Controversies around Kilambakkam bus terminus: Here is what CMDA says

We spoke with CMDA about the lack of clarity on the operations of Kalaignar Centenary Bus Terminus in Chennai. Here are all your questions answered.
Kilambakkam bus terminus
Kilambakkam bus terminusCitizen Matters
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The Kilambakkam bus terminus has been marred by controversies ever since it opened to the public. Why was the terminus opened in such a hurry? Why did the CMDA award the contract for Operation and Maintenance to a single concessionaire? What is going to come up at the location of Koyambedu bus stand?

Chennai residents are looking for answers to all these questions. To get a clear picture about the operations of the new terminus and put all controversies to rest, we spoke with CMDA Member Secretary, Anshul Mishra. Here is what the CMDA has to say about the issues.

Read more: Chennai’s new bus terminus in Kilambakkam: Here is all you need to know

Transition plan for Kilambakkam bus terminus

Controversy 1: It looked like CMDA opened Kilambakkam bus terminus in a hurry. There was no clear communication on the transition plan. Can you please clarify this?

CMDA’s response: CMDA commissioned the Comprehensive City Transport Plan before the Second Master Plan. Accordingly, the southbound buses were to be operated from Kilambakkam, which would cover 70% of the traffic.

The Kilambakkam bus terminus was supposed to be completed in 2022 but was delayed for various reasons. Work on providing connecting roads, provision for traffic management on GST road, police stations and stormwater drains, which were not part of the original plan, caused delays. By mid-2023, we said we would open the terminus by the year’s end and we kept our word.

From the beginning, the plan was to operate southbound buses from Kilambakkam. We communicated this clearly to stakeholders including the MTC, SETC, TNSTC and Omnibus operators. Maybe, we should have given a clear picture to the public. But, we did not open in a hurry.

On the O&M contract to a single concessionaire

Controversy 2: Why did the government decide to award the contract for the Operation and Maintenance (O&M) of the Kilambakkam bus stand to a single concessionaire?

CMDA’s response: Maintaining the bus stand efficiently requires the services of a specialised agency. The work of this agency involves maintaining sanitation, managing parking, security services, shops, information system boards, bus parking, electricity and water supply.

In Koyambedu, all these were given to different agencies and so the CMDA was unable to monitor all of them. This led to the deterioration of service over the years.

The concessionaire must deploy more than 500 people to manage the bus stand. This is a huge expenditure that the government does not have the bandwidth to handle. So, we decided to outsource the O&M of Kilambakkam bus terminus to a single concessionaire.

Read more: Chennai pins hopes of decongestion on upcoming Kilambakkam bus terminus

Lack of transparency

Controversy 3: The lack of transparency over awarding the O&M contract to BVG India Private Limited. Can you explain the contract process?

CMDA’s response: We entered into a public-private partnership (PPP) model for O&M of Kilambakkam bus terminus. To develop this model, we needed a transactional advisor to select whom we floated a tender through Tamil Nadu Urban Infrastructure Financial Services Limited in 2022. Jones Lang LaSalle (JLL) Property Consultants (India) Private Limited was selected. 

JLL did a market analysis and came up with a report. They found that the expenditure per annum for O&M of Kilambakkam bus terminus will be Rs 29.3 crore and the revenue generated from the Kilambakkam bus terminus will be Rs 30.64 crore. 

This brings the profit to Rs 1.34 crore. Someone who takes up the O&M should quote a minimum of Rs 1.30 crore.

We sent the report Tamil Nadu Infrastructure Development Board (TNIDB) and other departments for approval. They vetted the proposal and approved it.

We then called for tenders for O&M. Initially, five firms showed interest but many withdrew, as the conditions of the tender were stringent.

Key conditions of the contract

Here are the key conditions of the contract:

  • The selected single concessionaire cannot operate under his original company name but must form a new company for the O&M of the Kilambakkam bus terminus. For this, they must form a Special Purpose Vehicle (SPV).

  • The selected firm should maintain the accounts in the escrow account — i.e, an account CMDA and the concessionaire will jointly operate. We must be able to monitor the revenue throughout the period of the contract (15 years in this case).

  • The expenditure should first go for O&M of the bus terminus, then towards the concession fee whatever that they have to pay to the CMDA and then the margin left after this can be taken as a profit by the company. 

  • We asked the company to give a bank guarantee for the cost of O&M for one year. This way, even if the company tries to run away thinking that it cannot make a profit out of this, we will have a hold over the finances.

Our tender regulations do not bar acceptance of a single tender. Central Vigilance Commission (CVC) guideline notes that the single tender can be accepted, if we have given enough time for the bidders, created enough competition and there is transparency in the process.

To encourage more people to participate, we extended the tender three times. Finally, only BVG participated. 

The awarding process

First, we did a technical evaluation, which BVG cleared. Then we opened the financial bid in which they quoted Rs 2.11 crore per year, which is more than Rs 1.34 crore (our profit offset price). 

Since it is a single tender, we negotiated further and asked them to increase the quote. They then came up with Rs 2.4 crore per year with an increase of 15% every three years. This was the final quote. 

We took this to the tender, scrutiny and evaluation committee, which comprises CMDA, and representatives from the TNIDB, finance and law departments. This committee is formed under the PPP Procurement Rules, 2012.

After clearance from the committee, we awarded the tender to BVG and asked them to submit the bank guarantee of Rs. 30 crore, form the SPV and sign the contract, which they did within 60 days.

In the meantime, the bus terminus was opened. We were confident that we would be able to run the bus terminus for the initial 2–3 months, as we have done with the Koyambedu bus terminus. The revenue generated during this period would go directly to CMDA and not the single concessionaire.

As per the plan, they will take it up fully from April 1. 

On the land reuse of Koyambedu bus terminus

Chennai Mofussil Bus Terminus (CMBT) in Koyambedu.
Chennai Mofussil Bus Terminus (CMBT) in Koyambedu. Pic Courtesy: CMDA

Controversy 4: There are speculations that a mall will come up in Koyambedu. What will you do with the land used for the Koyambedu bus terminus?

CMDA’s response: Whatever is best needed for the city will come up. There are hundreds of things which we can do. It depends on what is going to work in that space. A detailed study will be conducted and the government will decide on it. There is no need for any speculations.

Shobana Radhakrishnan is a Senior Reporter at Citizen Matters.

This article was first published in Citizen Matters and has been republished with due permission. (c) Oorvani Foundation/Open Media Initiative.

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