Loss-making BEST ask Maharashtra Electricity Regulatory Commission to revoke the 15% rollback announced on power tariffs in 2010 in the next fiscal
The Brihanmumbai Electricity Supply and Transport (BEST) may soon be ready to give its nine lakh power consumers in the island city a high-volt jolt with a shocking piece of news. The loss-making undertaking has proposed to the Maharashtra Electricity Regulatory Commission (MERC) to reinstate the 15 per cent power tariff -- which was rolled back in September 2010 by MERC -- with effect from April, 2012.
To pay off debt: Sources in the BEST said that the revision in tariff
would be a significant means for them to repay their loans
This seems to be a last-ditch effort by the undertaking to pay off the monthly interests on the loans that it has taken from various nationalised banks to keep itself afloat. The total amount of interest comes to about Rs 100 crore.
A few days ago, OP Gupta, the general manager of BEST, made a presentation before MERC, to illustrate the desperate need faced by the body to impose the 15 per cent tariff anew.
The proposal for reinstatement, if approved, would mean that residents and business owners in the island city would have to cough up more for electricity every month.
For instance, residents living in the island city (till Sion and Mahim) and consuming between 301 and 500 units of power every month, have to pay Rs 5.30 per unit. A revision of 15 per cent would mean that they have to pay 79 paise more per unit.
Those living in the suburbs, right up to Dahisar -- are supplied power by Reliance Infrastructure at the rate of
Rs 9.61 per unit.
The power supply division of the undertaking has reportedly been facing losses to the tune of Rs 250 crore every year, ever since the rollback was implemented.
Confirming that they have received a proposal, V Raja, chairman, MERC said, "They had made a presentation to us. It is a customary procedure for us to call for a public hearing on this now."
Sources in the BEST said that the revision in tariff would be a significant means for them to repay their loans. "Power tariffs and revenue generated from sale of bus tickets are our two chief sources of income. After the rollback of 15 per cent was imposed by MERC, we have been making more losses; this compelled us to take loans," said a senior BEST official.
To help tide over its penury, the BEST has applied for three different loans. This year, it took a loan worth Rs 225 crore from the Vijaya Bank, and another of Rs 200 crore from Canara Bank: both to pay salaries to BEST employees, purchase electricity and maintain its fleet of buses. Besides this, the body has also taken a long- term loan of Rs 1,500 crore from the Canara Bank, to repay the two annual loans.
"We made it clear that the 2,000-odd buses shouldn't be mortgaged, and that post-dated cheques be given out against the loan," said Ravi Raja, BEST Committee member.
BEST has accrued losses of Rs 3,500 crore, as around 450 of its buses lie idle inside depots, neglected owing to the lack of sufficient funds to maintain them. The undertaking is obtaining the loans at an interest rate of 10.75 per cent. The BEST committee has approved these loans, and funds from the same should start pouring in from January 2012.