Pay bus fare when you switch on the light!

Published: 30 November, 2012 06:00 IST | Shashank Rao |

With BEST having a monopoly on power distribution in the island city, consumers are left with no option but to pay the hefty charges quoted by it to cross-subsidise its loss-making transport wing

If you are an island city resident who’s never set foot inside one of its buses, Brihanmumbai Electricity Supply and Transport (BEST) Undertaking still wants you to pay the fare — at least partially.

The organisation has proposed a plan to recover a chunk of the deficit run up by its transport wing from its 10 lakh power consumers. The Undertaking has been in an acute financial mess for the past few years and recently obtained Rs 1,600 crore from Brihanmumbai Municipal Corporation (BMC) to stay afloat.

Records show that BEST has suffered a total deficit of Rs 1,190.48 crore between 2004-05 and 2008-09 from its bus fleet. The sum is in addition to the losses incurred during each year in this period. BEST yesterday presented its side at a public hearing before Maharashtra Electricity Regulatory Commission (MERC) and citizens who were attending.

“The electricity division of BEST has been cross-subsidising the transport wing for a while now. We are trying our best to bring down the cost and our power tariff in the long term will be very reasonable,” said OP Gupta, general manager, BEST.

Once upon a time BEST was considered the most economical power distributor when compared to Reliance Infrastructure and Tata Power. However, this equation will completely change in the years to come.

In 2012, the average tariff charged by BEST is Rs 8.91 per unit, including the transport deficit add-on. As per the business plan proposed by BEST, under the average multi-year tariff the per unit cost for a power consumer residing in the island city will escalate to Rs 10.85 in 2013 and Rs 11.39 in 2014. Unlike Reliance Infra and Tata Power, BEST has a unique problem of being an Undertaking that provides public transport and supplies electricity.

After waiting a long time, the organisation finally hiked its bus fares. It has also approached parent body BMC to allow a further Re 1 increase in the basic fare from April 2013, which is under consideration. BEST officials claim that once they manage to recover a part of this deficit, power tariff may come down again.

For instance, the average electricity cost is expected to come down in 2015 to Rs 9.98 per unit and to Rs 8.81 per unit in 2016. “The transport deficit charge will come down by
Rs 1.04 per unit, as we would have recovered enough money in the two years,” said a BEST official. In 2013 and 2014 the transport deficit tariff in the power bill will be Rs 1.54 per unit that would drop to Re 0.50 per unit in 2015 and 2016.

This added burden would certainly irk the common man who is already complaining about the high electricity charges. “Why should someone who doesn’t use the bus service of BEST pay for the deficit? It is not like they are providing excellent services,” said Kamlakar Shenoy, a resident of south Mumbai.

People also lament the lack of options as far as power distributors are concerned as BEST continues to have a monopoly. In fact, the Undertaking has approached Bombay High Court against a government scheme to allow Tata Power entry into the island city.

“There is no scope for open access (wherein other distributors can also supply electricity to people) as other suppliers have been barred from the city premises. People will be forced to pay whatever price is quoted by BEST,” said N Ponrathnam, a power industry expert.

While BEST distributes power to about 10 lakh consumers in the island city, the western and eastern suburbs are catered to by Reliance Infra (around 27 lakh consumers) and Tata Power (nearly 3.5 lakh patrons).

Incidentally BEST receives electricity supply from Tata Power. 

Do the math
Deficit incurred by BEST’s transport wing:
2004-05: Rs 205.02 crore
2005-06: Rs 149.90 crore
2006-07: Rs 261.08 crore
2007-08: Rs 267.74 crore
2008-09: Rs 306.74 crore
      Total: Rs 1,190.48 crore 

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