The revival package chalked out by the Kerala State Road Transport Corporation (KSRTC) to overcome its pension liability, heavy loan burden, problems with routes, and lack of automation has had got the government nod.
The revival package and the road map for its implementation, submitted by corporation Chairman and Managing Director K.G. Mohanlal, have been given administrative sanction, official sources told The Hindu.
The corporation has been given the nod to go ahead with the Life Insurance Corporation of India’s proposal for a permanent solution to pension payment to retired personnel, for which the KSRTC needs Rs.37 crore a month. The LIC has suggested payment of Rs.500 crore this financial year, and subsequently Rs.480 crore every year for 12 years to overcome the burgeoning liability. The KSRTC has been asked to furnish a firm proposal.
The LIC’s willingness to take over the Rs.1,300-crore loan provided to the KSRTC by the Kerala Transport Development Finance Corporation (KTDFC) at 10 per cent interest and repayable in 15 years has got approval. The KTDFC had given Rs.1,300 crore at 14.5 per cent interest with payback period of five years and monthly repayment of Rs.40 crore.
The conversion of government loan amounting to Rs.890 crore as equity has got the nod. The KSRTC has equity of Rs.525 crore. It has been asked to consider the proposed conversion after implementing internal restructuring and the revival package. The utility has been asked to submit a proposal as a “policy matter” to the government on the pension cess for tickets above Rs.25.
The KSRTC expects Rs.50 lakh from the proposed fare revision. It hopes to obtain another Rs.50 lakh through route and trip management, which is to be placed before its board. Through this, the utility plans to achieve the break-even figure of Rs.6.7 crore a day. Schedule modification, route rationalisation by combining nationalised and private routes, cash compensation for additional duty to reduce average employees per bus from the current 7.8 to national average of 5.5, and rationalisation of trip have been mooted for increasing the revenue.