Public Private Partnership in Intra-City Transport in Indore (Metro Taxi Case)

Indore is the commercial capital of M.P., the centrally located province of India. An unprecedented welcome change ushered in the lives of local population here on the 57th Republic Day of the nation i.e. 26th Jan 2006 when ultra-modern-low-floor buses started plying on various routes of the city and improved the public transport services to unimaginable levels. The cause of jubilation was a brainchild of the local municipal authorities. The model deployed was that of Public Private Partnership for the purpose of which a company by the name of Indore City Transport Services Ltd. (ICTSL) was incorporated on December 1, 2005 with an objective to operate and manage the public transport system of Indore. Buoyed by its success, ICTSL invited Expression of Interest (EOIs) from private players for operating radio cab services in Indore in October 2007. The original tender as solicited by ICTSL was for 100 taxis (two groups of 50 taxis each). The promoter company Prem Call Cabs Private Limited (PCCPL) – promoted by the biggest public bus operators in Indore, bagged contracts for both the groups. The case illustrates the evolution and execution of the project undertaken by PCCPL to operate the radio cab services in Indore. Detailed analysis of financials and feasibility issues raised in the case is intended to foster class discussion. Primarily an illustrative one, the case can be used for Project Appraisal and Finance or Large scale and infrastructure project finance course at MBA, CPA, Business Graduate and Undergraduate and Executive education programs. Teaching note is available at the end to facilitate the instructor