The debt ridden Andhra Pradesh State Road Transport Corporation (APSRTC) is taking extreme steps such as mortgaging properties and witholding payments to suppliers to manage finances and pay monthly salaries. With Rs 40,000 crore worth properties in hand, there is no danger to the Corporation’s creditworthiness, a senior RTC official said.
Given the situation, there is a threat to payment of salaries to employees in the month of October, according to market analysts.
“Unless the government extends some financial help, the department might run into problems,” said an analyst.
However, the department says that there are other ways in place to ensure payment of salaries and meet other expenditure.
“We do mortgage our properties on regular basis for regular needs. This apart, we are also holding payments to our suppliers to ensure sufficient money with us to pay salary at the end of the month,” said the senior official who does not want to be identified. The corporation has been managing finances by mortgaging some its properties with different banks. These properties include the bus stations, empty lands and other facilities of APSRTC.
Adding to the debt
In a recent hit owing to the ongoing Seemandhra strike, the public transport has just added another Rs 650 crore loss to the existing Rs 4,200 crore debt which was piled up over the years.
Another bitter pill for the department is that it has Rs 290 crore annual liability in the form of payment of interest.
The Seemandhra agitation has impacted the transport department at the time the corporation has high potential to earn revenue according to its managing director Mr. A.K. Khan. “In view of Brahmotsavams in Tirupathi and Dussera festival, we requested the JAC to relax strike by a week but in vain. We clocked over Rs 650 crore loss during the strike.” The RTC makes additional revenue by running special services on these occasions every year.
Meanwhile, the private transport operators are making hey to make a quick buck in the absence of public transport. “These operators are charging double the amount yet the buses are in pathetic condition. But we are left with no option in the festival season,” said P Gangadhar, a passenger going from Hyderabad to Visakhapatnam.
“We do mortgage our properties on regular basis for regular needs. This apart, we are also holding payments to our suppliers to ensure sufficient money with us to pay salary at the end of the month.”
A senior RTC official