C GOPALAKRISHNAN G RAGHURAM

Rajasthan State Road Transport Corporation

PREPARED BY: ADNAN ALI ARSHAD KHAN ADIL KHAN SAMAN NAAZ

RSRTC : An Overview
Established on 1st of October 1964 Objective was to provide reliable, adequate, and efficient

transportation service to the public

Headquarter at Jaipur. Primarily operates on the trunk routes

 A Senior IAS officer Belongs to Rajasthan State Cadre

Prior Conditions

Prolonged strikes deteriorated the conditions

Continuous decline in productivity Trust of the public had faded significantly

Urgent need of effective managerial intervention

Measures Applied By Kaurani

Transformed the organization from three-tiered to

two-tiered
Assigned crucial powers to Depot Manager
Introduced a profit linked incentive scheme

First 25 years
Years 1964-65 1968-69 1989-90

Fleet size No. of Depots Passengers transported(per day) Divisions Buses/division

421 -

536 10 43175

+3000 39 634227

1 536

8 393

Routes operated

81

1676

Contd
Gradual increase in fleet utilization, vehicle

utilization, km/ litre etc.

Load factor remained more or less constant Improvement in service figures

Profitable in initial years and incurred losses there

after

Change of chairman
In April 1991, Mr. Kaurani appointed as a new

chairman

Also headed the organization between 1981 1984 as

managing director

Determined to give overall boost to the corporation's

functioning productivity

Felt RSRTC having financial viability

Strike(sep-nov 1990)
Reason for the strike:
Demanding benefits up to Rs 5 Crore Wage structure higher than that of Government scale Managements discontent with the amendment Lasted for 72 days

Strike contd...
Impact of the strike:
Load factor increased

Corporation incurred the loss of Rs 1209.7 lakh

Fleet utilization decreased from 90 to 75 percent

Strike called off on november 30th:

PROBLEM ANALYSIS

Three-tiered organization structure

st 1
nd 2

tier
tier

CHAIRMAN MANAGING DIRECTOR DEPARTMENTAL CHIEF DIVISION CONTROLLER DEPUTY GENERAL MANAGER

3rd tier

ASSISTANT DIVISIONAL MANAGERS DEPOT MANAGERS

Two-tiered organization structure

CHAIRMAN MANAGING DIRECTOR DEPARTMENTAL CHIEF

1st

tier tier

nd 2

CHIEF MANAGERS (Traffic/Accounts/Operatio n workshop)

Problem of Redeployment
Restructuring of the organization Problem regarding the utilization of relieved manpower Existence of vacancies enabled easy redeployment Officers to opt for position of Chief manager or to join

Head office
Many of them opted for head office except few.

Responsibility vs Authority
Depot managers Division managers

Report to division manager

Report to chief manager

Administrative reporting

Functional reporting

Vested with entire operational responsibility Hardly had any disciplinary/financial power

No responsibility in operations

Vested with all disciplinary/financial power

Fare structure
Last fare fixed at an average of 13.65 paise/passenger

km on 3rd aug,1989 Substantial increase in input cost leading to corporations loss 30 percent increase in fares rose the fare level to 17.6 paise/passenger km Kauranis comment on fare hike: This fare hike was different in that it was granted with the presumption of earning Rs 7 crore profit during 1991-92. The past fare hikes generally covered only the cost increases and didnt lead to profits

Age Of Fleet
Buses (%) 45 32 17 Age of Fleet > 6 years > 10 years > 12 years

Kauranis perception:
High Operation cost High Maintenance cost Breakdown of services Cancellation of schedules

Comparison with other STUs

viz-a-viz GSRTC, UPSRTC, APSRTC

These STUs were better than RSRTC in terms of fleet

and vehicle utilization In terms of load factor and punctuality RSRTC is much better M D Kauranis decisions: Strengthening of depots to increase operational efficiency Abolition of divisions Integration of command at depot level

Integration of Command

Empowering depot managers

Depot managers designated as Chief manager Transfer and removal power given to Chief manager

No involvement of Chief manager on issues related

to deployment

Other Related Reorganization

Workshops at Division level were abolished.

New workshops were made at depot level.

Garages and workshops were upgraded.

Other Related Reorganization

No. of central workshops increased from 1 to 3

Major bus stations were made independent entities

Collaboration with Sulabh international for toilet

complexes.

Profit linked incentive scheme

Each Depot was declared as an independent profit centre There were Monthly action plan. The targets in action plan were considered as minimum

requirement.
The depots which earned more profits than the target

were given 50 per cent of the excess amount earned.

Profit linked incentive scheme

The profitability target was fixed based on three major parameters
load factor. earnings per kilometer (EPKM)

cost per kilometer (CPKM)

Additions/Modifications to the Incentive Scheme

Sick Depot Rehabilitation:

Incentive for Depots Achieving Profits, but not Targets Incentive for Depots Achieving Targets, but not Profits Revision of Incentive Amount to the Depot Officers.

Additions/Modifications to the Incentive Scheme

Production Incentive for Central Workshop Employees

Special Cleaning Drive for Bus Stands and Buses Incentive for Ticket Booking

Reorganization and After

During 1991-92 and 1992-93 corporation has

shown a profit of Rs 13.6 crore and Rs 6.1 crore respectively

Improvement in physical parameters. daily kilometers operated fleet utilization, vehicle utilization, and passengers transported per day

conclusion
Corporation was in turbulent phase and there was a need

for strong leadership.

Mr. Kaurani emerged as an effective leader for the

organization.

He proved that even loss making organizations can be

turned into profit making entity without compromising with quality.

Mr. Kaurani get the full support from the government for

making reasonable changes.

conclusion
He reorganized the corporation for better control. Performance linked incentive schemes boosted the

employee motivation and sense of belongingness.

These changes resulted in organizations visibility

conclusion
There was fair improvement in customer service. This became an example for other state transport

corporations to follow.
Many magazines praises these phenomenal changes and

recommended for other PSUs.

conclusion

Strong leadership can help achieve even so called unrealistic and unachievable targets.