BEST's accounting blunder: Plugs Rs 380 cr gap in budget in 30 mins
BEST had made a big accounting blunder in its 2016-17 budget; it had mentioned Rs 355 crore as grants from the BMC, which civic body cannot constitutionally pass before it clears its own budget
The entire BEST budget underwent a radical change in a matter of 30 minutes yesterday. The Undertaking made changes in its 2016-17 budget by Rs 380 crore and also made a last minute inclusion of Rs 25 crore as bonus for BEST employees.
Also read: 100 BEST buses need a body job
BEST’s transport division is underwater with the Undertaking expecting a loss of Rs 218.88 crore for the current financial year in passenger receipts. FILE PIC FOR REPRESENTATION
BEST had made a big accounting blunder in its 2016-17 budget. It had mentioned Rs 355 crore as grants from the BMC, which the civic body cannot constitutionally pass before clearing its own budget.
After an entire day yesterday — starting at 11 am — of discussion and debate over the budget by committee members from various political parties, it was at 7 pm that things became complicated. When the budget was being discussed, there was confusion between the committee members, BEST general manager Jagdish Patil, BMC standing committee chairman Yashodhar Phanse and other authorities. The budget showed a surplus of Rs 1 lakh.
At around 6.30 pm, Patil declared: "We have requested the BMC to provide us a grant of Rs 355 crore." That’s when Phanse was flummoxed. There were whispers and discussions in hushed tones between Phanse, Patil and BEST Committee Chairman Arvind Dudhvadkar.
"Let’s take a 5-minute break for tea," said Arvind Dudhvadkar at around 7 pm. That’s when the Congress and NCP members walked out in disapproval and those from the Shiv Sena, BJP and MNS went into a huddle in the chairman’s cabin.
Since morning, the political members of the BEST Committee from the MNS, Congress and Shiv Sena had been pointing out the issue and assuming this Rs 355-crore grant from the BMC would happen. "There is a technical issue with this grant," said Phanse before he left for the break.
As per the process, after the BEST budget is approved, it goes for approval to the BMC, which is done by December-January. "We don’t know our own budget so it is wrong to promise BEST a grant of Rs 355 crore," added Phanse. Unlike a loan, in a grant, BEST would not have paid any interest.
In between, members kept going back and forth from the commissioner’s cabin. The heads of department of BEST were waiting outside to know what was happening while those from the accounting department were inside. Finally by 7.30 pm, the long tea break ended. This kind of chaos has never been witnessed in BEST’s history.
In these 30 minutes, BEST had changed the entire budget running into crores of rupees. As per the revised budget, an additional expenditure of Rs 25 crore was shown as bonus towards employees. Earlier this month, after a break of 3 years, BEST had approved a bonus payout of Rs 25-30 crore for its employees.
Now came the time for some financial jugglery. BEST deducted the grant of Rs 355 crore from its expected income of Rs 6,641 crore and then adjusted it against the current earnings in the Transport and Electricity Supply divisions. It added Rs 280 crore to the Supply division and Rs 100 crore to the Transport division as anticipated earnings. The Undertaking has already approached the state government for levying transport cess on property tax, which, if approved, will earn it Rs 450 crore annually.
Presently, the Undertaking has a fleet of 4,167 buses as of April 2015 and daily passenger numbers are drastically fluctuating. Officials from BEST said that by the current financial year, they expect to scrap 234 buses. These include both diesel and CNG buses.
"These buses have crossed the age of 15 years and need to be scrapped. But in lieu of this we are procuring 30 ultra low floor diesel buses at a cost of Rs 65 lakh each," said a BEST official. However, this would take the fleet strength to 3,963 buses by March 2016, which would make it all the more difficult for the Undertaking as the number of passengers are also dropping.
In 2016-17, the Undertaking will be adding 351 single-decker buses wherein they would be buying 181 buses (at Rs 45 lakh each) out of a loan of Rs 100 crore from the BMC. "There is no mention about how the remaining 170 buses (at Rs 55 lakh each) would be procured. Moreover, there is a need for the administration to bring in attractive buses for people," said Kedar Hombalkar, BEST Committee member.
>> BEST ferries 30 lakh passengers daily, but this figure had come down to 27 lakh passengers a couple of months ago
>> The Undertaking is plagued by the poor service provided by the buses, frequent breakdowns, and perennially delayed buses running behind schedule
>> In the current financial year, the authorities would be scrapping 234 buses and buying 30, thus taking the total fleet to 3,963 buses
Sign up for all the latest news, top galleries and trending videos from Mid-day.comSubscribe