In a bid to augment revenue, the Tamil Nadu government will enter the logistics business by utilising the available luggage space in the State Transport Undertakings (STU) buses. The plan will entail the buses to transport luggage and store them at STU premises located across the State.

This initiative will be executed as a public-private partnership (PPP) model, with a revenue-sharing arrangement or other suitable commercial terms with a suitable private firm, said sources.

A consultant has been engaged to conduct a detailed feasibility study and provide Transaction Advisory Services, following which Request for Proposal (RFP) will be prepared to select a suitable logistics partner. The selected agency will enter into a Concession Agreement for operating the logistics business.

The Pallavan Transport Consultancy Services Limited has been appointed as the nodal agency by the government to oversee this initiative and facilitate its implementation. This will help Tamil Nadu’s STUs diversify their revenue streams while maintaining essential public transport services for its citizens.

Sustaining public transport

This development marks a significant step towards ensuring the long-term sustainability of Tamil Nadu’s public transport while tapping into new opportunities in the logistics sector, sources said.

Despite rising fuel prices, increasing costs for spares and wages, and an annual financial shortfall of ₹6,600 crores, Tamil Nadu continues to run these services with government support, added sources.

The STUs operate a fleet of 20,232 buses on 10,129 routes across eight STUs, plying from 317 bus depots in 26 regions. These buses cover a combined distance of 82 lakh km per day, transporting about 1.75 crore passengers daily.

State support

The State provides bus services to villages with a minimum population of 1,000, ensuring comprehensive connectivity at the lowest fares in the country, with the last fare revision dating back to January 2018.

The government’s commitment to public transport is reflected in various welfare schemes, such as the Vidiyal Payanam Scheme for women, bus travel reimbursement for students, and concessions for multiple categories of passengers. Support measures also include subsidies like the diesel subsidy and viability gap funding to maintain the viability of the STUs.

In addition to traditional fare-box revenue, the STUs have already undertaken several non-fare revenue initiatives to boost financial sustainability. These include establishing retail outlets for selling diesel and petrol, utilising buses for advertisement space, renting out buildings, introducing CNG-fuelled buses in pilot runs, and outsourcing specific activities, sources said.

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