KTDFC stares at shutdown as losses bleed KSRTC's erstwhile financier

KTDFC stares at shutdown as losses bleed KSRTC's erstwhile financier
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Thiruvananthapuram: An entity formed to revive a perennially sick government undertaking itself is ironically is on its last legs!

The Kerala Transport Development Finance Corporation (KTDFC) was formed with the objective of giving loans for bringing the Kerala State Road Transport Corporation (KSRTC) out of the red, but today it is on the verge of dissolution because of the financial crisis.

Former KTDFC managing director M R Ajith Kumar had submitted a recommendation to the government for winding it up. The Principal Secretary (Transport) has forwarded the MD's recommendation for winding up KTDFC to the government.

The way to go

One of the major recommendations of the report was to completely stop raising investment and reducing the interest of mobilised investments to two per cent. 

According to current estimates, Rs 925 crore is to be paid back to the investors. Of this Rs, 353.89 crore is set aside in treasury and banks. The remaining Rs 572 crore has to be mobilized. 

The officials have recommended that money be returned to the investors with the help of government assistance and the bus terminal constructed on the KSRTC land be handed over to the KTDFC.

The KSRTC owes it Rs 356 on account of repayment of loans and Rs 469 crore has to be obtained from the government for transferring four bus terminals to the former.

The operations of KTDFC can be wound up by using this money to pay the investors. The employees can be redeployed in other departments, the report stated.

The report also suggested that KTDFC can be retained by running the business of renting out electric vehicles to the government departments on the lines of ANERT, an agency of the Kerala government.

Fleecing interest, huge losses

The KTDFC was set up in 1996 for facilitating loans for the KSRTC at a low-interest rate. Though the initial agreement was to give half a per cent more interest on the amount received as an investment, they had charged up to 16 per cent interest from KSRTC.

KSRTC stopped taking loans from the KTDFC four years ago. The terminal building constructed by KTDFC on BOT basis resulted in big financial loss and the existing uncertainty over the corporation.

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