The Hindu : New Delhi News : DTC lodges fleecing charge against auto majors

Online edition of India's National Newspaper
Monday, Jul 19, 2004

New Delhi

New Delhi

DTC lodges fleecing charge against auto majors

By Gaurav Vivek Bhatnagar

NEW DELHI, JULY 18. The Delhi Transport Corporation has registered strong protest with the Delhi Transport Minister, Haroon Yusuf, against the two auto majors, Tata Motors and Ashok Leyland, fleecing the public transport corporation by overcharging it for the spare parts they put in the buses operating on compressed natural gas.

A senior DTC official said during a meeting with the Minister this past week, the officials complained about the conduct of the two bus suppliers, who enjoy a monopoly in the business and have been allegedly using this position to sell auto parts at up to 500 per cent of the cost.

Stating that now it has been over two years that the officials have been complaining to the Delhi Government about the fleecing taking place most brazenly, he said, for some reason the Government officials have chosen to remain silent.

On how the bus companies are overcharging the DTC, the official said both the companies have placed bulk contracts with the parts suppliers with a complete buy back arrangement which ensures that all the parts will be purchased by the companies and none of them will be sold in the open market.

As a result of this, the parts are not available in the market and DTC is unable to purchase them at competitive rates. Further, the official said, whenever DTC places a tender for purchase of these parts, none of the suppliers bid as they are under agreement with these companies to only sell the parts to them. "This leaves the corporation at the mercy of the two companies, which charge for the parts as per will," he said.

Pointing out that the problem owes its origin to the introduction of CNG buses, the official said, it did not exist before as diesel bus parts were easily available in the markets and there were several suppliers who used to bid for their tenders.

To buttress the argument, the official said the rates at which the two companies are providing the spare parts were in themselves giveaways about how much DTC was being fleeced. He said while a diesel bus piston set costs around Rs. 5,000, for the CNG buses the companies are charging between Rs. 15,000 and Rs. 20,000 per set.

Similarly, as against Rs. 200 for a diesel bus bearing, the charge is around Rs. 1,000 for a CNG vehicle and while the gasket set of a diesel bus costs around Rs. 500, for the CNG vehicles DTC is being charged six times over at between Rs. 3,000 and Rs. 3,200.

Such being the case, the official said, the loss-making Corporation is being deprived to its revenues which is affecting its operations. Very often the rates are objected to by the Finance Department -- and also the Auditors -- which further leads to acquisition of the spare parts and renders many vehicles idle.

While on an average, about 10 per cent of the 3,100 strong CNG fleet of DTC remains under maintenance, the official said, due to the delays in purchase of the spare parts due to the high costs involved another 300-odd buses remain inoperative at any given time.

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