The cabinet on Tuesday formed a special purpose vehicle — Bihar Urban Transport Services Ltd — for running city buses in the state under centrally sponsored Jawaharlal Nehru National Urban Renewal Mission.

The SPV would facilitate the rolling out of urban transport scheme under which city buses would be run, cabinet secretary Brajesh Mehrotra told reporters.

He said it would be decided by the company as whether the bus service in the cities would be run on by itself or on a public-private-partnership (PPP) mode. The urban development and housing development has to procure 400 buses for Patna and its adjoining areas under the JNNURM. Funds were sanctioned under the JNNURM scheme for procurement of buses for Patna and Bodhgaya (nagar panchayat) in 2009 but no progress has been made yet.

The SPV would run the city service buses in the 11 municipal corporation areas of the state. The department has submitted a proposal with the urban development ministry to run buses in 10 municipal corporations under phase-II of the JNNURM. The PMC has been excluded from the list because the funds for Patna has already been sanctioned.

In another decision, the cabinet approved the pay hike of Rs 3,500 per month for librarians appointed on the consolidated pay in the secondary and higher secondary schools of the state, he said. It would benefit around 1,600 librarians appointed on the consolidate pay in these schools, source said.

It also sanctioned Rs 67.35 crore to South Bihar Power Distribution Company Ltd and Rs 59.22 crore for North Bihar Power Distribution Company Ltd for development of high capacity power distribution and sub-transmission system. Besides, it also gave its nod to provide Rs 20 crore as loan from state plan to both the distribution companies for carrying out the scheme in the current fiscal.