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Old March 26th, 2013, 09:20 PM   #6161
Metropole
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In an old post I did a cost analysis of the project:

http://www.skyscrapercity.com/showpo...postcount=3687

Lets do it again with some new numbers.

COST OF PROJECT

1) Construction: Rs. 31 billion ($310 million)
2) Buses: Rs. 1 billion ($10 million) (Daewoo buses given away)
3) New Ravi Bridge to cost extra.

TOTAL COST OF PROJECT: Rs. 32 billion ($320 million)

RUNNING COSTS

1) Rs. 1.5 billion ($15 million) per year to be paid to the Turkish company.
2) Maintenance cost: Rs. 250 million (my guesstimate)

TOTAL ANNUAL COST (per year): Rs. 1.75 billion ($17.5 million)

INCOME

100,000 users per day paying Rs. 20 per trip = Rs. 2,000,000 per day.
x 365 days = Rs. 730,000,000 per year = ($7.3 million)

TOTAL ANNUAL INCOME: Rs. 730,000,000 per year = ($7.3 million)

ANNUAL SUBSIDY TO RUN SERVICE = Rs. 1.75 billion - RS. 0.73 billion = Rs. 1.02 billion ($10.2 million)

So basically it will cost the Punjab government Rs. 1.02 billion ($10.2 million) annually to run the service. The original cost of Rs. 31 billion for building the track is a sunk cost with no return.

IF WE ASSUME AN INCREASE IN FARE BUT NO REDUCTION IN TRAFFIC WHAT IS THE BREAK-EVEN FARE?

Rs. 1,750,000,000 Total annual cost ÷ 365 days = Rs. 4,800,000 daily cost of service.
Rs. 4,800,000 ÷ 100,000 daily users = Rs. 48

BREAK EVEN FARE = Rs. 48
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Old March 26th, 2013, 09:21 PM   #6162
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Old March 26th, 2013, 09:22 PM   #6163
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Quote:
Originally Posted by Lahore2Dubai View Post
It seems that this project was launched primarily as a marketing tool for the upcoming elections as initially it was supposed to be free for a month and later on, a hugely subsidized fare was being charged which at the exact moment of stepping down of the government has been notified to double. The timing does infact makes one wonder.

However, I think we should check what was the actual cost and time taken for travel before the MBS between the starting and ending point of the bus to analyse whether the common man is better off or worse off.
Go through the last few pages & you will get the answer of your last two lines friend
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Old March 26th, 2013, 09:33 PM   #6164
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I still say it is too much. Stop to Stop should be like Rs 5 or so. Halfway should be like Rs. 10 and full journey Rs. 20.
Rs 5 is way too less! We will have to see how many people get effected by the maximum fare of Rs 40 from one end to other end, IMO if 150 people ride a bus at first station from either of the ends, only 10 out of those people would stay in the bus to get off at the last station where as the remaining would get off in between. And if there was no Metro, then the cost of travelling from one end to the other was around Rs 70 - Rs 80, and it took a minimum of two hours. So it still might be acceptable for those commuters!

@metropoles analysis, Some official of the Metro Bus authority told in an interview that MBS reaches its break even points if a total of 30000 passengers travel daily. But to be honest that figure doesn't seem very viable to me.
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Old March 26th, 2013, 09:34 PM   #6165
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At the Rs. 20 fare there's a Rs. 1 billion annual subsidy for the bus line. Since we haven't seen the agreement with the Turkish company we don't know if increasing the number of buses will actually increase the money paid to the Turkish company for the service.

So if they increase the number of buses the annual cost of the project might go up higher then Rs. 1 billion per year.

We still haven't counted the cost of building a new bridge over the Ravi, which may be more than the cost of the whole project. Otherwise the traffic jam over the existing bridge will continue.

The bottom line is that if we want an international quality service we'll have to pay an international price for it. There's no way to avoid that.

Eventually we can afford this and other projects like Metro Rail if Pakistan's economy grows massively.
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Old March 26th, 2013, 09:43 PM   #6166
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What an interesting approach to get this bus project in Lahore. I have not yet seen a concept of a bus-metro before!
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Old March 26th, 2013, 09:53 PM   #6167
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Metropole man you are awesome brilliant analysis and the calculation of break even on an assumption bases which is some how near to realistic is awful and I support you big time.
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Old March 26th, 2013, 10:19 PM   #6168
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i think there are close to around about 125k-140k people daily....so around 35-40 rupees should be sufficient..

Metro or any type of transport system around the world are rarely self-sufficient, they are always subsided by local governments
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Old March 26th, 2013, 10:21 PM   #6169
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Thanks for the analysis, Metro. We also have to consider whether the 100,000 daily ridership stays in the aftermath of this hike. In my opinion this service hasn't been run long enough for people to be hooked onto it, or see the benefit to it. If I were using a service for several months or a year, it's natural for one to adapt change at that time as you're so used to it, and it's part of your daily routine now, but considering this sudden change, it could potentially lead to lower ridership numbers.
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Old March 26th, 2013, 10:29 PM   #6170
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Quote:
Originally Posted by Azmuh View Post
i think there are close to around about 125k-140k people daily....so around 35-40 rupees should be sufficient..

Metro or any type of transport system around the world are rarely self-sufficient, they are always subsided by local governments
yes they are subsidized but unfortunately our Govt is not financially strong enough to give subsidies . India & Brazil are way stronger than Pakistan even though they are still underdeveloped nations.

Either we subsidize MBS or give free medicines, this is the situation of all the Govts right now as our economy is in shambles & tax revenue is minimal.
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Old March 26th, 2013, 10:45 PM   #6171
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Well maybe it's high time for Pakistanis to start paying taxes or be third world forever. You all seem to elect the same people who don't pay taxes and give a damn, whether it's the ganja brothers or zardari and the 100 thieves.

Also most Pakistanis don't pay taxes. I have extended family from defense karachi to a step cousin former minister in Baluchistan cabinet to a uncle, a commodity trader in quetta,who do the same. We all have family that do the same. The tax culture there Sucks as! And majority of you don't do it too.

"Until then stop wishing for first world amenities. It won't happen unless it's charity by another country"--yea it's blunt but honest.
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Old March 26th, 2013, 10:52 PM   #6172
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I don't know if this has been discussed here before or not but I feel like this project could have been constructed much more efficiently. For example; why bring in fancy buses and to accomodate those buses create expensive terminals. At the end of the day, point of metro bus is affordability and time saving. If either cannot be achieved then it defeats the purpose. Buying expensive buses (which significantly increase maintennce cost) and constructing terminals two feet higher from road is a complete waste of money.
Buying normal buses (which are way cheaper to buy and localy maintained) and building cheaper terminals could have saved a lot of money as well as led to cheaper fair. Both purposes would still be achived (speed and affordability).

Now we have fancy buses and terminals but out of reach for common man.
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Old March 26th, 2013, 11:10 PM   #6173
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Quote:
Originally Posted by Khanvict View Post
I don't know if this has been discussed here before or not but I feel like this project could have been constructed much more efficiently. For example; why bring in fancy buses and to accomodate those buses create expensive terminals. At the end of the day, point of metro bus is affordability and time saving. If either cannot be achieved then it defeats the purpose. Buying expensive buses (which significantly increase maintennce cost) and constructing terminals two feet higher from road is a complete waste of money.
Buying normal buses (which are way cheaper to buy and localy maintained) and building cheaper terminals could have saved a lot of money as well as led to cheaper fair. Both purposes would still be achived (speed and affordability).

Now we have fancy buses and terminals but out of reach for common man.
Actually the cost of building the project has no relation to the running costs because the original cost of building the system is gone, never to be recovered. If that money had been borrowed and payments were being made to a bank it would have added another Rs. 1.5 billion ($15 million) to the annual cost.

Running costs come from the money being paid to the Turkish company for the service and income comes from the fares being collected. Costs are higher than the income unless they subsidize fares.

Every time another project like this is built in Lahore or any other city they will have to keep in mind that apart from the initial cost of building the project they have to pay an annual subsidy to keep it running.
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Old March 26th, 2013, 11:30 PM   #6174
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Originally Posted by Metropole View Post
Running costs come from the money being paid to the Turkish company for the service

Exactly! thats my point. Why pay Turkish Co.? Why not use local buses to keep the cost low therefore keeping it affordable.
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Old March 26th, 2013, 11:37 PM   #6175
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Quote:
Originally Posted by Khanvict View Post
I don't know if this has been discussed here before or not but I feel like this project could have been constructed much more efficiently. For example; why bring in fancy buses and to accomodate those buses create expensive terminals. At the end of the day, point of metro bus is affordability and time saving. If either cannot be achieved then it defeats the purpose. Buying expensive buses (which significantly increase maintennce cost) and constructing terminals two feet higher from road is a complete waste of money.
Buying normal buses (which are way cheaper to buy and localy maintained) and building cheaper terminals could have saved a lot of money as well as led to cheaper fair. Both purposes would still be achived (speed and affordability).

Now we have fancy buses and terminals but out of reach for common man.
I disagree. These buses have 3 times the capacity of normal buses and these terminals had to be constructed "two feet high from the road" as there isn't much space on the ground. Otherwise traffic would be clogged.
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Old March 26th, 2013, 11:58 PM   #6176
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Exactly! thats my point. Why pay Turkish Co.? Why not use local buses to keep the cost low therefore keeping it affordable.
That's a legitimate suggestion.

They had initially imported Daewoo buses for this project for Rs. 1 billion and then signed a deal with the Turkish company which brought it's own buses.

Even if they got the bigger buses and ran the service themselves it would probably have cost less than Rs. 1.5 billion per year and they would have reduced running costs. But they would have had to pay for buying the buses, which at the moment are paid for by the Turkish company.

That might be the way to go in the future.
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Old March 27th, 2013, 12:24 AM   #6177
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I disagree. These buses have 3 times the capacity of normal buses and these terminals had to be constructed "two feet high from the road" as there isn't much space on the ground. Otherwise traffic would be clogged.
They indeed hold 3 times the people but cost 5 time more! Just a general search I did resulted in this: 50 capacity bus for $50,000. 200 capacity bus (like the ones bought) cost $250,000. Why not buy 3 for $150,000 and save $100,000 upfront and then maintenance cost later as well.

by "two feet above ground" I meant since the metro buses' doors are built two feet from road/ground, we had to built terminals two feet high from road/ground as well to align with buses. Had we bought ordinary buses, we would not have had to build such sophisticated terminals. Like Metropole said those are sunk cost and don't generate revenue.

Everyone has their opinion and this is just what I think. MBS is a good idea executed wrongly.

Cheers!
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Old March 27th, 2013, 04:37 AM   #6178
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hold on to your horses people.

In the news today - Punjab Govt. has said that the news is a hoax - no fare hike is planned.
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Old March 27th, 2013, 05:24 AM   #6179
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That's a legitimate suggestion.

They had initially imported Daewoo buses for this project for Rs. 1 billion and then signed a deal with the Turkish company which brought it's own buses.
whats the length of the contract with the Turkish company? 5 yrs or 10 yrs? .....my point is eventually MBS will own the buses then only maintenance cost would incur.

But then i dont know whats the life of these buses.

Another reason the terminal is raised is because the word is that they would convert it to light-rail. when that will happen, only God knows.
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Old March 27th, 2013, 05:43 AM   #6180
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I heard the news that they were ordering 19 more buses.....COME ON ..... after spending so much money You are just going to increase the amount of buses. I DID A little research and well THE worlds first BRT in BRAZIL has come up with this. Instead of increasing the number of buses.... they ordered Bigger buses.... ALSO known as BI-articulated buses......They have a capacity of 300 Sitting (double the capacity of current buses)
THIS IS JUST AN OPINION SO please avoid criticism

Hi, this bus isnt in brazil.

But you are right, Curitiba For example has the biggest bus in the World.

28 meters

Imo That's a good option.

Here:
image hosted on flickr


image hosted on flickr


image hosted on flickr
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