Cash-strapped BMTC mortgaged the Shantinagar Traffic and Transit Management Centre to raise Rs 160 crore from Canara Bank between October 2019 and February 2021 to pay off its debt. They are paying Rs 1.4 crore a month to the bank as interest. BMTC said this in response to an RTI application filed by a Mandya resident seen by The Times of India.
Previously, Deccan Herald reported that increasing financial stress had forced the four road transport corporations (RTCs) to seek loans from banks and multilateral agencies to meet the employee expenditure, especially to fulfil the provident fund (PF) deposits, at a time the pandemic has eroded their revenue generation.
Read: Cash-strapped RTCs seek to raise loan to meet liabilities
Bangalore Metropolitan Transport Corporation (BMTC) and Karnataka State Road Transport Corporation (KSRTC) issued requests for proposal notification seeking to raise Rs 230 crore and Rs 120 crore, respectively. Covid-19 pinned the corporations to a corner to such an extent that they sought government aid to pay salaries during the lockdown. The remining two corporations, North Western Karnataka Road Transport Corporation (NWKRTC) and North Eastern Karnataka Road Transport Corporation (NEKRTC) also issued requests days after.
Officials feared that the burden of accumulated losses, which stood at Rs 2,381.41 at the end of 2018-19, expected to double by the end of 2020-21 as limited earnings and rising expenditure has threatened the financial stability of the corporations.
Shantinagar TTMC was constructed in 2010 at a cost of around Rs 108 crore and is spread across seven acres consisting of a bus terminal, office spaces, commercial space, a parking lot, and several government departments.