After suffering revenue loss of over ₹4,000 crore, second wave poses further threat
The COVID-19 pandemic and the subsequent lockdown hit road transport corporations badly. Even when restrictions eased and the number of cases started to drop towards the end of 2020, RTCs were unable to bounce back.
In the last one year, the four corporations – KSRTC, BMTC, NEKRTC and NWKRTC – suffered a revenue loss of over ₹4,000 crore. The second wave of the pandemic poses a further threat to their revenue.
Karnataka State Road Transport Corporation (KSRTC) Managing Director Shivyogi C. Kalasad said, “In December 2020, COVID-19 positive cases started dropping. At the time, we hoped to recover from pandemic-induced losses, but now cases are surging again. Long-distance buses, especially inter-State services, continue to suffer heavy losses. Our buses are returning from Maharashtra and Kerala with hardly any passengers.”
He predicted that if the positivity rate continues to rise, there will be a further drop in ridership, resulting in reduced cash flow. “We may face further problems in meeting expenses, such as salaries of staff,” said Mr. Kalasad.
To ease the financial burden during the current 2020-21 financial year, which is drawing to a close, KSRTC did not induct new buses and stopped fresh recruitment. But such measures may not be feasible the second time around.
“We have to induct new buses and employ new people in the interest of the corporation. Buses that have crossed over 9 lakh km of operations need to be scrapped. We will take a decision on inducting new buses depending on availability of funds,” he added.
After the outbreak of the pandemic, KSRTC took a loan of ₹225 crore to pay pending arrears towards PF and gratuity. It also sought new revenue streams such as running buses to remote places. “We are operating 90% of schedules of non-air-conditioned buses, but most of the AC buses remain off the road. The corporation may be operating only around 35% of its AC buses,” he said.
In an effort to generate more non-fare revenue, the KSRTC, with NEKRTC and NWKRTC, introduced ‘Namma Cargo’ services in February. Corporations estimate that the parcel and cargo service will generate an additional ₹70 crore per year.
Not able to touch pre-pandemic ridership
The situation is no better for the Bangalore Metropolitan Transport Corporation (BMTC), which is in financial distress. Bengaluru accounts for a majority of cases in the State.
BMTC Managing Director C. Shikha said, “Public transport is one of the major areas which was impacted due to COVID-19. Before the pandemic, city bus ridership was around 35 lakh per day. Now, after a gap of over one year, we are nearing 21 lakh ridership. Due to the sharp drop in ridership and revenue loss, the corporations relied on the State government for funds to pay salaries of the staff.”
She added that BMTC has not made much progress in increasing ridership to pre-lockdown numbers. “One more factor that is adding to the woes of road transport corporations is fuel cost, which has seen a sharp rise in the last one year.”
Raising $100 million loan
For the first time, the BMTC is knocking on the doors of multilateral financial agencies to raise a $100 million (approximately ₹727 crore) in an effort to strengthen the organisation, induct new buses and digitisation.
“For the comprehensive development of the Corporation, the Board and the State government had given approval to raise loans. We had a very advanced stage of discussion with multilateral agencies on availing of funds,” Ms. Shikha added.
The BMTC has already raised a ₹200 crore loan from a nationalised bank to meet pending expenses.
In the coming days, the BMTC will induct 643 diesel buses. Work orders have been issued for the operation of 90 electric buses. “The induction of new buses will help increase ridership and revenue generation,” said Ms. Shikha.
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