowda Bus Station.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 51

A Study on Operating Cost at BMTC

CHART NO 4.2
ORGANIZATIONAL STRUCTURES

BOARD OF
DIRECTORS

CHAIRMAN

MANAGING
DIRECTOR

CHIEF
MECHANICAL
CHIEF
ACCOUNTS
CHIEF
PERSONNEL
DIRECTOR
CHIEF CIVIL
CHIEF TRAFFIC
OFFICER
CHIEF
LABOUR

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 52

A Study on Operating Cost at BMTC

CHART NO 4.3
DEPARTMENTAL STRUCTURE CENTRAL OFFICE

Mechanical Engineering Department


Traffic Department

Stores and Purchase Department

Civil Engineering Department

Administrative Department

Statistical Department

Security and Vigilance Department

Law Department

Labour and Welfare Department

Accounts Department

General Categories

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 53

A Study on Operating Cost at BMTC

Traffic Department Statistical Department

Chief Traffic manager Chief statistician
Divisional traffic officer Deputy chief statistician
Assistant traffic manager Divisional statistician
Superintendent
Assistant traffic superintendent
Traffic inspector, supervisor Statistical assistant
Assistant controller Conductor and driver

VARIOUS DEPARTMENTS AT CENTRAL OFFICE:

 Administration Department

 Accounts Department

 MIS Department

 Statistical Department

 Purchase Department

 Labour Department

 Traffic Department

 Mechanical Engineering Department

 Stores Department

 Human Resource Department

 Medical Department

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 54

A Study on Operating Cost at BMTC

CAPITAL CONTRIBUTION-

BMTC came into being on 15th August 1997, after bifurcation from its parent
corporation- KSRTC that is wholly owned by the State Government. The share
capital of the corporation consists of capital contribution as well as equity
contribution The share of the Corporation a fully subscribed by the State
Government. It can also subscribe share to general public with prior approval
from the State Government. The Capital contribution made by the State
Government is 12.25lakhs and the Equity capital amounts to Rs. 10459.48lakhs.

LOCATION:

As the name indicates BMTC is mainly situated in Bangalore and operates in

Bangalore City covering each and every comer of the city BMTC is catering the
transport services in the city and suburban areas of Bangalore in a radius of
about 40.40 kilometers. Presenting BMTC is having one corporate office in
Shanthinagar, and central workshop and regional workshop in Shanthinagar and
its depot is situated in it different location to render service in each and every
nook and corner of the city

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 55

A Study on Operating Cost at BMTC

TYPES OF SERVICES PROVIDED BY BMTC:

CONVENIENT SERVICES:
Here's a quick tour of some of the service introduced by BMTC in the recent
past.
1. SUBURBAN MAIN BUSES

Introduced by suburban mini buses services to provide transport

facilities to the sub-urban areas far-off villages bordering them

2. RING ROAD SERVICE

Launched Ring Road service on the outer and inner Ring Road
connecting commuters from south to north and East to west. The services
operate at a frequency of every five minutes on the outer Ring road and 10
minutes on the inner ring road during peak hours.

3. NIGHT SERVICE
Commenced Night Services to provide transport service for commuters
traveling from Kempegowda station to different residential areas during late
night and early morning. These services operate at one-hour frequency.

4. ACCOUNT BUSES:
Account Buses were introduced from selected points to Kempegowda Bus
Station at 30-minutes frequency in the morning and evening.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 56

A Study on Operating Cost at BMTC

5. METRO BUS SERVICE

The corporation introduced two pilot Metro Bus Services from JP Nagar 6th
phase to Hebbal and from Annapoormeshwari layout to Jeevan Bhimnagar.

In addition to such pushpak services, BMTC runs the usual city services.
Currently there are 4 services that are rendered by BMTC.
1. General shift buses that run from 8.Am to 5.Am.
2. Shift buses, which run from 6 to 12 managed by separate crew for each
shift.
3.Pushpak service whose timings full in line with that of the general shift
buses.
4.Volvo buses are also run on general shifts.
It may be stated that, BMTC has tremendous growth potential considering the
extending frontiers of Bangalore and ever packed to capacity buses. Usually
there are three types of services that are rendered by the corporation namely city
services, suburban services and pushpak services.

a. CITY SERVICES:
Plying City Services to the core areas to ease congestion with buses indicating
destination in blank board

b. SUB-URBAN SERVICES
It discharges its social obligation by connecting all the villages around the city
through its regular service with buses indicating destination in red board

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 57

A Study on Operating Cost at BMTC

c. PUSHPAK SERVICES
Running limited stops buses to save time of commuters, comfort oriented
and for moving pushpak buses.
OTHER SERVICES
These are services operating in specific areas tailored to meet specific travel
needs of particular areas such as Outer Ring Road City extension sub urban
destinations, peak hour, Feeder, Night Service etc as detailed:

1. Ring Road Services:

Apx 220 services are operated exclusively on the outer Ring Road Providing
direct connectivity between locations on the city periphery abutting the ORR
bypassing the city. They have helped in reducing congestion in the city by
avoiding travel through city. More services are planned.

2. TRUNK SERVICES:
Provide direct connectivity between different areas of the city by bypassing the
major Bus Stations to avoid the congestion and the resultant delays.

3. PEAK HOUR SERVICES:

These are additional services operated during morning and evening peak hrs,
between the city center, the administrative complex around the Vidhana Soudha
and different localities in and around the city. The timing of the oeration is tuned
to the needs of the office goers in particular

4. NIGHT SERVICES:
BMTC operates nearly 100 such services for the benefit of late night travellers
specially those departing or arriving into the city late through buses and trains
who were otherwise left at the mercy of other less secure and prohibitive modes
of travel. They are operated from all most all important extensions and localities
to the Kempegowda Bus Station upto 2400 hrs and from 0400 hrs in the early
morning. The ticket rate is one and half the normal.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 58

A Study on Operating Cost at BMTC

5. FEEDER SERVICES:
To provide direct connectivity between adjacent localities with high travel
potential BMTC has introduced the concept of feeder services. THEY ARE
BEING OPERATED IN SELECTED AREAS TO THEST THEIR VIABLITY
OF their replication in other areas. At present 40 services are in operation.

SPECIAL SERVICES
BMTC apart from normal services operates some services specially on
specific demands from private entities such as Factories, IT concerns,
Educational Institutions, Corporate Offices etc., to provide transport to
their employees of students. Also such demands come for special
occasions such as marriages, social, political or religious gatherings etc.,
these are as detailed below:

a. CHARTERED SERVICES:
BMTC provides ordinary/pushpak/janpriyavahini/pushpak on
chartered basis to industries, education institutions and other public or
private establishments who require special travel facilities on a regular
basis. These services are provided on mutual agreement on
competitive fares on chartered basis.

b. CASUAL CONTRACT:
BMTC provides buses on casual contract to public on demand for
excursions, tours,marriages and for other occasions that requires
providing transport to a certain group of passengers intent on visiting
predetermined places. These services are offered on hourly and daily
basis.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 59

A Study on Operating Cost at BMTC

New services introduced by BMTC:-

a. BIG-10 services
i. BIG10 is the brand name given to Suvarna services operated on all the
12 major traffic corridors of the city that connect it with the
surrounding suburbs. They are Kanakapura road, Mysore road

Bannerghatta road, Sarjapura Road etc. The passengers can travel in

any direction of their choice and change the buses anywhere by
traveling in these buses which have good frequency. These services are
operated limiting to periphery of important traffic places to decongest
the traffic in Kempegowda bus station which is in CBD and to control
private operations.

b. Atal Sarige
A new service branded Atal Sarige aimed at providing direct connectivity at
cheaper rates to areas populated by economically weaker & marginal sections
was introduced as a populist scheme of the Government. The rates of these
services are half of ordinary services.

c. Metro Feeder Services

These are the latest services introduced by BMTC aimed at providing good
connectivity between metro stations and neighborhood areas around them.
BMTC plans to expand network of these services with the expansion of metro.

d. Vajra Buses
Along with normal buses to give more comfort for the commuters BMTC has
also started Vajra buses with air condition connecting different major stations
from kempegowda bus station to electronic city vidyaranyapura, vijayanagar,
katriguppe etc

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 60

A Study on Operating Cost at BMTC

e. Free railway Services

For the convenience of railway passengers, BMTC has started free
railway services. At present these services are operated from major
BMTC bus station such as Kempegowda bus station to city railway
station and Yeshawanthpur bus station to Y eshawanthpur railway
station.

2. Hop on Hop off

this service was introduced for sightseeing in Bangalore. It covers a route
connecting about twenty landmarks of great historic, religious and scientific
significance

3. Mercedes Benz
BMTC has also introuduced Mercedes company buses on a trial bases which is
under progress.

4. Marcopolo AC and Corona AC:

Air conditioned buses with lower fare than Vajra services plying on select
routes.

K-Route
These services were introduced on K-1, K-2 and K-3 routes forming a chain to
provide direct connectivity between diagonally placed interior areas of the city
bypassing the CBDs. They have not only brought down the traveling time but
have also spared the core area roads from further congestion. For this reason
these routes have achieved high degree of public patronage in short period of
time. Encouraged by the public response BMTC has introduced services under
K-series on 3 more routes namely K-4, K-5 and K-6. These services too provide
direct connectivity in shorter travel time between similar destinations thus
making the journey more convenient and

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 61

A Study on Operating Cost at BMTC

Advantages of public
The renewal of and re-investment in inner city housing, helpful in-reducing
journey to work trips and aiding maximum use of public transport as well as
improving social inclusion. The re-development of urban areas in advance of
virgin land on the city and town out skirt, further helping to minimize traffic
growth. Vast improvements in the standard of design architecture and layout of
higher density development, it can no longer be raised high and can help create
vibrant communities. The re-generation of cities to make them safer more
attractive so helping to reduce the drift from town to country.

SWOT ANALYSIS

STRENGTH:
1. Labour force with high level of professionalism, skill and dedication
2. Induction of IT and IT savvy supervision and administrative staff
3. Total Monopoly in its field of activity
4. Minimum Government and political interference in day to day functioning of
Corporation.
5. Posting of seasoned and visionary CEOS to head the Corporation for Long
stints which ensures continuity and smooth implementation of their vision plans
6. A supportive political leadership
7. Very cordial management labour relations
8. Good public support
WEAKNESS:
1. Union activity though at a comparatively subdued level
2. Perennial crew shortage3. Labor Indiscipline
4. Burden of shouldering social obligations in the form of loss making
operations unsub sized concessional to different sections of society
5. Lack of total freedom in financial matters particularly with regard to
passenger bus fares
6.Impediments in the form of transparency loss, accountability into Right to
Information

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 62

A Study on Operating Cost at BMTC

OPPORTUNITIES:
1) Ever growing demand for public transport.

2) New avenues of revenue generations like advertisement, exploitation of

real estate resources etc.

3) A perceptible shift in public mind in favor of public transport Increase

in demand in transport services

4) Exploitation of new avenues through penetration into areas earlier

monopolized by personalized and semi personalized transpor

THREATS:
1. Competition from clandestine operators
2. Lack of primacy for public transport at Govt decision making level
3. Steady increase in cost inputs.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 63

A Study on Operating Cost at BMTC

CHAPTER-5
ANALYSIS & INTERPRETATION

In this chapter, the subject background of Operating Costing has been given in
brief The chapter contains the study of Operating Costing prevailing in BMTC,
explained with receipts has also been done along with the study of fare structure
and fare revision.

Operating Costing is the cost of producing and maintaining service. This

method of costing is applied to undertaking, which provide services rather than
production of commodities.

OPERATING COST:-
The total cost of operation works out Rs.2211.91 crores as against Rs.2066.41
crores over the period year recording a growth of 7.04%. This is due to increase
in staff cost, HSD & other cost. The CPDs registered an increate to the extent
of 7.41%.

ANALYSIS OF OPERATING COST

Table showing below explains the Operating Costing which has been analyzed
in BMTC, during 2013-2014 and 2017-2018

OPERATIONAL PROGRESS
For calculating the operational progress of the corporation the following will be
taken into consideration. Kilometers operating will consist of:

 Gross kilometers
 Effective Kilometers &
 Dead Kilometers

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 64

A Study on Operating Cost at BMTC

1. GROSS KILOMETERS:

Gross kilometers are the total number of kilometers run by the buses in the
corporation. While calculating the Gross kilometers, the log sheets maintained
by the drivers, which contains the number of kilometers run by that particular
bus for a day is taken as base and grossed up for a year. The total number of
kilometers run by each bus is totaled/summed up to arrive at Gross kilometers.
During the year 2014-15, the gross kilometer was 4902.74 lakhs kilometers as
against 5000.67 lakhs kilometers in the year 2013-14.

2. DEAD KILOMETERS:

Dead kilometers are kilometers run by each bus from bus stand depot and vice-
versa without carrying passengers. Dead kilometers will be calculated in order
to arrive at Effective kilometers. During the year 2017-18, the Dead kilometers
were 194.18 lakhs kilometers as against 204.77 lakhs kilometers in the year
2013-14.

3. EFFECTIVE KILOMETERS:
Effective kilometers will be calculated by deducting Dead kilometers from
Gross kilometers. During the years 2017-18 effective kilometers was 4708.56
lakhs kilometers as against 4795.90 lakhs kilometers in the year 2013-14.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 65

A Study on Operating Cost at BMTC

TABLE 5.1
THE OPERATIONAL KILOMETERS

DURING THE YEAR

2016-17 2017-18

FACTORS TREND AMOUNT TREND AMOUNT

(%) (%)

Gross 100 5000.67 100 4902.74

kilometer

Less:Dead 4.10 204.77 3.96 194.18

kilometers
Effective 95.9 4795.90 96.04 4708.56
kilometers

The above data is used for the calculation of percentage if dead kilometers
to effective kilometers and average daily service kilometers performed.

Percentage of dead kilometers of effective kilometers is calculated using he

following formula.

% of dead kilometers to effective kilometers = Dead kms * 100

Effective kms

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 66

A Study on Operating Cost at BMTC

Calculation of percentage of dead kilometers to effective kilometers during

the year

2016-2017= 204.7 *100

4795.90

=4.27 lakhs kms

2017-2018=
=4.12 Lakhs kms

An average daily service kilometer is calculated using the following formula

Average daily services kms = Effective kms
365days

Calculation of average daily service kilometers during the year

2016–2017= 4795.90
365
= 13.13 Lakhs kms
2017-2018= 4708.56
365

=12.90km

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 67

A Study on Operating Cost at BMTC

TABLE 5.2:
THE EFFECTIVE KM OPERATED (LAKHS)

YEAR EFFECTIVE KMS PERCENTAGE

OPERATED CHANGES OVER
PREVIOUS YEAR
2013-2014 4580.20 0

2014-2015 4655.20 1.64

2015-2016 4638.39 0.36

2016-2017 4795.90 3.4

2017-2018 4708.56 1.82

Source: BMTC ANNUAL ACCOUNTS & AUDIT REPORTS

Interpretation :

The able table shows the details of effective kms of BMTC during the year
2013-14 to 2017-18 were 4580.20, 4655.20, 4638.39, 4795.90, 4708.56
respectively the percentage changes over previous year has been drastically
increasing and decreasing and this year it has increased from 1.64 to 1.82 in the
year 2017-18.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 68

A Study on Operating Cost at BMTC

GRAPH 5.1:
THE EFFECTIVE KMS OPERATED (LAKHS)

4795.9
4800

4750
4708.56

4700
4655.2 4638.39

4650

4580.2
4600

4550

4500

4450
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.2

Inference

During 1998-99 the services kms operated was in the order 1502.32 lakhs. The
corporation has increased the services kms by augmenting more and more more
schedules year after year. This has helped in improving the service kms in 2013-
14, 4580.20 lakhs in 2013-14, 4655.20 lakhs in 2014-15 4638.39 lakhs in 2015-
16 it was 4795.9, during the present year the corporation operated 4708.56 lakh
effective kms operated it has operated more in past five years but slightly
decreased compared to previous year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 69

A Study on Operating Cost at BMTC

TABLE 5.3:
THE COST PER KILOMETERE

Year CPKM (in paise) Percentage changes

Over previous year

2013-2014 2792.4 0

2014-2015 3182.9 13.98

2015-2016 3898.8 22.49

2016-2017 4486.1 15.06

2017-2018 4930.9 9.91

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :

the above table shows the details of cost per km of BMTC during the year 2014-
15, 2015-16, 2016-17, 2017-18 were 15.66, 22.49, 15.06, 9.91 respectively. The
percentage of cost for each kilometer has been decreased from 2013-14 to 2014-
15 it was ranges from 15.66 to 13.98 respectively, but it has increased from
13.98 to 22.49 in the year 2014-15 to 2015-16 and again it has decreased from
2016-17 to 2017-18 ranging from 15.06 to 9.91. it has been decreasing from
past two years where it is majorly reducing its cost.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 70

A Study on Operating Cost at BMTC

GRAPH 5.2:
THE COST PER KMS OF BMTC

5000
4930.9
4500 4486.1
4000 3898.8

3500
3182.9
3000
2792.4
2500

2000

1500

1000

500

0
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table 5.3

Inference :
from the above graph it has been clearly inferred that the cost per km in BMTC
buses has been gradually increased from year 2013-14 to 2017-18. So according
to the graph and the above table the cost per km is getting increased year by
year compared to the previous things have slightly changed so there is an
gradual increase in the cost per kms of the BMTC buses.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 71

A Study on Operating Cost at BMTC

TABLE 5.4:
THE EARNINGS PER KILOMETERE

Year EPKM Percentage changes

over previous year
2013-2014 2092.4 0

2014-2015 3228.9 11.25

2015-2016 3579.8 10.87

2016-2017 4199.3 17.30

2017-2018 4793.7 14.15

Source: BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :

The above table displays the details of earnings per km of BMTC during the
year 2013-14, 2014-15, 2015-16, 2016-17. It has increased its earnings from
2013-14, 2902.4 to 4793.7 in 2016-17 respectively. The earnings for each
kilometer is earned due to its effective kilometers that has increased every year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 72

A Study on Operating Cost at BMTC

GRAPH: 5.3:
THE EARNING COST PER KILOMETERE

6000

5000
4793.7
4199.3
4000
3579.8
3228.9
3000

2092.4
2000

1000

0
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.4

Inference :
The above graph is referred that, there is a increase trend in the earning per km
of BMTC from 2013-14 to 2017-18. The earning cost per kilometer in BMTC
has gradually increased year by year each km cost has been increased compared
to the all previous years.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 73

A Study on Operating Cost at BMTC

TABLE 5.5:
THE MARGIN PER KILOMETERE

Year Margin per km Percentage changes

( in paise ) Over previous year

2013-2014 109.9 0

2014-2015 46.0 58.14

2015-2016 -319.0 593.4

2016-2017 -286.8 10.3

2017-2018 -137.9 51.9

Source: BMTC ANNUAL ACCOUNTS & AUDIT REPORTS

Interpretation :
The above table shows the details of margin per km of BMTC. Percentage of
margin per kms was increased drastically from 58.14 to 593.4 during 2016-17,
and again it was increased to 51.9 during 2017-18. This is due to there was
negative margin in past three years in the corporation.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 74

A Study on Operating Cost at BMTC

GRAPH 5.4:
THE MARGIN PER KM OF BMTC

150 109.9

100 46
50

0
2013-14 2014-15 2015-16 2016-17 2017-18
-50

-100

-150
-137.9
-200

-250

-300 -286.8
-319
-350

Sources : Table no 5.5

Inference :
The above graph referred that, there is increase in 2013-14 to 2014-15 of 109.9
, 46 respectively but in the past three years there is a slightly decrease in margin
and it has negative impact if -319, -286.8 in the year 2015-16, 2016-17
respectively, but comparatively there is less negative impact in the year 2017-
18 of -137.9 .

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 75

A Study on Operating Cost at BMTC

TABLE 5.6:
THE OPERATING REVENUE OF BMTC

YEAR 2013-14 2014-15 2015-16 2016-17 2017-18

Rs.in 121123.53 138625.61 151600.16 176557.36 199411.06

Thousand

Per 2264.50 2977.84 3268.39 3681.42 4235.08

vehicle
Km (in
paise)

Source: BMTC ANNUAL AND AUDIT REPORT

Interpretation:

The above table shows details of operating revenue in BMTC from past five
years, it has increased its revenue from past 5 years and this year it has increased
its operating revenue amounted to Rs.1994.57 crores showing an increase of
11.29% over 1765.57 crore for the previous year. This was mainly due to
revision of fares. It has increased its fares just to neutralize the increase in the
cost of HSD, staff cost and other cost.
The revenue is mainly earned from sale of tickets, various passes and also casual
contract services which is has increased but not decreased from past 5 years.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 76

A Study on Operating Cost at BMTC

GRAPH 5.5:
THE OPERATING REVENUE OF BMTC

250000

199411.06
200000
176557.36

151600.16
150000 138625.61
121123.53 Series 1
Series 2
100000

50000

2264.5 2977.84 3268.39 3681.42 4235.08

0
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.6

Inference :
Here is pictorial representation of the graph showing the variation of operating
revenue from 2013-14, 2014-15, 2015-16, 2016-17, 2017-18. The graph
represents operating revenue of rupees in thousand as well as per vehicle kms
(in paise) respective

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 77

A Study on Operating Cost at BMTC

TABLE 5.7
THE OPERATING EXPENSES

Year Rs.in Per vehicle km

Thousand (in paise)
2013-14 125003.8 2729.22

2014-15 145084.6 3116.61

2015-16 175049.07 3773.93

2016-17 206641.07 4308.70

2017-18 221191.04 4697.64

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :
The above table shows the operating expenses incurred in BMTC from 2013-
14 to 2017-18. Here the operating expenses has gradually increased yearly this
due to its latest innovations and changes in the fleet and as well as buses
currently the corporation has made 2211.91 crore expenditure for its operations
it has incurred 10.70% more of previous year i.e 2066.41 crores in 2016-17.
The expense mainly incurred for purchase of new buses, repairs and
maintenance as well as new innovations.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 78

A Study on Operating Cost at BMTC

GRAPH 5.6:
OPERATING EXPENSES OF BMTC

250000 2017-18,
2016-17, 221191.04
206641.07
200000 2015-16,
175049.07

2014-15, 145084.6
150000
2013-14, 125003.8

100000

50000

0
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.7

Inference :
The above graph shows pictorial representation of operating expenses in
BMTC. The graph clearly shows that there is gradual increase in the expenses
incurred from 2013-14 to 2017-18. And also in per vehicle kms (in paise). i.e
2013-14 it is 2729.22, 2014-15 it is 3116.11, 2015-16 it is 3773.93, 2016-17 it
is 4308.70, 2017-18 it is 4697.64.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 79

A Study on Operating Cost at BMTC

TABLE 5.8:
AVERAGE REVENUE EARNED (paise per km)

Year Average revenue Percentage changes

Earned (paise per km) over
Previous year
2013-2014 2902.40 0

2014-2015 3328.80 14.70

2015-2016 3579.82 7.54

2016-2017 4199.30 17.30

2017-2018 4793.07 14.13

Source: BMTC ANNUAL ACCOUNTS & AUDIT REPORTS

Interpretation :
The above table shows the details of average revenue earned paise per km of
BMTC buses. Revenue has been increased from past five years it is due to its
sale of tickets and various passes and also casual contracts this includes also
some subsidy from government. Revenue was increased from 2013-14 to 2017-
18 consequently from 2902.40, 3328.80, 3579.82, 4199.30, 4793.07
respectively.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 80

A Study on Operating Cost at BMTC

Graph 5.7:
The average revenue earned (Paise per km)

Chart Title

5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2013-14 2014-15 2015-16 2016-17 2017-18

average revenue earned (paise per km)

Sources : Table No 5.8

Inference :
The above graph referred that there is an average revenue earned (paise per km)
increasing trend in every year from 2013-14 to 2017-18. The revenue of BMTC
is gradually increasing year by year the cost per km has been increased too
because of this the revenue cost per earnings has also been increasing year by
year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 81

A Study on Operating Cost at BMTC

TABLE 5.9
THE AVERAGE EXPENDITURE (Paise per km)

Year Average expenditure Percentage changes

(Paise per km) Over previous year

2013-14 2792.40 0

2014-15 3182.80 13.98

2015-16 3898.80 22.50

2016-17 4486.06 15.06

2017-18 4930.91 9.91

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :
The above table shows average expenditure (paise per km). The expenditure is
increased year by year as cost for each km and revenue is also increased the
expenditure incurred by BMTC is also increased the expenses is incurred on
purchase of new busses and also there is new service by BMTC i.e hop off
Bangalore rounds it is due to this service BMTC is incurring more expenses
from past two years. The expenditure ranges from 2792.40, 3182.80, 3898.80,
4486.06, 4930.91 respectively from past five years.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 82

A Study on Operating Cost at BMTC

GRAPH 5.8:
THE AVERAGE EXPENDITURE (Paise per km) BMTC BUSES

6000

4930.91
5000
4486.06
3898.8
4000

3182.8
3000 2792.4

2000

1000

0
2013-14 2014-15 2015-16 2016-17 2017-18

Source: TABLE NO 5.9

Inference :
The above graph referred that there is an increase in average expenditure ( paise
per km ) of BMTC from the year 2013-2014 to 2017-18. The expenses which
are spent to run the BMTC buses are getting increased year by year so the
average expenditure is quietly increasing year by year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 83

A Study on Operating Cost at BMTC

TABLE 5.10:
THE OPERATIONAL COVERAGE BY BMTC BUSSES

YEAR GROSS KM EFFECTIVE DEAD KM

KM
2013-14 4854.19 4544.68 309.51

2014-15 4832.65 4633.49 199.16

2015-16 4814.63 4638.39 176.24

2016-17 5000.67 4795.90 204.77

2017-18 4902.74 4708.56 194.18

source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :
The above table shows the details of operational coverage. The gross
operational coverage during the year 2013-14, 2014-15, 2015-16, 2016-17,
2017-18 were 4854.19, 4832.65, 4814.63, 5000.67, 4902.74 respectively. The
effective operational coverage during the year, 2013-14, 2014-15, 2015-16,
2016-17, 2017-18 were 4544.68, 4633.49, 4638.39, 4795.90, 4708.56
respectively. The dead operational coverage during the year, 2013-14, 2014-15,
2015-16, 2016-17, 2017-18 were, 309.51, 199.16, 176.24, 204.77, 194.18,
kilometer in lakhs respectively.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 84

A Study on Operating Cost at BMTC

GRAPH 5.9
THE OPERATIONAL COVERAGE OF BMTC BUSES

6000

5000

4000

GROSS KM
3000
EFFECTIVE KM
DEAD KM
2000

1000

0
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.10

Inference :
the above graph shows the details of operational coverage. The gross kms
operated shows an decrease from 2013-14 to 2014-15 and 2014-15 to 2015-16
and again it has decreased its gross kms in the year 2016-17 it has increased to
5000.67 and again in the year 2017-18 it has decreased to 4902.74 respectively.
The effective kms operated shows an increased performance consistently from
five years i.e.,. 88.81, 4.9, 157.52 and again it has decreased to 87.34 kms
respectively. The dead kms operated shows an increase decrease performance
every year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 85

A Study on Operating Cost at BMTC

TABLE 5.11:
THE RATE OF BREAK DOWNS PER 10000 KMS OF BMATC BUSES

Year Rate of break downs per 10,000

kms
2013-14 0.04

2014-15 0.05

2015-16 0.08

2016-17 0.07

2017-18 0.06

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation
The above table shows the details of rate of break downs per 10,000 kms of
BMTC buses. The overall rate of break down during the year 2013-14, 2014-
15, 2015-16, 2016-17 were 0.04, 0.05, 0.08, 0.07, 0.06 during the year 2016-17
it has decreased to 0.01 and in the year 2017-18 it has again decreased to 0.01.
it is due to frequent services and maintenance of the buses.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 86

 A Study on Operating Cost at BMTC

GRAPH 5.10:
THE RATE OF BREAK DOWNS PER 10000 KMS BMTC BUSES

0.09

0.08

0.07

0.06

0.05

0.04 0.08

0.03

0.02

0.01

0
2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.11

Inference :
The above graph shows the rate of break downs per 10,000 kms of BMTC buses.
It shows decreased performance in the year 2013-14 and 2014-15 of 0.04 and
0.05 and again there is drastic increase in the year 2015-16 of 0.08 and again
the corporation has maintained the rate of break down to 0.07 in 2016-17 again
in the year 2017-18 it has decreased to 0.06 i.e it has decreased to 0.01%
respectively.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 87

A Study on Operating Cost at BMTC

TABLE 5.12:
THE PROFIT (Paise per kms) of BMTC BUSES

Year Profit (paise per km) Percentage changes

Over previous year

2013-14 109.9 0

2014-15 46.0 -58.14

2015-16 -378.98 593.43

2016-17 -286.76 -10.10

2017-18 -137.84 -51.93

Source : BMTC ANNUAL REPORTS & AUDIT REPORT

Interpretation :
The above table showing the profit ( paise per km) during the year 2013-14 to
2017-18. It is fluctuating over a period during 2013-14 and 2014-15 it has
increased its profits but whereas in the past three years it has been decreased to
negative impact in the year 2017-18 in the year -137.84 and % -51.93.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 88

A Study on Operating Cost at BMTC

GRAPH 5.11:
THE PROFIT (Paise per km) OF BMTC BUSES

100%

80%

60%
109.9 46
40%

20%

0%
2013-14 2014-15 2015-16 2016-17 2017-18
-20%

-40%
-378.98 -286.76 -137.84
-60%

-80%

-100%

Sources : Table No 5.12

Inference :
the above graph referred that there is an increase and decrease trend in the profit
( paise per km) of BMTC from 2013-14 to 2017-18. So there is no constant
profit for BMTC there is an decrease and increase in the profits of BMTC.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 89

A Study on Operating Cost at BMTC

TABLE 5.13:
THE PERCENTAGE FLEET UTILIZATION OF BMTC BUSES

Year Percentage fleet Percentage changes

Utilization Over previous year

2013-14 92.3 0

2014-15 92.9 0.65

2015-16 90.8 -2.26

2016-17 91.2 0.44

2017-18 90.5 -0.76

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :
The above table showing the percentage fleet utilization during 2013-14 to
2017-18. During 2014-15 percentage fleet utilization has been decreased by
1.6% and again it has increased by 2.21% in 2016-17 however in the 2014-15 it
was again increased by 0.65 and 2016-17 the percentage fleet utilization was
decreased by 0.32%.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 90

A Study on Operating Cost at BMTC

GRAPH 5.12:
THE PERCENTAGE FLEET UTILIZATION OF BMTC BUSES

Chart Title
93.5

93

92.5

92

91.5

91

90.5

90

89.5

89
2013-14 2014-15 2015-16 2016-17 2017-18

%age fleet utilization

Sources : Table No 5.13

Inference :
The above graph referred that there is an increase and decrease trend in the
percentage fleet utilization from 2013-14 to 2017-18 finally it has decreased its
percentage fleet utilization. This for the first time we have an decreasing in the
fleet of utilization in BMTC the percentage of bus utilization is be seen
decreasing year by year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 91

A Study on Operating Cost at BMTC

TABLE 5.14:
THE TYRES COST PER KM IN PAISE OF BMTC

Year Tyres cost per km in paise

2013-14 60.67

2014-15 80.42

2015-16 79.46

2016-17 73.29

2017-18 66.61

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :
The above table shows the details of tires cost per km of BMTC for the year
2013-14, 2014-15, 2015-16, 2016-17, 2017-18 has been 60.67, 80.42, 79.46,
73.29, 66.61 respectively. The number of tyres used is been seen in the above
table.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 92

A Study on Operating Cost at BMTC

GRAPH 5.13:
THE TYRE COST PER KILOMETERES OF BMTC BUSES

Sales

66.61 60.67

73.29 80.42

79.46

2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.14

Inference :
The above graph referred that there is an increase decrease trend in the tyres
cost per km in BMTC from 2013-14 to 2017-18. There is an gradual increase
and has well as decrease in the tyres cost per km so there is no constant.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 93

A Study on Operating Cost at BMTC

TABLE 5.15:
THE AVERAGE NO.OF ACCIDENTS per lakh km

Year Average no. of accidents per lakh

km

2013-14 0.11

2014-15 0.10

2015-16 0.08

2016-17 0.07

2017-18 0.08

Source : TABLE NO 5.14

Interpretation :
The above table shows details of average no. of accidents per lakh km. it has
decreased in the year 2014-15 compared to 2013-14 of 0.01 and in the year
2015-16 it has again decreased its accidents and in the past three years it has
been carefully handling with accidents it is avoiding accidents but
comparatively in the year 2017-18 it has increased the average of accidents to
0.01 it ranges from 0.11, 0.10, 0.08, 0.07, 0.08 in past five years.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 94

A Study on Operating Cost at BMTC

GRAPH 5.14:
THE AVERAGE NO.OF ACCIDENTS per lakh km

Sales

0.08 0.11

0.07

0.1
0.08

2013-14 2014-15 2015-16 2016-17 2017-18

Sources : Table No 5.15

Interpretation :
the above graph referred that there is a decrease tend in the no. of accidents per
lakh km in BMTC from 2013-14 to 2017-18. There are various measures taken
to decrease the no of accidents which is happening by the BMTC buses. So all
the measures which have taken are very useful to reduce the of accidents per
lakh km by BMTC buses.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 95

A Study on Operating Cost at BMTC

TABLE 5.16:
THE FUEL CONSUMPTION (KMPL)

Year (a) Actual (b) Normal

2013-14 4.01 4.02

2014-15 3.97 4.02

2015-16 3.84 3.89

2016-17 3.82 3.84

2017-18 3.79 3.84

Source : BMTC ANNUAL ACCOUNTS & AUDIT REPORT

Interpretation :
the above table shows details of fuel consumption (KMPL) (a) actual it has
decreasing from the year 2013-14, 2014-15, 2015-16, 2016-17, 2017-18. It
ranges from 4.01, 3.97, 3.84, 3.82, 3.79 respectively and (b) normal also has
kept constant range from 2013-14 to 2017-18 it ranges from 4.02, 4.02, 3.89,
3.84, 3.84 it is constant in the year 2016-17, 2017-18 that is 3.84.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 96

A Study on Operating Cost at BMTC

GRAPH 5.15:
THE FUEL CONSUMPTION (KMPL)

Chart Title

2017-18 3.84

2016-17 3.84

2015-16 3.89

2014-15 4.02

2013-14 4.02

3.65 3.7 3.75 3.8 3.85 3.9 3.95 4 4.05

Normal Actual

Sources : Table No 5.16

Inference :
The above graph referred that there is a decrease in fuel consumption KMPL
BOT (A) actual and (b) normal in BMTC from 2013-14 to 2017-18. Saving fuel
is our responsibility and even the BMTC is trying to save as much has fuel they
can and its been working and consumption is decreasing year by year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 97

A Study on Operating Cost at BMTC

CHAPTER -6
SUMMARY OF FINDINGS, SUGGESTIONS & CONCLUSIONS

The study of Operating Cost with respect of BMTC has been carried with the
objective of minimizing the cost of rendering services. The required data has
been taken from the concerned authorities of BMTC. The study reveals the
following findings.

FINDINGS:-

 The Corporation is increasing its operational efficiency every year and

thereby it is providing quality services to its commuters.

 Average effective km operated during the year it is 4708.56 lakh

effective kms and in the year 2016-17 it is 4795.90 lakhs. There is a
slight decrease in effective km operated during the year.

 Rate of break downs per 10000 km during the year 2017-18 the rate of
break downs is 0.06 and in the year 2016-17it is 0.07. There is a slight
decrease in rate of break downs per 10000 km during the year and the
tyre cost per km has decreased to 73.29 per paise in 2016-17 to 66.61
paisa in 2017-18.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 98

A Study on Operating Cost at BMTC

 The performance of the Corporation on the service front as compared to

previous year is stagnated as against 97.08 crore kms performed on the
year 2013-14 it performed 96.29 crore kms in the year under review.
The decrease is 0.81%.

 There was increase of 4.09% in augmentation of new schedules as

compared to the year 2013-14. The corporation operated 6389 schedules
during 2017-18. Increase in number of vehicles from 6431 to 6863
during 2013-14 to 2017-158, respectively.

 During 2018 the corporation held BMTC owned 6863 passenger buses.
During the year under report 312 vehicles were scrapped, 20 vehicles
were sold to educational and other institutions and removed from the
fleet. During the year under report 600 vehicles were added to the fleet,
compromising of 470 tata, 50 leyland, 15 corona and 65 volvo buses.
The corporation also held 161 domestic vehicles such as Cars, Vans,
Jeeps, Trucks and Cranes etc., at the end of the year.

 BMTC is committed to comply with statutory and regulatory

requirement with regards to Environment.

 The total cost of operation works out Rs.2211.91 crores as against

Rs.2066.41 crores over the period year recording a growth of 7.04%.
This is due to increase in staff cost, HSD & other cost. The CPDs
registered an increase to the extent of 7.41%.

 The dead kilometers by BMTC buses are 2016-17 to 204.77 recorded

during 2017-18. There has been a decrease in the dead kms to 194.18
recorded during the year under report as compared to the previous year
percentage of 10.54

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 99

A Study on Operating Cost at BMTC

 The gross fixed assets as at 31st march 2017 was Rs228,56723 lakhs as
compared to Rs.2,31,797.55 lakhs in the previous year.

 Rate of Accidents per lakh kilometers The Corporation has recorded a

rate of accidents per lakh kms of 0.08 during the year 2017-18 compared
to 0.07 recorded during 2016-17.

 KMPL (Diesel): The performance in KMPL has been recorded at 3.82

during the year under report as against 3.84 during the previous year.
There is reduction in KMPL due to induction of Volvo and BS-4
vehicles.

 Two new depots, Depot-40 at Dasanapura, and Depot-41 at Gunjur,

were commissioned during the year under report, thus increasing the
number of Depots to 39.

 The rate of gross carning per effective kilometer during the year 2017-
18 is Rs. 4793.7 paise. The EPKM realized from traffic revenue for
2017-18 is 4235.08 paise compared to 3681.42 paise in 2016-17.

 With the increased cost of operations, the Corporation recorded a loss of

Rs. 6490.37 lakh it was decreased from the previous year 14758.92 lakh
it is range from 8268.55 lakh.

 The total expenditure during the year 2017-18 was Rs. 180841.03 lakhs
as against Rs.148 169.69 lakhs during 2016-17and The year review saw
an increase of 19.92% to record total Operating Cost of Rs.1279.00
crores as against Rs. Crores over the previous year 1066.58.

 The average vehicle utilization performed by the vehicles of the

corporation during the year under report is recorded at 221.10 kms per
vehicle per day as against the achievement of 223.50kms. Recorded
during the year 2016-17. There is a reduction of vehicle utilization by
2.4kms per vehicle per day over the previous year.

 The year saw an decrease of 85.17% to record total operating cost of

Rs.32763.74 crore as against Rs.39595.78 crore for the previous year.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 100

A Study on Operating Cost at BMTC

SUGGESTIONS:-

 The operating cost has been decreased in BMTC due to constant

maintenance of Volvo buses. So in order to maintain the same
consistency of reduction in operating cost BMTC has to avoid VOLVO
buses because already there are more than 500 Volvo buses in
Bangalore.

 The BMTC is increasing its fare price and general public cannot offered
the price of BMTC especially Volvo and hence the government has to
decrease and make reasonable fare price frequently. The government has
to make a reasonable fare so that general public can effectively utilize
the services provided by the BMTC.

 The line checking of the BMTC buses has to be made frequently. So that
the profit of BMTC may increase year by year.

 Proper maintenance of the BMTC buses should be made so that

frequently. So that it may reduce breakdowns repairs etc.,

 Unnecessary fleets of the buses in the routes which is not necessary or

the trips wherein there is no commuters must be avoided. So that fuel
costs can be reduced and more buses can be utilized where the
requisition of buses is required in peak hours.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 101

A Study on Operating Cost at BMTC

 After analysis it is suggested that to maintain or control the labor force

so we can avoid the staff's cost at minimum.

 After making analysis it is suggested to control the fixed over heads as

much as possible.

 After making analysis it is control that no. of buses using for the
passengers Transportation.

 BMTC should take measures by training and instructing its drivers

appropriately to maintaining moderate speed, to keep up buses
conditions and reduce accidents.

 BMTC provide comfortable travelling and maintain punctuality to

enhance the better commuters satisfaction by providing this, it helps to
increase the profit.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 102

A Study on Operating Cost at BMTC

CONCLUSION:-

Bangalore Metropolitan Transport Corporation (BMTC) was formed as an

independent corporation with effect from 15/8/1997 after bifurcation from
Karnataka State Road transport Corporation (KSRTC), yet another year of land
mark in the history of our Corporation has been completed successfully.

The Corporation has been adopted a well-structured constructive management

policy and maintained the tradition of extending safe, affordable and commuter-
friendly services. The principles of operational efficiency and technical
excellence guide every aspect of our work. The focus on safety, reliability and
efficiency as demonstration in the earlier year as continued during this year also.

The Corporation has taken all steps to control cost in order to protect the interest
of the public, but has to concentrate on some of the aspects such as increase in
vehicle and fleet utilization reduce cost per kilometer, when compared to
previous years, bus stand upkeep and cleanliness and improvement, vehicle
upkeep late arrived and late departure.

BMTC is an government organization which is formed for the purpose of

helping the public through providing transport facilities with less price public is
utilizing the bus services and its very helpful to all. There are various types of
buses introduced in BMTC.

Many number of workers are working in BMTC they are trying very hard to
provide the best facilities they can. So that the public will be satisfied by the
facilities provide by the BMTC.

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 103

A Study on Operating Cost at BMTC

BIBLIOGRAPHY

1: TEXT BOOKS REFERED:

TEXT BOOKS AUTHOR PUBLICATION EDITION

Cost & S.P Jain & Kalyani 14th edition,

Management K.L Narang Publication 2017
Accounting

Cost & Philip Kotler Himalaya 13th edition

management publication 2017
Accounting
cost & Ravi M Kishore Taxmann 5th edition
management Publication 2017
accounting

Cost M.N Arora Vikas 11th edition

Accounting Publishing 2018
Principles and
Practice

2. BMTC-Annual Accounts and Audit Report from 2013-14 to 2017-18

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 104

A Study on Operating Cost at BMTC

4. WEBSITES:
 www.bmtcinfo.com
 www.bmtccareers.com
 www.google.com
 www.mybmtc.com

3 : JOURNALSMAGZINES/BOOKS

1. Mohammed Quddus (10 April 2007) "Metro Station Operating Costs an

Econometric Analysis": Evidence from Bangladesh" from BUSINESS
JOURNAL, Vol 5, 10 april 2007

2. Megan Smriti Mark Ryerson (8 June 2008) Capturing the Impact of

Fuel Price on Jet Aircraft Operating Costs with Engineering and
Econometric Models", cost and management book. Pgno 45-56.

3. F.Gomez, D.Scholz (14th February 2009) Improvements to Ground

INTERNATIONAL JOURNAL OF OPERATING COST" VOL10

4. B Gary Barnes, Peter Langworthy (17th January 2003): "The Per-

Handling Operations and Their to Direct Operating Costs",
mile Costs of Operating Automobiles and Trucks MAGAZINE FROM
INTERNATIONAL JOURNAL ACADEMY ,PG NO. 182-191

5. Daniels. C (5th October 1974) Vehicle operating costs in transport

studies: With special reference to Economist Intelligence Unit, London
PG NO.350-400

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 105

A Study on Operating Cost at BMTC

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 106

A Study on Operating Cost at BMTC

6. F. Robusté, A. López-Pita & M. Capdet( 25th april1996)

mprovements to Ground Handling Operations and Their to Direct
Operating Costs", BOOK FOR OPERATING COST, PG NO. 123-127

7. Mike Antich 2015: "Flat Fuel Prices Forecast to Extend Through 2016"
ECONOMIC TIMES NEWS PAPER, PG NO.15-39.

8. Mustafa Domenza 2000"A PARAMETRIC COST MODEL FOR

ESTIMATING OPERATING AND SUPPORT COSTS OF U.S. NAVY
AIRCRAFT" (2010) A Model to Estimate the Operating and
Maintenance (O&M) Costs of the Mine Resistant Ambush Protected
(MRAP) Vehicles. PG NO.103-114.
9. Maryam Hashami (2004) Operating Costs for Commercial Vehicle
Operators in Minnesota, JOURNAL OF MINNESOTA ECONOMIC
TIMES PG NO.504-505

NEWS PAPERS:
ECONOMIC TIMES
AMERICAN BUSINESS JOURNAL
INTERNATIONAL COST DEVELOPMENT JOURNAL

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 107

A Study on Operating Cost at BMTC

ANNEXTURE
OPERATIONAL PERFORMANCE OF BMTC 2015-16 TO 2017-18
SL.NO PARTICULARS 2015-16 2016-17 2017-18
1 Average No. of vehicle held (own 5680.7 6074.50 6069.00
buses)
2 Average No. of vehicle on road (own 5322.90 5605.00 5636.20
buses)
3 Fleet utilization(%age) 93.70 92.30 92.90
4 Route kms. At the end of the year 55233.70 54490.00 57625.00
5 No. of operating depots 33 35 37
6 Kms. Covered in lakhs
(a) gross kms- (own buses) 4651.76 4854.19 4832.65
(b) effective kms-(own buses) 4383.16 4544.68 4633.49
(c) dead kms 268.60 309.51 199.16
(d) %age of dead kms. to gross 5.80 6.38 4.12
km 4.60 5.73 1.90
(e) Norms
7 225.60 222.10 224.60
Average kms. Covered per bus per
8 day-own buses 2561.90 2902.40 3228.80
Average revenue earned ( paise per
9 km) 2414.40 2792.40 3182.80
10 Average expenditure (paise per km) 147.40 109.90 46.00
Profit/loss (paise per km)
11 0.12 0.11 0.10
12 Average No. of accidents per lakh
kms 0.05 0.04 0.05
13 Average No. brake downs per
10000kms 6.40 5.63 4.70
14 Amount of compensation paid to
accident victims (Rs in crore) 2914.27 3030.07 3128.8
Passenger kms. Schedule (in crore) 2871.41 2981.71 3044.51
(a) On schedule kms.
15 (b) On effective kms. 1797.50 1982.84 2173.78
(including pvt buses)
16 Passenger kms. Operated (in crore) 62.60 66.50 71.40
on occupancy ratio
17 Occupancy ratio (load factor) in % 64.00 68.60 74.30

18 Break even occupancy ratio

4.11 4.01 3.97
Fuel consumption (KMPL) 4.16 4.02 4.02
19 (a) actual 130.13 190.26 220.74
(b) normal
20 repairs and maintenance per km. (in
paise)
Tyres cost per km in paise 31.14 60.67 80.8

(a) New
(b) Retreated

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 108

A Study on Operating Cost at BMTC

C. operational performance:
The operational performance of the corporation for 3yrs up to 31st march 2018
is given below
SL.NO PARTICULARS 2015-16 2016-17 2017-18
1 Average no. of vehicle held (own 6318.40 6602.50 6648.9
buses)
2 5735.60 6022.00 6014.2
Average No. of vehicle on road (own
buses) 90.80 91.20 90.5
3 Fleet utilization (%age)
57081.60 65915.90 55311.90
4 Routes kms at the end of the year 39 39 39
5 No. of operating depots
6 Kms. Covered in lakhs 4805.43 5000.67 4902.74
(a) gross kms (own buses) 4638.38 4795.90 4708.56
(b) effective kms (own buses) 176.24 204.77 194.18
(c) Dead kms 3.67 4.09 3.96
(d) %age of Dead kms to gross. 3.10 2.64 3.65
Km 221.10 218.20 214.5
7 (e) Norms
Average kms covered per bus per day- 3579.82 4199.30 4793.07
8 own buses 3898.80 4486.06 4930.91
9 Average revenue earned (paise per km) -318.98 -286.76 -137.84
10 Average expenditure (paise per km) 0.08 0.07 0.06
11 Profit/loss (paise per km) 0.08 0.07 0.08
12 Average No. of break downs per 2.73 6.31 11.28
13 10000kms
Average No. of accidents per lakh km.
14 Amount of compensation paid to 3197.15 3225.13 3169.68
accident victims (Rs. In crore) 3038.14 3083.76 2924.54
Passenger kms. Scheduled (in crore) 1989.98 2072.29 2172.54
15 (a) on scheduled kms.
(b) On effective kms (incl pvt 68.50 67.20 74.3
16 buses) 79.13 74.90 86.5
17 Passenger kms. Operated (in crore) on
18 occupancy ratio 3.84 3.82 3.79
Occupancy ration (load factor) in% 3.89 3.84 3.84
Break eve occupancy ratio 280.54 271.59 278.33
19 Fuel consumption (KMPL)
20 (a) actual 79.62 73.29 66.61
(b) normal
Repairs and maintenance per km. (in
paise)
Tyres cost per km in paise
(a) New
(b) Retreated

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 109

A Study on Operating Cost at BMTC

BANGALOREMETROPOLITAN TRANSPORT CORPORATION PROFIT AND

LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2018

Year Per Particulars Rs. In Year 2017- Per

2016-17 vehicle lakhs 18 Rs. In vehicle
(Rs. In (km in lakhs (km in
lakhs) paise) paise)
‘A’ To operating Expenses :
A. TRAFFIC
a) Employee cost
351.68 7.58 1.Salaries and 297.59 6.21
allowances- officers
4705.99 101.46 2.Salaries and allowance- 5606.26 116.90
staff
48326.34 1041.88 3.Salaries and allowance 57358.45 1195.99
-drivers & conductors
24.82 0.54 4.Travel Expenses 25.85 0.54
853.99 18.41 5.Medical charges 678.05 14.14
3404.09 73.39 6.overtime 3706 77328
57666.91 1243.26 Total employee cost 67672.29 1411.04
(a)
b)other costs
93.98 2.03 1.Tickets 301.75 6.29
0.00 0 2.Tools equipment 0.00 0.00
0.00 0 3.Fines under MV Act 0.00 0.00
404.14 8.71 4.Cleaning and sweeping 379.64 7.92
charges
749.78 16.16 5.Miscellaneous 207.56 4.33
operating expenses
1247.9 26.9 Total 888.95 18.54
c)Hired vehicle charges 0.00 0.00
B.REPAIRS AND
MAINTANENCE
6967.33 150.51 1.Salaries and allowance 8013.89 167.10
of maintenance
Staff/officers
9798.43 211.67 2.Material consumption 9460.53 197.26
4.90 0.11 3.Water and electricity 0.00 0.00
charges
6.37 0.14 4.Freight (other than 7.06 0.15
fuel)
1849.85 39.96 5.Repair by outside 2095.44 43.69
agencies
(Reconditioning)
451.89 9.76 6.Other charges 538.12 11.22
19078.77 412.14 Total 20115.04 419.42
61607.8 1330.85 C.FUEL, OIL AND 76393.40 1592.89
LUBRICANTS
8453.85 182.26 D.TAXES ON 9835.82 205.09
PASSENGER
VEHICLES
9200.8 198.36 E.WELFARE 12992.14 270.90
EXPENSES
F.ADMINISTRATIVE
EXPENSES
1964.67 42.36 1.Salaries and allowance 7962.47 40.92
of administration staff/

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 110

A Study on Operating Cost at BMTC

Officers
78.35 1.69 2.Accident compensation 174.05 3.63
5.63 0.12 3.Afforestation Expenses 13.24 0.28
20.91 0.45 4.Allowance to Board & 17.22 0.36
Committee members
84.48 1.82 5.Communications 0.37
Expenses 17.55
127.50 2.75 6.Consulation Expenses 359.19 7.49
437.95 9.46 7.Maintenance of 454.73 9.48
Department vehicles
249.33 5.38 8.Printing & stationery 93.78 1.96
355.83 7.69 9.Rent, Rates and Taxes 516.55 10.77
1080.70 23.3 10.General Office 1456.75 30.37
Expenses
1859.10 40.16 11.Repair & 1208.6 25.20
Maintenance to Fixed
Assets
135.17 Total administrative 6274.19 130.82
Expenses
243.4 G.DEPRECIATION OF 12469.24 260.00
VEHICLES
6264.45 3773.93 Total operating expenses 206641.07 4308.70
11267.65 0 To operating profit c/d
175049.07 3773.93 Total 206641.07 4308.70
‘B’
23448.99 To operating loss b/d 30083.71 627.28
505.54 TO NON-OPERATING
EXPENSES
1474.37 31.81 1.Depreciation of other 1913.73 39.90
assets
Less: Amount capitalized
in RWS

3274.67 70.74 2.Financial costs 6148.92 128.21

Less :amount capitalized
in RSW
0.00 0.00 3.Provisions 0.00 0.00
4.Contribution towards
various Funds
768.10 16.59 i)Property Insurance 818.78 17.07
Fund
273.41 5.89 ii)third Party Risk 630.63 13.15
Insurance Fund
0.00 0.00 iii)Provision for Bad & 0.00 0.00
doubtful debts
0.00 0.00 iv) provisions towards 0.00
sports and cultural
Activities
5790.55 125.08 Total non-operating 9512.07 198.34
expenses
1.41 0.03 Net prior period expenses 0.00 0.00
(schedule-IX)
To profit for the year 0.00
carried forward to net
0 0 Revenue Appropriation
27240.87 Total 39595.78

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 111

A Study on Operating Cost at BMTC

BANGALORE METROPOLITAN TRANSPORT CORPORATION

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2017

Year Per Particulars Rs. In Year Per

2015-16 vehicle lakhs 2016-17 vehicle
(KM in Rs. In (KM in
paise) lakhs paise)
To operating Expenses
A. TRAFFIC
a) Employee cost
235.71 5.06 1. Salaries and 351.68 7.58
allowance -_ officers
3816.66 81.99 2. Salaries and 4705.99 101.46
allowance – staff
35658.4 765.99 3. Salaries and 48326.34 1041.88
allowance – Drivers
& Conductors
22.44 0.48 4. Travel expenses 24.82 0.54
497.72 10.69 5. Medical charges 853.99 18.41
2751.18 59.1 6. Overtime 3404.09 73.39
42982.11 923.31 Total employee cost (a) 57666.91 1243.26
b) Other costs
2.43 2.43 1. Tickets 93.98 2.03
0 0 2. Tools equipment 0 0
0 0 3. Fines under MV act 0 0
6.59 6.59 4. Cleaning and 404.14 8.71
sweeping charges
3.8 3.8 5. Miscellaneous 749.78 16.16
operating expenses
12.82 12.82 Total 1247.9 26.9
413.68 1904.6 c) Hired vehicle charges
B. REPAIRS AND
MAINTENANCE
5360.43 115.15 1. Salaries and 6967.33 150.51
allowance of
maintenance
Staff/officers
7644.39 164.98 2. Material 9798.43 211.67
Consumption
23.32 0.5 3. Water and Electricity 4.9 0.11
Charges
5.87 0.13 4. Freight (other than 6.37 0.14
fuel)
1765.18 38.1 5. Repair by outside 1849.85 39.96
agencies
(Reconditioning)
140.21 3.03 6. Other charges 451.89 9.76
14939.41 321.88 Total 19078.77 412.14
54381.07 1173.66 C. FUEL, OIL AND 61607.8 1330.85
LUBRICANTS
7735.13 166.16 D. TAXES ON 8453.85 182.26
PASSENGER
VEHICLES
8815.47 189.37 E. WELFARE 9200.8 198.36
EXPENSES

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 112

A Study on Operating Cost at BMTC

F. ADMINISTRATIVE
EXPENSES
1197.36 25.72 1. Salaries and 1964.67 42.36
allowances of
administration
staff/

Officers
45.65 0.98 2.Accident compensation 78.35 1.69
1.8 0.04 3.Afforestation expenses 5.63 0.12
0.68 0.01 4.Allowances to board & 20.91 0.45
committee members
3.48 0.07 5.Communication expenses 84.48 1.82
92.4 1.98 6.Consulation expenses 127.5 2.75
523.36 11.3 7.Maintaenance of department 437.95 9.46
vehicles
42.25 0.91 8.Printing & stationery 249.33 5.38
901.48 19.46 9.Rent rates taxes 355.83 7.69
628.53 13.5 10.general office expenses 1080.7 23.3
788.88 17.03 11.Repair and maintenance to 1859.1 40.16
fixed assets
4225.87 91 Total administrative expenses 6264.45 135.17
10995.16 237.3 A. DEPERECATION 11267.65 243.4
OF VEHICLES
145084.58 3116.61 Total operating expenses 175049.97 3773.93
0 0 To operating profit c/d 0 0
145084.58 3116.61 Total 175049.97 3773.93
“B”
6459.97 138.77 To operating loss b/d 23448.91 505.54
TO NON-OPERATING
EXPENSES
941.79 20.33 1.Deprecation of other assets 1474.37 31.85
Less: amount capitalized in
RWS
1229.66 26.54 2.financial costs 3274.67 70.74
Less: amount capitalized in
RWS
0.12 0 3.Provisisons 0 0
4.Contribution towards
various funds
439.67 9.49 i)Property insurance fund 768.1 16.59
470.29 10.1 ii)Third party risk insurance 273.41 5.89
fund
0 0 iii)Provision for bad and 0 0
doubtful debts
0 0 iv)Provisions towards sports 0 0
and cultural activities
3081.53 66.46 TOTAL NON- 5790.55 125.08
OPERATING EXPENSES
0 0 Net prior period 1.41 0.03
expenses(schedule-IX)
To profit for the year carried
forward to net
2141.54 46 Revenue apportion account 0 0
11683.04 Total 29240.87

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 113

A Study on Operating Cost at BMTC

INCOME

Year Per Particulars Rs. In Year Per

2015-16 vehicle lakhs 2016-17 vehicle
(KM in Rs. In (KM in
paise) lakhs paise)
‘A’
BY OPEARTING
REVENUE :
TRAFFIC REVENUE :
128524.71 2760.88 1.Traffic revenue from 141520.3 3051.07
sale of tickets
24.06 0.52 2.Passengers luggage- 30.66 0.66
revenue
5799 124.57 3.Revenue-contract 5067.03 120.88
services
4149.4 89.13 4.Revenue-travel 5067.03 93.66
concession
127.43 2.74 5.Fines collected from 4344.59 2.11
passengers
0 0 6.Postal mail services 97.68 0
138624.61 2977.84 Total operating revenue 151600.16 3268.39
6459.97 138.77 By operating loss c/d 23448.91 505.54
145084.58 3116.61 Total 175049.07 3773.93
“B”
0 0 By operating profit b/d 0
BY NON-OPERATING
REVENUE
NON-TRAFFIC
REVENUE
4841.43 104 1.Miscellaneous income 5698.38 122.85
6410.19 137.7 2.Income from subsidies 8747.04 188.58
11251.62 241.7 Total 14445.42 311.43
11251.62 241.7 Total non-operating
revenue
431.42 9.27 Net prior period income 14445.42 311.43
By loss for the year
carried forward to
Net revenue 14795.45 318.98
appropriation account
11683.04 Total 29240.87

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 114

A Study on Operating Cost at BMTC

BANGALORE METROPOLITAN TRANSPORT CORPORATION

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2016

Year Per Particulars Rs. In Year Per

2013-14 vehicle lakhs 2014-15 vehicle
(KM in Rs. In (KM in
paise) lakhs paise)
‘A’ To operating Expenses :
B. TRAFFIC
b) Employee cost
184.32 4.02 1.Salaries and allowances- 235.71 5.06
officers
3287.92 71.79 2.Salaries and allowance- 3816.66 81.99
staff
29146.86 3.Salaries and allowance - 35658.4 765.99
drivers & conductors
14.76 0.32 4.Travel Expenses 22.44 0.48
472.82 10.32 5.Medical charges 497.72 10.69
2139.60 46.71 6.overtime 2751.18 59.1
35246.28 769.54 Total employee cost 42982.11 923.31
(a)
b)other costs
132.29 2.89 1.Tickets 112.43 2.43
0.00 0.00 2.Tools equipment 0.00 0.00
0.00 0.00 3.Fines under MV Act 0.00 0.00
0.00 0.00 4.Cleaning and sweeping 306.82 6.59
charges
59..53 1.30 5.Miscellaneous operating 176.93 3.80
expenses
191.82 4.19 Total 596.68 12.82
666.21 1857.59 c)Hired vehicle charges 413.68 1904.6
B.REPAIRS AND
MAINTANENCE
4532.25 98.95 1.Salaries and allowance of 5360.43 115.15
maintenance
Staff/officers
5000.40 109.71 2.Material consumption 7644.39 164.95
4.87 0.11 3.Water and electricity 23.32 0.5
charges
3.32 0.07 4.Freight (other than fuel) 5.87 0.13
3046.91 56.52 5.Repair by outside agencies 1765.18 38.1
(Reconditioning)
171.38 3.74 6.Other charges 140.21 3.03
12579.13 278.57 Total 14939.41 321.88
50182.50 1095.64 C.FUEL, OIL AND 54381.07 1173.66
LUBRICANTS
6701.31 146.51 D.TAXES ON PASSENGER 7735.13 166.16
VEHICLES
5839.57 127.50 E.WELFARE EXPENSES 8815.47 189.37
F.ADMINISTRATIVE
EXPENSES
865.43 18.90 1.Salaries and allowance of 1197.36 25.72
administration staff/
Officers

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 115

A Study on Operating Cost at BMTC

2.56 0.00 2.Accident compensation 45.65 0.98

1.17 0.00 3.Afforestation Expenses 1.8 0.04
0.35 0.00 4.Allowance to Board & 0.68 0.01
Committee members
53.56 1.17 5.Communications Expenses 3.48 0.07
67.91 1.48 6.Consulation Expenses 92.40 1.98
423.03 9.24 7.Maintenance of 523.36 11.3
Department vehicles
249.62 5.45 8.Printing & stationery 42.25 0.91
130.40 2.85 9.Rent, Rates and Taxes 901.48 19.46
829.69 18.11 10.General Office Expenses 628.53 13.5
28.63 0.62 11.Repair & Maintenance to 788.88 17.03
Fixed Assets
2651.93 57.82 Total administrative 4225.87 91
Expenses
971661 236.67 G.DEPRECIATION OF 10995.16 237.3
VEHICLES
125003.83 2729.22 Total operating expenses 145084.58 3116.61
0.00 0.00 To operating profit c/d 0 0
Total 145084.58 3116.61
‘B’
3880.31 84.72 To operating loss b/d 6459.97 138.77
TO NON-OPERATING
EXPENSES
750.60 1.Depreciation of other assets 941.79 20.33
Less: Amount capitalized in
RWS

969.86 2.Financial costs 1229.666 26.54

Less :amount capitalized in
RSW
0.04 3.Provisions 0.12 0.00
4.Contribution towards
various Funds
384.70 8.46 i)Property Insurance Fund 439.67 9.49
563.41 12.30 ii)third Party Risk Insurance 470.29 10.1
Fund
0.00 0.00 iii)Provision for Bad & 0.00 0.00
doubtful debts
0.00 0.00 iv) provisions towards sports 0.00 0.00
and cultural Activities
2667.60 58.60 Total non-operating 3081.53 66.46
expenses
48.38 1.06 Net prior period expenses 0 0
(schedule-IX)
5034.99 109.93 To profit for the year carried
forward to net
Revenue Appropriation 2141.54 46
11631.27 Total 11683.04

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 116

 A Study on Operating Cost at BMTC

INCOME

Year Per Particulars Rs. In lakhs Year 2014- Per vehicle

2013-14 vehicle 15 Rs. In (KM in
(KM in lakhs paise)
paise)
‘A’
BY OPEARTING
REVENUE :
TRAFFIC REVENUE :
112272.8 2451.26 1.Traffic revenue from sale of 128524.71 2760.88
tickets
19.41 0.42 2.Passengers luggage-revenue 24.06 0.52
5258.89 114.82 3.Revenue-contract services 5799 124.57
3444.89 75.21 4.Revenue-travel concession 4149.4 89.13
127.46 2.78 5.Fines collected from 127.43 2.74
passengers
0.00 0.00 6.Postal mail services 0 0
121123.53 2644.50 Total operating revenue 138624.61 2977.84
3880.31 84.72 By operating loss c/d 6459.97 138.77
125003.83 2729.22 Total 145084.58 3116.61
“B”
By operating profit b/d
BY NON-OPERATING
REVENUE
NON-TRAFFIC REVENUE
5877.92 128.33 1.Miscellaneous income 4841.43 104
5753.35 125.61 2.Income from subsidies 6410.19 137.7
11631.27 253.95 Total 11251.62 241.7
11631.27 253.95 Total non-operating revenue 11251.62 241.7
0.00 0.00 Net prior period income 431.42 9.27
By loss for the year carried
forward to
Net revenue appropriation
account
11631.27 Total 11683.04

DAYANANDA SAGAR COLLEGE OF ARTS SCIENCE AND COMMERCE Page 117