One of the biggest loan component amounting to Rs 1,600 crore taken from their parent body Brihanmumbai Municipal Corporation (BMC) will end this month.
The Brihanmumbai Electricity Supply and Transport (BEST) is bleeding losses as they have anticipated Rs 720 crore deficit in 2019-20. Amidst this vortex of loans, there is a silver lining. One of the biggest loan component amounting to Rs 1,600 crore taken from their parent body Brihanmumbai Municipal Corporation (BMC) will end this month.
This will taken off burden from their heads --- though the fact remains that they have other short and long term loans to pay off. The BEST officials said that paying off the BMC is one of the biggest reasons why the Undertaking has taken the risk of not going for fare hike and adding more 713 buses to their fleet.
The BEST had to repay Rs 17909 lakh to the BMC in this financial year. "The balance amount is being paid off to the BMC in this month itself," said Sunil Ganacharya, member, BEST Committee.
The BMC had given them loan in October 2012 at an interest of 12 percent. In fact around 5 years ago, the banks too were disinterested in providing loans due to poor returns. Over the years the BEST is struggling to keep itself financially afloat. The BEST is using these loans to pay close to Rs 85 crore to its employees as salaries, Rs 100-125 crore for buying electricity and other expenditures. For the past three years, the BEST is taking loans even to give Diwali bonus.
As per the budget prepared by the BEST, the organisation has taken loan of Rs 2,14,000 lakh in 2018-19. These loans are being taken from various financial institutions, World Bank and different nationalised banks to pay off loans and other expenditure. Similarly they propose to take loans amounting to Rs 2,11,000 lakh in 2019-20.
This does not include short or long term loans from the BMC. The BMC has been asking the Undertaking to make plans and make itself self-reliant. "We are working out plans to commercialise and monetise our assets," said a BEST official. In 2019-20, the BEST will be paying principle amount of Rs 195873 lakh and interest of Rs 16221 lakh.
Consolidated loan account of BEST:
- As of April 2018: Rs 1,70,351 lakh
- Loan in 2018-19: Rs 2,14,000 lakh
- As of April 2019: Rs 1,51,722 lakh
- Loan in 2019-20: Rs 2,11,000 lakh
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