Urban bus based Public Transport has been in the exclusive domain of the public sector. With the public sector being unable to rise to the expectations of the commuters, thinking has been gaining ground that the private sector should be given an active role in urban public transport. While it is true that the private sector brings in some degree of operational efficiency, it also throws up new challenges. Urban public transport is too sensitive an activity to be left totally in the hands of public sector. Therefore a harmonious blend of private sector efficiency and public sector concern can provide a solution to the problems of urban transport. Thus a system of hiring of private buses is introduced in BMTC. The hallmark of the system has been total objectivity, automatic revision of rates payable linked to certain indices, along contract period giving the private operator certain security. The system results in tremendous cost savings and when operated with due care, can be the first step in inducting private capital into fund starved public sector transport undertaking.