C Shivakumar @ CHENNAI:
Metropolitan Transport Corporation (MTC) is struggling to run its operations and is planning to enhance the limit of borrowing power from Rs 4,000 crore to Rs 4,500 crore.
Incurring a loss of Rs 8,342 crore and cash loss of Rs 7638 crore till April 2023, Metropolitan Transport Corporation financial position is becoming critical day by day. The Corporation is able to manage day-to-day affairs only with the borrowings from Government, Tamil Nadu Transport Development Finance Corporation (TDFC) and availing Overdraft from Bankers, it is learnt.
Sources said that operational and other revenue earned are not sufficient enough to meet out the daily payment to fuel companies. Despite this, the payments to depots for their maintenance are prioritized and met out according to the fund position of the Corporation to ensure full operation of buses every day, official sources said.
It is learnt that all the ordinary town services (White boards) are being operated and the daily travel of women in ordinary buses of MTC has considerably increased. As a result, the gap between the revenue and expenditure is widening month to month and in some days the revenue earned is not sufficient enough to meet out the daily payment to fuel companies and other variable costs, sources said.
The total loans outstanding including bank overdraft for the last nine years as on April 30, 2023 is Rs 3853.37 crore. The outstanding loan increased from Rs 1716 crore in 2018-19 to Rs 3853 crore till April 30, 2023. Sources said that there has been an increase in the outstanding loan from 2019-20 till date due to Covid-19.
To meet commitments like salary, pension to retired employees, interest to banks every month the MTC is availing loan from TDFC even after utilizing the subsidies such as student subsidy, women free ticket subsidy and Diesel subsidy. Hence the loan outstanding to TDFC is getting accumulated every month.
Every month, the shortfall in revenue is being managed by availing loans from TDFC as funds sanctioned and released for senior citizens and differently abled pass. This apart MTC has been postponing payment to credit societies, Life Insurance corporation and Postal Life Insurance etc to ensure the operations are run smoothly. But recently, there has been a setback. The Madras High Court in a recent judgement has asked MTC to pay the dues Rs 70.23 crores (as on March 2023) in 15 instalments. That is Rs 5 crore per month along with the current recovery of Rs 6.00 crore every month.
This has put MTC in financial stress. Now the monthly recoveries such as payment to Credit Societies, payment to LIC, PLI has to be paid mandatorily and also at the month end, the interest to banks has to be paid for overdraft and various term loans obtained. Apart from this, the financial requirement for salary payment has increased by Rs 2.50 crore per month since the dearness allowance has increased 4% additionally from May 2023.
As a result, MTC is seeking financial assistance from the government to comply with the direction of the High Court and close the old outstanding dues and current recoveries towards credit societies. It is learnt that the Transport department advised it to approach TDFC, which has sanctioned funds for the closure of old outstanding dues only and haven't sanctioned any fund towards the current recoveries of credit societies.
Sources said that a board meeting will decide to enhance the limit of borrowing power from Rs 4000 crore to Rs.4500 crore, sources said.
Metropolitan Transport Corporation (MTC) is struggling to run its operations and is planning to enhance the limit of borrowing power from Rs 4,000 crore to Rs 4,500 crore.
Incurring a loss of Rs 8,342 crore and cash loss of Rs 7638 crore till April 2023, Metropolitan Transport Corporation financial position is becoming critical day by day. The Corporation is able to manage day-to-day affairs only with the borrowings from Government, Tamil Nadu Transport Development Finance Corporation (TDFC) and availing Overdraft from Bankers, it is learnt.
Sources said that operational and other revenue earned are not sufficient enough to meet out the daily payment to fuel companies. Despite this, the payments to depots for their maintenance are prioritized and met out according to the fund position of the Corporation to ensure full operation of buses every day, official sources said.
It is learnt that all the ordinary town services (White boards) are being operated and the daily travel of women in ordinary buses of MTC has considerably increased. As a result, the gap between the revenue and expenditure is widening month to month and in some days the revenue earned is not sufficient enough to meet out the daily payment to fuel companies and other variable costs, sources said.
The total loans outstanding including bank overdraft for the last nine years as on April 30, 2023 is Rs 3853.37 crore. The outstanding loan increased from Rs 1716 crore in 2018-19 to Rs 3853 crore till April 30, 2023. Sources said that there has been an increase in the outstanding loan from 2019-20 till date due to Covid-19.
To meet commitments like salary, pension to retired employees, interest to banks every month the MTC is availing loan from TDFC even after utilizing the subsidies such as student subsidy, women free ticket subsidy and Diesel subsidy. Hence the loan outstanding to TDFC is getting accumulated every month.
Every month, the shortfall in revenue is being managed by availing loans from TDFC as funds sanctioned and released for senior citizens and differently abled pass. This apart MTC has been postponing payment to credit societies, Life Insurance corporation and Postal Life Insurance etc to ensure the operations are run smoothly. But recently, there has been a setback. The Madras High Court in a recent judgement has asked MTC to pay the dues Rs 70.23 crores (as on March 2023) in 15 instalments. That is Rs 5 crore per month along with the current recovery of Rs 6.00 crore every month.
This has put MTC in financial stress. Now the monthly recoveries such as payment to Credit Societies, payment to LIC, PLI has to be paid mandatorily and also at the month end, the interest to banks has to be paid for overdraft and various term loans obtained. Apart from this, the financial requirement for salary payment has increased by Rs 2.50 crore per month since the dearness allowance has increased 4% additionally from May 2023.
As a result, MTC is seeking financial assistance from the government to comply with the direction of the High Court and close the old outstanding dues and current recoveries towards credit societies. It is learnt that the Transport department advised it to approach TDFC, which has sanctioned funds for the closure of old outstanding dues only and haven't sanctioned any fund towards the current recoveries of credit societies.
Sources said that a board meeting will decide to enhance the limit of borrowing power from Rs 4000 crore to Rs.4500 crore, sources said.
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