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BEST takes loans to pay March salary

Published On : 18 Apr 2017

Mumbai: The BEST Undertaking is taking bank loans of ?100 crore to pay the March salary of its 42,000 employees, according to general manager Jagdish Patil. “The BEST needs about ?185 crore per month, of which about ?81 crore is paid towards basic salaries. The rest of the money is spent on paying allowances, professional taxes, income taxes, and interests on credit borrowings of employees.”

The BEST has been ordered by courts to pay salary before 20th of every month. The need for the loans arose since the ?1,000-crore investment that the BEST is expecting from the Brihanmumbai Municipal Corporation (BMC), has not come. According to sources, municipal commissioner Ajoy Mehta had asked the BEST to implement the changes and show results before it could release the money.

Action plan

The BEST had submitted an action plan before the BMC, which included cost-cutting measures like trimming its fleet, cutting down on staff welfare allowances, freezing recruitments, and even reducing about 150 routes. The BEST has already shut down its AC bus service and is even cutting down on routes. There have been regular meetings between BEST officials, BMC, and group leaders (leaders of political parties in the BMC), but with no breakthrough.

The February salary too had been delayed and were paid through bank loans.“If the ?1,000 crore does come through, it will help the BEST pay off its loans and thus clear the annual debt servicing of ?250 crore,” said Mr. Patil. The BEST currently runs on an annual loss of ?1,000 crore.

Mini AC vans

After scrapping its fleet of 279 air-conditioned buses on April 16, the BEST is planning to introduce 22-seater mini AC buses. This proposal was introduced in the budgets of the last two years, but was ignored. Now, the administration is considering to re-introduce the proposal in the next BEST committee meeting scheduled later this month. If approved, mini AC buses could be seen on the streets in the next six months.

Unlike King Long buses, whose spares were bought from China and assembled in Jalandar, and which caused major revenue losses to the BEST, these buses will be got on wet lease.

“Since these buses are to be bought on wet lease, it won’t require any major investment by the BEST. Mini-AC buses would be run without conductor and devices would be fitted near the doors to swipe and enter and that would be managed by drivers,” said Mr. Patil.

New bus routes

A day after the AC bus service was stopped, the BEST introduced regular non-AC buses on those very same routes, to reduce inconveniences to passengers. The AC pass holders have been informed to either use their pass on regular buses or seek refund.

Lying idle

Incidentally, the BEST’s new fleet of 74 buses from Tata are waiting to be inaugurated by Shiv Sena chief Uddhav Thackeray. Of these, 37 buses have completed their registration, but have been lying idle for the past 20 days. With each bus earning an average of ?10,000 a day, it has led to a revenue loss of ?7.4 lakh so far.

The BEST is also getting a new fleet of 303 buses (including the 74 buses) of which about 185 regular buses and six electric buses are being bought for ?100 crore. “Had these buses plied on roads, they could have fetched much revenue. It is this kind of politicking that causes losses and should be stopped,” said Manoj Kotak, leader of the Bharatiya Janata Party .

“How can buses be allowed to lie idle, especially at a time when we are short of buses?” asked Ravi Raja, opposition leader of the BMC.

Meanwhile, the BMC Mayor has written to Union Heavy Industries Minister Anant Geete asking for ?16.5 crore for buying 10 non-polluting electric buses for the BEST.

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