1. INDIAN ROAD TRANSPORT
SERVICE EFFICIENCY STUDY –WB
ROAD TRANSPORT REPORT
Presented By
Siddharth Ranjan

2. INTRODUCTION



World Bank has been long involved in financing in
road infrastructure in India and presently the amount
exceeds USD 4 million.
This report has been undertaken to assess the
present policy regime, and identify measures which
may be considered to improve the functioning of road
transport.
The study has focused on 3 most important aspects
relevant to investments in highway financing. They
are:
- Trucking Industry
- Inter-city buses
- Motor insurance industry

3. PROBLEMS IDENTIFIED
Trucking industry-:
 Trucking freight rates are so low that the industry is
suffering from intense losses.
 Low reliability and transit times nearly double that of
developed countries.
 Truck delays at checkpoints .
Inter-city buses-:
 They are incurring losses on urban services.
 The private sector has won back a rapidly increasing
share .
 Increase in no. of staff has led to escalation in unit costs
of STUs.

4. CONTINUED…..
Motor insurance policy-:
 The motor insurance industry in India is not
performing a critical role needed to enhance
road safety penalizing poor driver
performance .
 There is no legal frameworks such as a
statute of limitations, liability limits and
thresholds for claims adjudication.

5. TRUCKING INDUSTRY
India achieved a highly competitive, low cost
road freight transport industry for basic services
with world’s lowest high way freight rates.
 The trucking industry is deregulated in India
which is structured by transporters, small
operators, broker agents .
 Quality of service rendered is very poor. Highly
inadequate for high value manufactures.
Multiple check points further add on to the
transit times.
 Low cubic capacity represents freight market of
heavy, unpackaged commodities.


6. TRUCKING INDUSTRY
Recommendations-:
 Introduction of tractor-trailer multi-axle
vehicles would reduce transport costs and
road damage.
 To reduce delays at border crossings system
such as the European T.I.R. should be
introduced.
 Audio-visual driver training to the drivers.
 Carrying of two licensed drivers at all times.

7. INTER-CITY BUS SERVICES
Creation of State Transport Undertakings
(STUs) with monopoly franchises for many intercity bus services.
 The private sector has won back a rapidly
increasing share of the inter-city road passenger
market.
 Unit costs of STU operations have escalated
due to excessive staffing.
 55% in 1981-82 to 80% in 2002-03 is the
nation’s bus fleet in hands of private owners.


8. INTER-CITY BUS SERVICES
Recommendations-:
 Deregulation of tariffs, restructuring and
commercialization of STUs, elimination of STU
monopoly rights.
 Enforce competition rules and ensure access to
common user infrastructure (terminals, bus
stops).
 No restricting entry into the inter-city bus
transport markets and allowing market forces to
determine both tariffs and the types of services
offered .
 STU should follow reforms proposed by ASRTU.

9. MOTOR INSURANCE INDUSTRY





India is among the most road accident prone countries in the world,
accounting for only 2 percent of the global car fleet, it is responsible
for over 7 percent of all accidents world wide.
Insurance policy form issued by the IRDA which covers both Own
Damage (OD) and Third Party Liability (TPL).
Auto and truck liability insurance policies do not have an upper
liability limit.
Claims settlement process also imposes significant burden on the
industry.
There are various structural impediments such as state of existing
legal framework , enforcements of safety regulations in motor
industry etc.

10. MOTOR INSURANCE INDUSTRY
Recommendations-:
 IRDA should initiate the development of an integrated
claims database.
 IRDA should also explore the creation of a motor
insurance pool for bad drivers.
 It is of paramount importance to tighten up licensing
requirements for issuing commercial drivers’ licenses.
 Establishing an Insurance Mutual for the Motor
Industry.
 Introduction of claim threshold.

11. THANK YOU