Dhaka Transport Coordination Board (DTCB) officials said the Ministry for Communication had decided to lease out the 30-kilometre route between Uttara and Azimpur via Banani, Mohakhali, Bijoy Sarani, Khejur Bagan, Manik Mia Avenue, Kalabagan and Science Laboratory.

Sources in the DTCB informed that a tender was floated in December 2003 following which three companies submitted their bids. Considering their financial capabilities, business status and the proposal, Green Fuel Limited appeared as the most reasonable bidder. The two others -- Green Arrow Express Limited and Amicus Transport Limited -- lost out.

Under the existing system, a large number of buses belonging to different private owners run on the same route and this fragmented ownership prevent them from investing in the sector, believe DTCB officials. At present around 5,800 buses owned by at least 1,000 private owners ply the city roads.

"They never want to invest for enhancement of the service as their business is not ensured," said one of the top officials of DTCB.

The official said the DTCB planned to introduce route franchise for private owners to ensure quality service for the commuters.

"When a single company is given franchise of a particular route, it knows that all passengers of the route would commute in its buses and therefore would feel secured from a business standpoint."

The franchise is also expected to end the ugly competition that exists between bus owners.

"Buses are always seen blocking the paths of one another while they trying to lure commuters to get on board. We think the franchise system would put an end to this practice," said the official.

DTCB sources said the route franchise would be introduced as a pilot project and if it proves to be a success, the remaining 105 bus routes would be leased out to private owners too in phases. Number of buses on a route would be decided according to the requirement of the people.

Officials said that they picked the route from Uttara to Azimpur for test runs because no buses currently ply on that route.

According to DTCB sources, an operator has to have a minimum fleet of 50 buses with half of them air-conditioned to bid for franchise of a route in future. At least half of the buses must be new and the rest of them can not be more than five years old. The routes will be leased out initially for seven years as the cost benefit ratio shows that at least six years were necessary to reach breakeven point. An agreement might be extended for a period not exceeding three years at a time depending on the performance of the bus company.

"Operators should be making profit from the seventh year," said one of the officials.

DTCB officials were also prompt to quell fears of business monopoly.

"Operators will not be able to rip off the commuters as the agreement would prevent them from increasing fare for at least two years unless there is an unusual fuel price hike or unexpected devaluation of the local currency," said one of the officials.

The fare would differ according to the quality of service. The government has fixed a fare of 65 paisa per kilometre for average service. But Green Fuel Limited has proposed a flat rate of Tk 10 per passenger regardless of the distance they travel in non-AC buses.

Regarding the prospect of a large number of people involved with different private bus companies suddenly becoming unemployed because of the franchise, DTCB officials said they did not consider that a problem.

"The government can not introduce franchising on all the routes overnight. It is a long process," said an official who believed that workers of different bus companies will be easily absorbed in the new enterprises taking lease of routes as they would require more manpower.