Bhopal, Apr 1 (PTI) Madhya Pradesh cabinet on Tuesday approved a proposal to reintroduce the government-backed bus service, suspended around two decades ago, for the convenience of passengers.

The decision to launch the "Mukhyamantri Sugam Parivahan Seva" to provide organised, convenient and safe passenger bus transport services on ordinary and rural routes in cities and rural areas was cleared in a cabinet meeting chaired by CM Mohan Yadav.

The then BJP government in 2004 shut down the MP State Transport Corporation citing huge losses, creating a vacuum in the road transportation network that was filled by private players.

"This model will operate on the PPP (Public Private Partnership) basis," state Transport Minister Rao Uday Pratap Singh said.

According to an official, passenger buses will be operated through systematic planning by determining rural and ordinary service routes and traffic.

The cabinet decided to sanction Rs 101.20 crore equity capital to start the passenger transport service and set up a state-level holding company.

Currently, Special Purpose Vehicles (SPVs) have been formed under the Company Act for public transport in 20 cities, of which 16 are operational.

"All the above companies will be merged into seven divisional companies. A holding company will be formed at the state level under the Companies Act 2013 for integrated control of these seven companies," the official said.

The council of ministers also okayed discharging responsibilities under the three-tier structure and investing 51 per cent shares of the state-level holding company in seven subsidiary companies.

According to the official, the regional subsidiary companies will be formed by amending the existing city bus transport companies in the respective divisional headquarters. PTI ADU NSK

Public private partnership bus service reinstatement enables state holding company control and majority investment in regional subsidiaries. The government will relaunch passenger bus services via a Public Private Partnership named Mukhyamantri Sugam Parivahan Seva, implementing systematic route planning and operation through SPVs. Existing city SPVs (20 formed, 16 operational) will be merged into seven divisional subsidiaries; a state-level holding company will be formed under the Companies Act, 2013 for integrated control. The framework establishes a three-tier governance structure, regional subsidiaries created by amending city bus companies, sanctioned equity capital to commence services, and a 51 percent state shareholding in the subsidiaries.