The Sri Lankan government has ordered these buses from India’s Ashok Leyland under a cabinet approval in March this year.
According to the contract, the Indian company will supply 800 two-door, 42-seat buses at the unit price of US$31,000 and 1,400 semi luxury 54-seat buses at the unit price of $34,100 as recommended by the Cabinet Appointed Negotiating Committee (CANC).Ashok Leyland is expected to supply the buses within the next six months.
The transaction will be carried out by Lanka Ashok Leyland PLC, a joint venture between Ashok Leyland of India and the Sri Lankan government, on supplier’s credit basis.
The government will give the Sri Lanka Transport Board (SLTB) Rs. 5 billion spread over five years to settle the cost while the SLTB will have to bear the rest of the cost.
The Treasury has allocated Rs.1 billion to the SLTB this year in support of its capital investments to buy these Ashok Leyland buses, a senior official of the Finance Ministry said.
The financial allocation was made despite the decision taken by the Treasury to grant funds from the annual budget in the future, only for the loss of income to the SLTB due to operations on uneconomical routes and for issuance of school season tickets. It has also decided to settle the statutory dues such as EPF and ETF contributions from the funds generated through the sale of non-economical and unserviceable buses, he revealed.
The Treasury will provide Rs. 500 million to bridge the SLTB revenue shortfall this year, he added.
The government has shelved the earlier plan to import 3,000 buses from China for the SLTB as the Leyland bus is more suitable for Sri Lankan roads, a transport ministry official said.
Private bus operators have a virtual monopoly over passenger bus operations in the country as there are more private buses than state-owned passenger buses.
According to the Ministry official, out of the 7,662 SLTB buses, 2,916 are not roadworthy.
The majority of the buses are over 15 years old and used to the maximum with the SLTB spending Rs. 510 million rupees each month on all its operations.
“The SLTB fleet has only 2,500 buses that are seven years old. All the others have been in operation for the past 15, 20 or 30 years,” he revealed.
He said that it is difficult for the SLTB to maintain and repair these old buses.