Private Participation in Indore City Transport: Metro Taxi
Indore is the commercial capital of Madhya Pradesh, a centrally located province of India. A welcome change was ushered into the lives of the city's inhabitants on January 26, 2006, on the occasion of India's 56thRepublic Day. The city, which had a legacy of a deplorable public transport system operated by private interests, launched a fleet of ultra-modern, low-floor buses that greatly improved the public transport service. The cause of the jubilation was the brainchild of the local municipal authorities. The model deployed was that of a public-private partnership. A company by the name of Indore City Transport Services Ltd. (ICTSL) was incorporated on December 1, 2005, with the mandate to operate and manage the public transport system of Indore.
The case illustrates the evolution and execution of the project undertaken by PCCPL to operate the radio cab service in Indore. It further explores the dilemma faced by the promoter of Metro Taxi with reference to high operating costs due to delays in CNG (low-cost fuel) supply and the slated plans to expand the fleet size. The exhibits containing the financial forecasts, analysis and feasibility issues discussed in the case are intended to provide a good illustration of financial modeling, to foster class discussion and to facilitate students understanding. Primarily an illustrative case, this case can be used for courses on public-private partnerships, infrastructure financing, project appraisal and financing in the introductory modules, or modules related to transport/infrastructure in MBA, CPA, business graduate and undergraduate programs and executive education programs. Teaching notes are available for class instructors to facilitate teaching of the case.
The case illustrates and encourages analysis and debate of the following aspects of project appraisal and financing: