Analysis of Corporate Restructuring of Gujarat State Road Transport Corporation
Indian Institute of Management Indore
Towards the Strategic Transformation of Gujarat State
Road Transport Corporation
INTRODUCTION
Gujarat State Road Transport Corporation (GSRTC), the State Transport Undertaking (STU) of
Gujarat, came into existence on the 1st of May, 1960 as a result of bifurcation and rearrangement of the states, post independence. Over the next five decades, it grew from a modest beginning with 7 divisions, 76 depots, 7 divisional workshops and 1767 buses to 16 divisions, 125 depots, 226 bus stations, 1554 pick-up stands and 7750 buses. Consistent with its three tiered administrative structure,
GSRTC set up three tier maintenance and repair facility consisting of 126 depot workshops, 16 divisional workshops and a central workshop. Besides, it also built 7 Tyre-Retreading plants, 1 bus body building plant with a capacity of 1000 bus bodies/year and 1 ticket printing press.
In terms of operations, it runs 65221 schedules of buses per day with an average of 6684 vehicles on road per day. The average vehicle utilization stands at 417 km/day with a mileage efficiency of 5.53 km/l of diesel and a fleet utilization of 87.89%. The yearly passenger load is around 875 Million with a total traffic earning of Rs. 13474 Million. GSRTC provides connectivity to approximately 98% of rural Gujarat as also some important travel destinations in the neighbouring areas. In terms of population, the corporation covers 99% of the state’s population.
In contrast to the operational expansion, the financial performance however had been less spectacular, with the corporation accumulating losses in its balance sheet for consecutive years. The losses were a result of a combination of factors – both internal and external in nature and origin. This necessitated a turnaround initiative towards profitability. As a first step towards the turnaround process, the corporation redefined its vision and
Towards the Strategic Transformation of Gujarat State
Road Transport Corporation
INTRODUCTION
Gujarat State Road Transport Corporation (GSRTC), the State Transport Undertaking (STU) of
Gujarat, came into existence on the 1st of May, 1960 as a result of bifurcation and rearrangement of the states, post independence. Over the next five decades, it grew from a modest beginning with 7 divisions, 76 depots, 7 divisional workshops and 1767 buses to 16 divisions, 125 depots, 226 bus stations, 1554 pick-up stands and 7750 buses. Consistent with its three tiered administrative structure,
GSRTC set up three tier maintenance and repair facility consisting of 126 depot workshops, 16 divisional workshops and a central workshop. Besides, it also built 7 Tyre-Retreading plants, 1 bus body building plant with a capacity of 1000 bus bodies/year and 1 ticket printing press.
In terms of operations, it runs 65221 schedules of buses per day with an average of 6684 vehicles on road per day. The average vehicle utilization stands at 417 km/day with a mileage efficiency of 5.53 km/l of diesel and a fleet utilization of 87.89%. The yearly passenger load is around 875 Million with a total traffic earning of Rs. 13474 Million. GSRTC provides connectivity to approximately 98% of rural Gujarat as also some important travel destinations in the neighbouring areas. In terms of population, the corporation covers 99% of the state’s population.
In contrast to the operational expansion, the financial performance however had been less spectacular, with the corporation accumulating losses in its balance sheet for consecutive years. The losses were a result of a combination of factors – both internal and external in nature and origin. This necessitated a turnaround initiative towards profitability. As a first step towards the turnaround process, the corporation redefined its vision and