Not in BEST shape: Losses & expenses mount, earnings fail to keep pace

The BEST has incurred a 92 per cent growth in salary payouts of the employees. No significant rise from ticket fare earnings have added to the woes.

Written by Neha Kulkarni | Mumbai | Updated: June 4, 2016 2:19 am
mumbai, BMC, make in india week, PM Narendra Modi, MTDC, MMRDA, NSCI, mumbai news The BEST has incurred a 92 per cent growth in salary payouts of the employees.

Despite running in losses of over Rs 900 crore, the expenditure figures of the Brihanmumbai Electric Supply and Transport (BEST) undertaking, which runs the bus fleet in Mumbai, has not witnessed a significant reduction in the past six years. In fact, the expenditure costs of the transport department has considerably increased in comparison to the income it has generated.

According to the figures, the Brihanmumbai Municipal Corporation (BMC)’s BEST, popularly known as BEST buses, has witnessed a 140 per cent increase in the deficit figures since 2010. The loss figures of the transport department amounts to Rs 950 crore in 2015-16 in comparison to around Rs 400 crore in 2010-11. On the other hand, there has only been a slow growth in the income earning of BEST from Rs 1,123 crore in 2010 to around Rs 1,412 crore in 2015-16.

The BEST has incurred a 92 per cent growth in salary payouts of the employees. No significant rise from ticket fare earnings have added to the woes.

“The BEST had signed a MoU with BEST workers’ union in 2012, where a significant hike in salaries and Dearness Allowance (DA) of the employees was agreed upon. The BEST has almost spent more than Rs 400 crore in paying the Dearness Allowances of employees for the past six years. Since then, the department has only witnessed a rise in losses with no considerable increase in income generating capacity,” said Sunil Ganacharya, a BEST committee member.

The passenger receipts of BEST transport have grown from Rs 1,006.45 crore in 2010-11 to Rs 1,329.88 crore in 2015-16 as compared to the overall expenditure figures has grown from Rs 1,523.93 crore in 2010-11 to Rs 2,364.90 crore in 2015-16.

Attributing failure in providing efficient transport facilities, Kedar Hombalkar, BEST committee member, said, “No one can deny that BEST bus services are poor in quality and holds no significant punctuality record. Upon that, if the BEST is planning to incur huge expenditure on marketing its services or re-designing the buses, it will fail to garner any necessary attention. What BEST really needs to do is improve upon its quality and efficiency of service so that more commuters can be attracted to ride in the buses.”

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However, post 2014, BEST has claimed that it has taken several economic measures to curb the losses incurred. Among them, reducing the fleet of buses and strength of employees to make-do with the income generated were some.

“In the past two years, BEST ensured of curtailing as many unnecessary losses in the annual budget prepared. 1,700 employment posts have been scrapped by the organisation, which we thought were unnecessary. We are further relying on funds from Asian Development Bank of around Rs 400 crore to help increase our services outside the city premises,” said Sanjay Bhagwat, Additional General Manager, BEST.

However compromising upon the quality of service remains the major complaint of the other BEST committee members. “In the past 4 to 5 years, at least 3,000 workers have either retired or been removed from their positions and no replacements have been hired. Moreover, it is being observed that BEST is trying hard to get more work done with a lesser number of employees. As a result, a significant rise in the number of material problem or bus services were recorded.” Ganacharya said.

Members also alleged that BEST has purchased equipment, which cost lesser or from lesser known companies to save upon the costs incurred. However, such compromises have resulted in faster depreciation of instruments, which have further affected the efficiency of BEST services.

The BEST also pays at least Rs 250 crore interest to various organisations from which loans were taken to run the department. The undertaking, which has taken a loan of more than Rs 3,000 crore from banks or the BMC in the past also repays them every year at an interest rate of 10 per cent.

In comparison, the power supply department of BEST has witnessed a considerable increase in its surplus figures. So much that BEST had to use almost Rs 2,400 crore generated from the Transport Deficit Loss Ratio earnings of the power supply by BEST to cover up for transport.”

“With the increase in dependence of commuters on Metro, Mono Rail and other transport services, there is no way in which BEST is going to make losses lesser than Rs 700 crore every year if commuter count does not go up or measures are not taken to better services. Thus, implying dedicated lanes, starting feeder routes and reducing ticket fares in areas with more competitive modes of transport can be some measures adopted,” Hombalkar added.

Receiving grants from the BMC without an immediate burden to pay back the amount has been the constant demand of BEST. The organisation ferries at least 30 lakh commuters daily at present from around 45 lakh commuters, a few years back. The number of BEST services has reduced to 3,600 from 4,500 in the past, which run on more than 500-plus routes.

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