Government to provide Rs.14 crore for the next two months and ‘absorb’ the additional fuel bill

The decision of the Cabinet to ‘absorb’ the additional fuel bill of the Kerala State Road Transport Corporation (KSRTC) has come as a relief to the loss-making State transport undertaking.

(The Union government had included KSRTC in the bulk-consumer category. The corporation now pays Rs.60.25 for a litre of diesel and hence the additional bill).

On a day when the Cabinet decided to give Rs.14 crore (a month) to the KSRTC for the next two months, the corporation was also able to pay pension to the 37,000 retired employees after a delay of 27 days.

The corporation utilised the Rs.20 crore that was allowed to be taken from the pension fund by the High Court and the Rs.10 crore that was already with the KSRTC to disburse the pension.

KSRTC needed 4.3 lakh litres of diesel each day and the purchase high speed diesel at this rate would incur an additional Rs.15 crore every month.

“It is a temporary relief to the KSRTC that has been exploring ways to find Rs.240 crore to make both ends meet till March. It may take more than a week for the corporation to get the amount,” official sources told The Hindu.

KSRTC owed Rs.11 crore to the Indian Oil Corporation (IOC) and Hindustan Petroleum (HP), the two State-owned fuel majors, towards the fuel bill on Monday.

It had exceeded the credit limit of Rs.7 crore fixed by IOC and HP. During the last nine days, KSRTC was spending only Rs.2.1 crore daily on fuel bill and it resulted in a 20 per cent drop in the purchase of diesel.

The corporation needed Rs.53 crore within days to pay salaries to and wage bills to the 40,180 employees. The only relief was that some of the staff had not opted for the pay revision implemented in January. Official sources said the corporation would not get help from the Kerala Transport Development Finance Corporation (KTDFC) as it had already taken a loan of Rs.1,580 crore, including Rs.1,200 crore for paying pensions, over the years. “If the government does not come up with a financial package, the corporation will find it difficult to stay afloat,” sources said.

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