With no provision in its budget, the Brihanmumbai Municipal Corporation (BMC) has dipped into its reserves to help the Brihanmumbai Electricity Supply and Transport (BEST) repay its loans. The BMC said it used money from three fixed deposits (FD) to bail out BEST.
A BMC statement said that between August 19 and 30, it paid Rs 1,136 crore to BEST, of which Rs 478 crore came from breaking three fixed deposits. “These FDs were withdrawn from the State Bank of India account prematurely. It was done to ensure that BEST’s transport wing will become debt-free. There was no provision in the BMC budget 2019-20, so we had to use some other way to provide the help,” said a senior official from the civic body’s chief accountant department.
While the BEST has already made the payment, the issue had come up for post-approval in the Standing Committee Monday.
In June, BEST had written to the BMC asking for Rs 1,200 crore to clear its debt. BEST was paying about Rs 25 crore as interest, at 9 to 11 per cent rate on the debt, every month. So BEST had requested to clear the debt to improve the financial position of the transport wing. So far, the BMC has given BEST Rs 2,100 crore in financial aid.
However, the BMC’s finance department had raised questions over BEST’s failure to provide details regarding the utilisation of funds. Opposition leader Ravi Raja also raised this issue, saying, “The BMC has broken three of its fixed deposits to help BEST. But BEST is not giving an account of money it has used. Why bail out an undertaking which is not serious about people’s money?”
Meanwhile, the Standing Committee has cleared about 50 proposals amounting to a total expenditure of Rs 600 crore. Before the model code of conduct kicks in ahead of Assembly elections, the BMC cleared a slew of proposals for development projects.