Key financial strains include rising fuel costs, employee salaries, and loan interest payments.
State Transport Undertakings (STU) in Tamil Nadu collectively reported a monthly loss exceeding ₹566 crore In the financial year 2024-25 (up to February) as against a monthly loss of ₹531.74 in the previous fiscal, as per the Transport Department Policy Note 2025-26 presented in the Assembly on Wednesday by Transport Minister SS Sivasankar.
Rising fuel costs, employee salaries and loan interest payments have placed significant financial strain on STUs, threatening their sustainability, it said. The State offers the lowest bus fares in the country, maintaining affordability despite rising operational costs. The last fare revision occurred on January 29, 2018, the policy note added.
The STU fleet comprises 20,508 buses, including 18,674 scheduled services and 1,834 spare buses. Certain districts, such as Chennai, Nilgiris and Kanyakumari, are exclusively served by STUs, while others benefit from a combination of STU and private operator services. Long-distance bus services, whether inter-state or intra-state, are exclusively operated by the State Express Transport Corporation, regardless of the operational jurisdiction of other undertakings.
There are plans to procure 11,907 new buses through funding support from KfW, the World Bank, the Special Area Development Programme and the State Government. Out of this total, 3,584 new buses have already been inducted into the fleet. An additional 750 buses are scheduled for deployment by June 2025, 1,098 by September 2025, 900 by December 2025 and 914 by March 2026. In total, 7,246 new buses will be on the road by the end of FY 2025-26.
Further, Metropolitan Transport Corporation (MTC) plans to add 1,225 electric buses under Gross Cost Contract method, with 625 expected to be rolled out by mid-2025.
Published on April 23, 2025