The Corporations’ crisis has aggravated to the extent that pension for retired employees has not been disbursed for past two and a half months.

Who will rescue the Kerala State Road Transport Corporation from mounting liabilitiesRajesh Unupally, Wikimedia Commons
news Debt Friday, July 28, 2017 - 14:11

On the day of assuming office in April the visibly elated Transport Minister Thomas Chandy, who got the ministerial berth after his party colleague resigned, vowed that he would rescue the crisis-hit Kerala State Road Transport Corporation (KSRTC).

It has been three months since then. Widely defamed as a white elephant, the Corporations’ crisis has aggravated to the extent that pension for the retired employees has not been disbursed for the past two and a half months.

KSRTC operates 5,784 services a day on an average.  There are 36,000-odd employees and 38,000 retirees under the Corporation.

The daily revenue from the operations is around Rs 170 crore. In a month, the amount to be paid as salary to the permanent employees is Rs 65 crore. Rs 7-8 crore is required to pay wages to employees who have been hired on a temporary basis.

To settle the pension bill for a month the KSRTC requires Rs 30 crore. In a month the diesel bill of KSRTC comes to around Rs 56 to 60 crore. Buying spare parts cost Rs 9 crore a month. 

Then there is the loan liability of Rs 2,700 crore. Of this amount, Rs 1,300 crore was borrowed from the consortium of banks headed by SBT, now SBI. The loan was sanctioned in 2015 during the last phase of the previous Left Democratic Front government. “SBT, in fact, didn’t pay the loan. But repaid the short-term loan of the Corporation from various other banks,” a source said.

The loan repayment amount in a day to the consortium is Rs 54 lakh. The liability to repay the short term loans, for which interest rates are high, to Kerala Transport Development Finance Corporation, some district Cooperative banks and other financial institutions is Rs 1,200 crore. 

In a day, the repayment amount needed for the loan from these financial institutions is Rs 2.45 crore.

“The solution to do away with the liabilities is to take a loan that can repay the short-term loans from other banks from a bank or a consortium so that repayment amount would become less. There was a move to take such a loan with that objective during the time of the previous UDF government, but didn’t work out as corruption allegations were raised against that from some corners," the source added.

The pending pension arrears for the last two and half months amounts to Rs 70 crore.

The crisis is something which the Corporation can’t get rid off for the past several years and pensioners once took the protest to the street.

In May 2014, the pensioners had launched a 12-day long agitation when the pension was stopped for more than four months. A 65-year-old pensioner committed suicide which shook even the Assembly.  The pensioners went on a hunger strike by setting up a pandal in front of the Secretariat.

On Wednesday K Sukumaran Nair (72), a pensioner from KSRTC from Venjaramoodu in Thiruvananthapuram committed suicide allegedly due to the delay in getting the pension. In his suicide note, he had mentioned the struggle to support his family due to delay in pension payment. Bus staff ratio in KSRTC is 8:7, the national average is 5:5. Across the state reportedly 24 suicides have been recorded among pensioners in 2015.

In July 2014 the KSRTC had introduced ticket cess in return for insurance cover for passengers to generate additional revenue as an attempt to get rid of the crisis. But the cess led to variation in ticket fare with that of the private buses which ended actually reducing the revenue of the Corporation in the northern region.

The KSRTC has to operate certain services that are not viable because of its social commitments, which adds the burden. However, the latest development is that KSRTC has approached an SBI led consortium of banks for Rs 3,000 crore loan which was reportedly confirmed by the officials.  But a long-term solution to make the Corporation break-even is yet to be worked out.