Thiruvananthapuram: The Kerala State Road Transport Corporation is a lesson for management students on how not to run an organization.
Now in its last lap, the huffing and panting corporation owes Rs 3,046 crores to various banks and financial institutions.
The KSRTC has availed bank loans by mortgaging its 54 profit-making depots, including Thiruvananthapuram city and Guruvayoor. Even as the KSRTC keep making losses, the Kerala Transport Development Finance Corporation has been reaping an interest of Rs 12 crore from the transport behemoth. The finance firm has loaned an amount of Rs 700 crore to the corporation.
The KSRTC has also availed a loan of Rs 1,290 crore from a nine-bank consortium led by the State Bank of India. The corporation will be stuck in this debt-trap until 2027.
The corporation has been making a loss of Rs 136 crore a month, and the loans were availed to pay the salaries and pensions of its present and former employees.
The previous ministry had taken the decision to form the consortium, so that protests over non-payment of salaries and pensions could be quelled. The loans were availed by mortgaging to banks the revenues from various depots.
The move, however, made the corporation nosedive into a serious debt trap, even as it did not make any serious efforts to ramp up its revenue.
The KSRTC is now paying an interest of Rs 13 crore a month as interest to the consortium. The other day, the corporation mortgaged one more depot to KTDFC for a loan of Rs 50 crore. The loan was availed to clear the dues of November.
The KSRTC has so far mortgaged 27 depots to the consortium. It has also mortgaged four bus depots to cooperative banks in Palakkad and Ernakulam, another four to HUDCO and one to Power and Infrastructure Corporation. The revenues from the mortgaged depots go to the respective banks, meaning the corporation gets the revenues from about 30 smaller depots out of its total 102.
The corporation has now been getting its revenue of Rs 141 crore from 58% ordinary services and 52% super class schedules. Takings from KURTC (Rs 13 crore) and Cess (Rs 6 crore) add up to a total revenue of Rs 160 crore.
The corporation needs Rs 60 crore to pay the interests of loans and another Rs 155 crore for salaries and pensions. Another Rs 111 crore is required for fuel, oil, spare parts, settling compensation claims and other expenses.
The only financial aid the corporation receives is the pension share of Rs 28 crore, whereas its monthly expense is Rs 324 crore.
In short, the corporation is running on a deficit with revenues of Rs 161 crore and a monthly expense of Rs 296 crore. While financial institutions including KTDFC reap profit from the corporation, it runs on a loss of Rs 136 crore.
Highlights
--The KSRTC took a loan of Rs 243 crore from Ernakulam and Palakkad cooperative banks to pay the salaries for January, February, August and October.
--The RTC paid the salaries for the months of March, April, June September and November by availing Rs 310 crore from KTDFC.
--It took another loan of Rs 190 crore for clearing the salaries for the months of May, July and September.