Berhampur, July 5: Ganjam Urban Transport Services Limited will appoint a private party to run the city bus service from August.

On February 25 last year, the transport body had signed an MoU with the Odisha State Road Transport Corporation for one year, which was extended to six months up to August 25 till the substitute takes over.

"We are not satisfied with the corporation's service," said the transport body's deputy chief executive officer Dipti Mahapatra, who is also secretary of the Berhampur Development Authority.

The urban and housing department has also given nod to this move, sources said.

Chief minister Naveen Patnaik had flagged off the city bus service on February 26 last year.

"The service was introduced to provide easy accessibility of transport to the public with no profit motive. But, we cannot bear the continuous loss in the operation," said Mahapatra.

"We have just floated tender to invite the new private parties. Though earlier we did the same, no private party came forward at that time. However, we are hopeful this time," she said.

"The corporation had incurred a loss of Rs 19 lakh till this May. The department had promised to bear all the profit and loss in the operation of the city bus service, and it was clearly mentioned in the agreement. The transport body had also failed in its promise to provide Rs 10,000 for each bus, according to the agreement, and many other conditions in the MoU were also not fulfilled," deputy transport manager of the service Amiya Kumar Mishra, who is now looking after operation on behalf of the corporation, said.

Last year, the service was launched with seven buses. In the same year, the number increased to 12 in March, 16 in April and 26 in September.

Sources said that though the department had provided 32 buses to the transport body, six were deported to Rourkela on the advice of the department.