BMRCL seeks Rs 500 cr overdraft from banks

Beset by the losses due to the lockdown and faced with a delay in Phase 2 projects, the BMRCL is seeking Rs 500 crore overdraft from banks as it expects a delay in the release of funds by the government.

In its mandatory disclosure to the National Stock Exchange, the Bangalore Metro Rail Corporation Limited (BMRCL) has said it suffered Rs 74 crore loss in fare and non-fare revenue due to the shut down of Namma Metro in April and May.

Even before the lockdown, the BMRCL’s safety measures had limited the number of riders. In March, officials had expected the revenue to hit Rs 40 crore but the collection at the end of the month remained at Rs 24.35 crore. For 2019-20, the impact was marginal as the revenue touched Rs 430 crore against the target of Rs 445 crore.

The corporation will take the brunt of Covid in the present financial year not just because of revenue loss due to the shutdown but also because the recovery of operating costs is likely to be difficult in the near future.

Additional loans

As its labour force has left Bengaluru to their home states, the corporation expects the Phase 2 projects to be delayed by three to six months. However, it reiterated that some sections of the project, most likely the extension lines to Anjanapura and Kengeri, would be operationalised in the second half of 2020.

Stating that there may be lags in the release of funds by the government from “out of budgetary allocation”, the corporation states: “In anticipation of such delays, the BMRCL has approached some of the banks for sanction of overdraft (bridge financing) of Rs 500 crore to meet contract related payment obligations in a timely manner."

BMRCL Managing Director Ajay Seth clarified that it was not a cash crunch. "We have project funds and can use a small part for a few months to fund fixed cost like salaries, essential maintenance, etc. However, the project funds would have to be restored in due course," he said, explaining the need for bridge financing.

The disclosure notes that revenue generation would be difficult due to the strict social distancing measures even after starting the operations fully. The BMRCL has sought financial assistance from the government to meet its obligations in the near future.

To a question, Seth said the corporation's loss per month is about Rs 25 crore when the operations were stopped. "The government provides support for cash losses based on audited accounts. We got funds for losses up to 2018-19. Will get funds for 2019-20 (about Rs 40 crore for the whole year) during the current year," he added.