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Tuesday, September 22, 2020

Facing drop in revenue, BMC slashes financial aid to BEST by Rs 300 crore

Of the Rs 1,500 crore, BMC has so far paid Rs 500 crore, said BEST officials. However, amid the Covid-19 pandemic, the civic body has incurred losses worth Rs 4,000 crore this year. According to its projection, the losses could go up to Rs 14,000 crore this financial year.

Written by Laxman Singh | Mumbai | Updated: August 3, 2020 12:04:46 pm
mumbai city news, bmc, bmc revenue drop, BEST, BESt finacial aid slashed, bmc best financial aid, indian express news Civic officials said that last year, BMC had given a grant-in-aid of Rs 1,941.30 crore to the BEST. (File)

With a decrease in its revenue, the Brihanmumbai Municipal Corporation (BMC) is set to slash by Rs 300 crore the financial aid it is providing to its undertaking Brihanmumbai Electric Supply and Transport (BEST).

In the 2020-21 budget, then municipal commissioner Praveen Pardeshi had proposed in February to grant an aid of Rs 1,500 crore to BEST to deal with repayment of loans, procurement of new buses under wet lease, fulfil financial obligations arising from the wage agreement, day-to-day expenditures and implementation of the Integrated Transport Management System project.

Of the Rs 1,500 crore, BMC has so far paid Rs 500 crore, said BEST officials. However, amid the Covid-19 pandemic, the civic body has incurred losses worth Rs 4,000 crore this year. According to its projection, the losses could go up to Rs 14,000 crore this financial year.

“We have proposed a Rs 300-crore cut in the total financial aid proposed for BEST in the budget. Now, only Rs 1,200 crore will be given to BEST. The decision was taken following a dip in BMC’s revenue,” said an official from the finance department. Additional Municipal Commissioner (Projects) P Velrasu confirmed the development.

So far, over 300 buses on wet lease have been hired by BEST. In all, it was supposed to get 1,240 buses on wet lease.

Civic officials said that last year, BMC had given a grant-in-aid of Rs 1,941.30 crore to the BEST. The financial help was given with strict conditions – reduce the fare up to Rs 5 for distance up to 5 km and decrease the cost per km of operating buses by 10 per cent to 15 per cent, among others. Also, BMC had asked BEST to submit a financial management plan on making it sustainable.

In 2019, the BEST administration had demanded that the undertaking be given a separate financial aid to repay loans since it was paying Rs 25 crore as interest every month. This was accepted by BMC and by August 30, 2019, the civic body had paid Rs 1,136 crore to BEST.

The Rs 1,500-crore financial help offered to BEST had come after a three-year-long campaign run by activists and urban planners. A lifeline for commuters after local trains, BEST was facing debts and losses worth about Rs 2,200 crore in 2017. It even struggled to pay the salaries of its employees.

Six years ago, it used to ferry about 42 lakh passengers daily. By 2019, the number of bus services reduced and passenger count fell to 22 lakh.

Activists and urban planners like Vidyadhar Date, Hussain Indorewala and Kiran Nagarkar had run ‘Amchi Mumbai Amchi BEST’ campaign, demanding that BMC should provide financial aid to BEST. While former municipal commissioner Ajoy Mehta had refused to bail out BEST, he had agreed to give some aid to clear pending salaries of employees while imposing strict conditions for reforms. Between 2016 to 2019, BEST received Rs 267 crore as aid from BMC under Mehta.

Last June, then municipal commissioner Praveen Pardeshi decided to bail out BEST and provided an aid of Rs 1,900 crore to the undertaking to repay its debts and loans.

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