The Mamata Banerjee Cabinet on Friday approved a proposal to merge three of the State’s loss-making transport undertakings. Since taking over in May last year, the cash-strapped government had been in a bind over running the loss-making entities. Salaries and other statutory payments had also become irregular.

The matter became sensitive after suicide by an employee in February this year following an indication given by the government that subsidies might be phased out in the five State-owned transport corporations.

While there was no official briefing on Friday’s proposal, the move reportedly was aimed at utilising the vast real estate assets now lying locked with these three undertakings for which the government foots an annual subsidy bill of around Rs. 500 crore.

The three entities are the Calcutta State Transport Corporation (which runs a fleet of 834 buses); the Calcutta Tramways Corporation (which runs 645 tramcars and buses); and the West Bengal Surface Transport Corporation (which runs buses and ferry services across the Hooghly river). The employees at these three corporations total 12,158 with over 400 casual employees.

It was learnt that in 2011-12 the earnings of these three stood at Rs 130 crore against an expenditure of Rs 498 crore, resulting in a deficit of Rs 368 crore. These three corporations have a total 118.1 acres lying idle with them and it is proposed to unlock the value of this idle asset in a bid to run the corporations profitably. The Government is planning to appoint a consultant from among its empanelled ones to advise it on the way forward.

“In case any employees are identified as surplus, they will either be offered a voluntary separation scheme or may even be deployed at the Transport Department,” said an official.