BEST seeks financial help of Rs1,350 crore

The Brihanmumbai Electric Supply and Transport Undertaking (BEST) is facing a serious cash crunch. The cash crunch is so severe that, in spite of it continuing to pay interest on present financial obligations, the administration is planning to seek a further “short term financial assistance” of Rs1000 crore and an increase in “overdrafts/cash credit limits facility” from Rs225 crore to Rs350 crore.

The Rs1350 crore is being sought ostensibly to meet the shortfall in cash requirement, as per BEST estimates, until December 2011. A proposal regarding the same will soon be discussed before the committee members.

BEST committee member from the Congress, Ravi Raja, said, “We will demand presentation of a financial white paper. Why is there such a colossal financial mismanagement? And how will they pay back?” In its proposal for seeking financial assistance, a copy of which is with DNA, the administration has argued that before the promulgation of Electricity Act, 2003, financial surplus earned from its electric supply division was used to fund  the operations of its transport division as the latter invariably incurred losses. But, after 2003, when the right of deciding tariff went to the MERC and cross-subsidy was discontinued, the administration found it difficult to meet the expenses of transport division.

The increases in establishment and fuel costs only added to the troubles. The overall deficit of the undertaking has increased too. The “accumulated deficit” of the undertaking stood at Rs2406 crore in late March this year.

BEST General Manager O.P. Gupta was unavailable for comment on the issue.