BMC reduces funds to BEST, gives only Rs 1,500 crore

Updated: Feb 05, 2020, 07:52 IST | Rajendra B Aklekar | Mumbai

It has given Rs 1,500 crore as against Rs 1,941.30 crore last year; imposes strict conditions on performance in lieu of the grant.

A reduction in fare in 2019-20 led to an increase in average daily commuters using the service from 22 lakh to 33 lakh. File pic
A reduction in fare in 2019-20 led to an increase in average daily commuters using the service from 22 lakh to 33 lakh. File pic

The Brihanmumbai Municipal Corporation (BMC) has given funds of Rs 1,500 crore to the BEST Undertaking in its budget document, as against R1,941.30 crore last year. The grant has been given subject to strict performance conditions. The BMC has alleged that over the past few years, the BEST fleet did not cope with public requirements, which led to a growth in private vehicles. It claimed this has led to higher congestion and consumption of fuel, causing air/noise pollution and CO2 emission which is harmful to the environment in Mumbai.

'Strict conditions imposed'
Presenting the budget, BMC commissioner Praveen Pardeshi said, "To assist BEST to overcome its present financial crisis and to upgrade bus transportation systems, MCGM has given grant-in-aid of R1,941.30 crore during the year 2019-20. The provision for grant-in aid for next year is R1,500 crore. These funds shall be used for repayment of loan, procurement of new buses under wet lease, to fulfill financial obligations arising from wage agreement, day-to-day expenditures and implementation of the Intelligent Transport Management System (ITMS) project etc. Strict conditions on performance have been imposed on BEST in lieu of these grants."

He added, "To ensure the financial sustainability of BEST, the cost of operating buses has to be reduced by 10% to 15% per km. Currently, the cost of operating a BEST bus is about R130/- per km. With the induction of new buses under wet lease, this cost is expected to come down to R95/- per km."

He said that to shift passengers from private vehicles to public transport, a reduction in bus fare was undertaken to R5/- up to 5 km during 2019-20 leading to an increase in average daily commuters using the service from 22 lakh to 33 lakh. He said at present, 231 buses are operated on wet lease. By March 2020, 1,240 wet lease buses will be operated (27% of total buses). With the induction of these new buses, 45 lakh passengers will commute daily. This will account for 20% share of the total passengers.

Apart from reducing the cost per km of operations through these steps, BEST is also expected to increase revenue through better management of its leased properties and ensuring recovery of funds as per findings of the BMC. Another project to improve the financial strength of BEST is to undertake Hydro Power Generation Project at Middle Vaitarna Dam. This project will produce 25 MW power. The state government has approved this project.

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