It’s now the turn of Bangalore Metropolitan Transport Corporation (BMTC) to search for land to act as temporary “dump yards”.
With nearly 800 buses lying idle in congested depots and mechanical workshops, the transport corporation is looking at two places to shift them. The move comes after the “usual procedure” of scrapping buses hit the Goods and Service Taxes (GST) obstacle. The problem is expected to get bigger as another 500 buses will be rendered non-functional by the year-end.
“The scrap value being quoted is too low because of GST and demonetisation. If we sell at this price, we will get into trouble with government auditors. Instead, to free up space in these workshops and depots, we will just dump these buses in two identified areas,” Transport Minister H.M. Revanna told The Hindu . The scrapping of the buses will be compensated by the induction of 1,500 buses by March, while 90 Volvo buses which had been lying idle owing to mechanical problems will be repaired and pressed into service.
On an average, the BMTC used to get between ₹2 lakh to ₹3 lakh each for scrapped buses. “We can only sell them at a maximum of 20% below the price we got for scrap last year. But, owing to 28% GST for scrap, the dealers are quoting prices that are very low. We are looking for government land in areas where the depot is not yet inaugurated to park these buses until the market stabilises,” said V. Ponnuraj, managing director, BMTC.
The problem extends to Karnataka State Road Transport Corporation (KSRTC), which for the third time has called tenders for the scrapping of 1,000 vehicles. “This time at least there is some response from scrap dealers. But as the tenders are in process, we are not sure of the price,” said S.R. Umashankar, managing director, KSRTC.
Scrap market down
Since the launch of GST in July, scrap dealers have found the tax they pay for buying and selling metal has gone up to 28% from 14.5% previously. This extra amount is cut when buying scrap metal, explains Altaf Hussain, owner of Bangalore Scrap Mart Incorporation. “We process scrap and sell it to furnaces and recyclers at ₹19.5 a kg. But, because of GST, we get just ₹12 a kg in return. Keeping aside labour and other costs, we can only offer less than ₹11 for scrap,” he said.
With prices crashing, since July, scrap merchants like him have seen a dip of around 70% in volumes being handled. With taxes expected to remain at the same level and with little input credit for the taxes paid, scrap merchants said the price would continue to remain low in the future.
Plan to revive Peenya bus station
By having local buses ply from the modern Peenya bus station, the State government hopes to revive the fortunes of the three-year-old bus stand that remains sidelined.
Situated 1 km from national highway and the nearest metro station, KSRTC’s Peenya bus station — conceived to be the hub for buses going towards Mangaluru and Mumbai — is languishing because of little patronage. “We will develop it like a local bus hub, with direct BMTC buses from other parts of the city to Peenya. Once this happens, and commuters can access the bus stand, we can make it a hub for outstation trips and de-congest the Kempegowda bus station area,” said Transport Minister H.M. Revanna.
A joint inspection is scheduled soon, following which services will be started, he said.
