KSRTC to pledge Peenya terminal to raise bank loan?

Nischith N | NT

Saddled with huge losses and low revenue due to Covid-19 lockdowns and general aversion to taking public transport for fear of contracting the virus, many transport corporations are now pledging their commercial complexes as surety to obtain loans to keep afloat.

In the latest move, KSRTC which has pledged the Basaveshwara bus terminal at Peenya as a surety to get a loan. According to the reports, the transport provider had recently issued a public advertisement seeking a loan of Rs 220 crore from banks. The corporation sources confirmed that Canara Bank officials had recently visited the Basaveshwara bus terminal to process the loan.

“The corporation is facing financial stress following the pandemic lockdown and dip in earnings, especially on long-distance routes. So we issued a notification for loan requirements and decided to mortgage the property. Now the bank officials have visited the spot and we are waiting for further updates,” says a KSRTC senior official.

The Basaveshwara Bus Stand at Peenya has turned out to be a white elephant after the corporation invested a whopping Rs 40 crore to build and operate it in 2014. KSRTC’s hope of earning rent from commercial space leased o u t was dashed due to poor response.

However, pledging a property is not new for the transport corporations. BMTC had earlier pledged the Shantinagar commercial complex with the Canara Bank. A loan amounting to Rs 390 crore has been taken at an interest rate of 8.6%. This amount is being utilized to pay off provident fund dues of the employees.

NWKRTC had pledged a land measuring 16.39 acres in 2019-20 and has taken a loan of Rs 100 crore at an interest rate of 8%. In addition, the Kalyana Karnataka transport corporation has taken an amount of Rs 50 crore loans at an interest rate of 7.20% and the amount is being used for the PF of employees.

“As the state government gave Rs 2,958 crore to transport corporations during Covid, the salary and maintenance of vehicles was done. But for other contributions, a loan had to be taken. As we all know that transport corporations are not run on a profit basis. It is done for the service of society. So we had to take a loan,” the official explained.

This pandemic forced the Corporation to operate fewer buses and led to losses for the corporation. Out of 530 premium buses in its fleet, the corporation runs less than 330 buses since operations were allowed.

An official said even interstate services are proving to be unsustainable with Covid rules. But now KSRTC officials are working hard to ensure the increase in operating its premium buses as the State government recently ordered withdrawal of all Covid norms.