Rising diesel prices hits RTCs; liabilities reach Rs 4,794 cr

Rising diesel prices amid stagnation in revenue have pushed the liabilities of the four state-run road transport corporations (RTCs) to a whopping Rs 4,794.4 crore as the government looks forward to asset monetisation to support the corporations.

The matter was placed before Chief Minister Basavaraj Bommai during a review meeting of the Transport Department’s implementation of the programmes announced in the budget.

The officials told Bommai that the financial crisis, caused by the pandemic, has worsened since March when the diesel prices were hiked by Rs 25 for bulk buyers.

The RTCs are the lifeline of Karnataka’s public transport system.

Of the four RTCs, Bengaluru Metropolitan Transport Corporation (BMTC) has the highest amount of liabilities at Rs 1,448 crore followed by the KSRTC (Rs 1,211 crore), NWKRTC (Rs 1,187 crore) and KKRTC (Rs 947.9 crore).

“It was communicated to the chief minister that the four corporations require Rs 366 crore per month just to pay the salaries of the employees. The chief minister understood the situation and assured the department of all the help from the government,” an official told DH.

The state government, the officials pointed out, has extended financial assistance of Rs 3,161 crore to the four RTCs in the last two financial years.

“We were beginning to see recovery till March. However, rising fuel expenses have pushed us back into a corner. We are once again dependent on financial assistance,” a senior official in an RTC told DH.

To a question, Transport Department secretary N V Prasad said the government is waiting for the report by the one-man committee of M R Sreenivasa Murthy.

“The chief minister has expressed keen interest in the revival of the RTCs and is looking forward to the report, which is expected to be submitted in the next two weeks,” Prasad told DH.

The report is expected to look into the best ways to monetise the assets owned by the four corporations and the ways to cut the expenditures.

Sources in the BMTC said the committee has looked into the possibility of converting old diesel buses into CNG buses as part of an effort to reduce expenses.