Karnataka: KSRTC terminates contract with private firm for cargo business

In December 2023, KSRTC inducted 20 GPS-fitted trucks into the Namma Cargo fleet.

The Karnataka State Road Transport Corporation (KSRTC) has terminated its contract with a private firm for its cargo business.

In 2020, KSRTC signed an agreement with Bengaluru-based Strategic Outsourcing Services as a business facilitator and launched 'Namma Cargo' services. However, KSRTC sources told Moneycontrol that the contract was scrapped on August 23, 2024.

KSRTC has also communicated the termination to other Road Transport Corporations (RTCs) in the state, a copy of which Moneycontrol has seen. It states that the cancellation of the contract will come into effect from November 23, 2024.

Also, read: KSRTC inducts 20 trucks into cargo arm, aims Rs 100 cr annual revenue by 2025

The agreement included providing space for the company to set up its parcel counters at bus stands across the state. "We decided to terminate the contract due to complaints from users and issues with the commission. Now, we will directly run the cargo business to save the commission amount," said a senior KSRTC official.

In February 2021, KSRTC launched the Namma Cargo services using buses from KSRTC, North Western Karnataka Road Transport Corporation (NWKRTC), and Kalyana Karnataka Road Transport Corporation (KKRTC) to transport cargo across the state and select locations in neighbouring states including Andhra Pradesh, Goa, Kerala, Maharashtra, Tamil Nadu, and Telangana.

KSRTC had hoped to earn around Rs 100 crore a year from parcel and cargo operations but was only earning Rs 25 crore annually. In December 2023, KSRTC inducted 20 GPS-fitted trucks into the Namma Cargo fleet.

Also, read: Karnataka wins legal tussle against Kerala over the use of 'KSRTC'