Undertaking plans to levy transport cess on its electricity consumers to recover losses worth Rs 5,537 crore incurred by its transport entity
Start monitoring your electricity consumption from now on, as it is likely to burn a massive hole in your pocket when you pay the next electricity bill.
In May 2015, BEST had proposed to levy transport cess in the property tax and the proposal is pending with the BMC for implementation. File pic
To stem the ever-mounting financial losses, the Brihanmumbai Electric Supply and Transport (BEST) tabled a proposal before the Maharashtra Electric Regulatory Commission (MERC) to recover the deficit of a whopping Rs 5,537 crore from Mumbaikars by levying ‘transport cess’ for the next four fiscals. In a proposal, submitted on February 15, the BEST undertaking has mentioned a couple of options to break even.
Under this option, the BEST wants consumers of all the power distributors — namely Reliance Infra, Tata Power and Maharashtra State Electricity Distribution Corporation Limited (MSEDCL) — to share the burden of its losses.
At present BEST serves 10 lakh consumers, RInfra supplies to around 26 lakh, Tata Power to over 5 lakh and MSEDCL supplies electricity to a few thousand in Bhandup and Mulund. “Our buses operate not only in the island city, but across suburbs. Currently, losses incurred by transport division are borne by the island city. So we have suggested that even suburban Mumbai pay for it,” said a BEST official.
According to BEST officials, if the cess is levied for the next four fiscals, starting 2016-17, then the average Transport Division Loss Recovered (TDLR) would be R1.50 per unit in the first year and would rise to R3.51 per unit by 2019-20. This additional charge behind every unit consumed would be added to the final electricity bill.
“BEST buses serve Mumbaikars across city. So sharing its transport losses amongst other power distributors is the most logical thing to do. The state government needs to look into this proposal because only they can help us now,” said a senior BEST officer.
Even the BEST committee members want the state and the Chief Minister to intervene. In the past, the Committee had lambasted the BMC and state for neglecting the undertaking’s plight. Sources claimed despite falling under two separate ministries — Transport and Power — neither of them have shown interest in reviving the ailing entity.
Implementation of the second option mentioned in the proposal is likely to do more harm than good for the BEST. The Undertaking claimed that if the transport cess is levied only on 10 lakh BEST electricity consumers, then the average cost per unit would rise by Rs 3.01 in 2016-17 and will go up to R8.73 per unit by 2019-20.
Currently, the Undertaking levies TDLR from 0.55 paise to R1.85 per unit on its existing consumers. Sources said the undertaking has earned R2,300 crore in the last three years since it first added TDLR to the electricity bills.
While the BEST believes that introducing transport cess in the electricity bill is the surest way to break even, the proposal is giving nightmares to the political class, especially with civic polls just a year away. From holding protest marches to sitting on fast outside BEST headquarters, politicos are pulling out all stops to oppose the addition of the transport cess in electricity bills.
“If the proposed cess is approved, then people will throw rotten tomatoes at us. We will surely meet the Chief Minister. The government should consider having this charge levied on property tax, as it will eliminate the need of levying the TDLR,” said Akash Purohit, BEST committee member from BJP.
In May 2015, BEST had proposed to levy transport cess in the property tax and the proposal is pending with the BMC for implementation.
Like BJP, representatives from the ruling Shiv Sena are against the transport cess. “We weren’t kept in the loop about TDLR making a comeback. The existing TDLR was expected to end from April 2016. We want the administration to withdraw this proposal,” said Sunil Ganacharya, BEST Committee member from Shiv Sena.
Even the Opposition is against the move. “We are unnecessarily burdening 10 lakh people of the island city. Now that we have recovered R2,300 crore from them, levying another surcharge is unethical,” said Ravi Raja, BEST Committee member from Congress.
Meanwhile, MNS has threatened to take legal recourse and hold protest rallies against the implementation of cess. “We ask people to vote for us and now we are unable to save them from this unjustified TDLR. We will hold mass protest rallies if the proposal isn’t withdrawn,” said Kedar Hombalkar, BEST Committee member from MNS.
If the opposition against cess was not enough, politicos have gone to the extent of suggesting the undertaking to shut down services if the state doesn’t intervene and provide monetary assistance. They also accused the state of exhibiting apathy towards a vital mode of public transport.
“We want the TDLR to be shared by all consumers of Mumbai falling under the BMC. We had made few suggestions, but these are long-term measures. Hence, we are forced to levy TDLR. We met BMC authorities twice to discuss cess on property tax, but nothing happened after that,” said Jagdish Patil, general manager, BEST.
Arvind Dudhvadkar, BEST Committee chairperson, said, “I had sought CM’s appointment to resolve the issue. For now, I have ordered the BEST administration to withdraw this proposal.”
Average additional amount BEST electricity consumers will have to shell out
Average additional amount to be paid upon implementation of cess
Number of users consuming BEST electricity
Number of Rinfra, Tata Power and MSEDCL consumers across Mumbai