A revival plan is on to rescue the transport utility from its debt trap and increase revenue.

Every crisis, they say, is an opportunity. The bigger the crisis, the greater the opportunity. That is, if you take the bull by the horns and come on top of the situation. The adage should have worked for the Kerala State Road Transport Corporation (KSRTC), one of the oldest public transport utilities in the country, several times over. For, the past few decades have been a roller-coaster ride for the utility, from one crisis to another, with no opportunity showing up or being urilised. As the Corporation stares at perhaps its worst financial crisis in its 79 years of existence, the question that should be uppermost in the minds of all who care should be simple: Will it make it this time?

With a fleet of 6,000 stage carriers, 44,000 employees and 40,000 pensioners, the Corporation is huge in terms of its size and scale of responsibilities to itself, not to speak of its commitment to provide hassle-free and timely travel facilities to an increasingly commuting population. As things stand, the Corporation is dependent almost entirely on the increasingly reluctant ventilator support from the government for its survival. For years, it has been a journey through a dark tunnel for the Corporation, but a faint glimmer of light appears nigh, if it can shed the accumulated flab, both in terms of workers and work ethics, and gather speed in an increasingly competitive market.

An effort seems very much on, both with the Pinarayi Vijayan government and the KSRTC management putting together a revival plan aimed at bringing down the Corporation’s liabilities, increasing its revenue, modernising the fleet, making the utility more passenger-friendly and making the employees more accountable and injecting greater professionalism into its running. With a total liability of ₹ 2,936.60 crore, resulting from repeated borrowings from banks and other financial institutions to clear salary and pension dues and meet operation costs, and an all-time revenue-expenditure gap of ₹154 crore, that is easily quite unlike the many tall orders that the Corporation management was faced with in the past.

Number-crunching

The KSRTC fleet currently fetches only ₹5.5 crore in revenue daily against operational expenses totalling ₹11 crore. From the daily revenue, the Corporation has to set apart ₹3 crore to service its ₹2,936.60 crore debt. Every month, the Corporation must raise ₹85 crore for paying salaries and allowances and another ₹60 crore to pay pension. The KSRTC management’s effort now is to find a one-stop solution for the mounting debt burden so that it would have sufficient breathing space as it takes up the huge task of reviving the Corporation. But there is a catch here. It has next to nothing left to mortgage as security for the massive loan that it is looking forward to.

Of the 93 depots of the KSRTC across the State, 53 have been pledged over the years for taking loans. The Transport Bhavan, headquarters of the KSRTC at East Fort in the capital, and the Regional Workshops at Pappanamcode, Aluva, Mavelikara, Edappal and Kozhikode, the modern bus terminal at Thampanoor, the fulcrum of the fleet’s operations in the State, and the upcoming bus terminal at Eenchakkal on the side of the NH 66 bypass in the capital and much of the 172.90 hectares of land in prime spots in the 14 districts of the State on which these facilities are situated have all been mortgaged.

The money recovered from the salary of the employees towards vehicle and housing loan repayments and insurance premium are being used to honour the commitments of the Motor Accidents Claims Tribunal (MACT), spare parts dealers and oil majors. During the tenure of the last UDF regime, ₹1,486 crore was pumped into the KSRTC. The government had also picked up half of the pension bill during the period. The efforts to shore up revenue by starting ATM counters, courier service and bus terminals at Thampanoor, Tiruvalla, Angamaly and Kozhikode in partnership with Kerala Transport Development Finance Corporation (KTDFC) have proved disastrous. The loan taken from the KTDFC is already a major headache for the utility. The government has asked Sushil Khanna of the Indian Institute of Management Kolkata to study the KSRTC’s operations, financial, HR and inventory management, but the Corporation management has already begun a series of measures to tone up the administration and generate more revenue.

Work hours

As part of these, the operating crew of 15,611 drivers, including empanelled hands, and 16,393 conductors, have been asked to work for eight hours a day as the management has found that they were working only for four-and-a-half hours earlier. “As much as 96,000 hours were missing each day on account of this and we could operate only 5,000 buses from the fleet. Under the new duty roster, we are able to operate 500 more buses and it fetches ₹42 lakh additionally every day. The fleet utilisation has also gone up from 78% to 87%,” says KSRTC chairman and managing director M.G. Rajamanickam.

The new duty roster has not gone down well among the trade unions, and the INTUC-affiliated Transport Democratic Front (TDF) has approached the Kerala High Court questioning it. The CITU-affiliated Kerala State Road Transport Employees Association (KSRTEA), the other recognised union, has also come out against the new duty roster. Those on the administrative side have also been asked to work one hour extra daily and to report for duty on second Saturdays, a holiday for government employees in State. “The empanelled staff are the worst hit by the new duty pattern. A driver on duty for eight hours gets only ₹450 and conductor ₹430 as wages. Many have begun to leave as the wages are low and there is no guarantee of getting work everyday,” points out TDF working president R. Sasidharan. C.K. Harikrishnan, general secretary of the KSRTEA, says the new duty pattern has proved a blow to the operating crew.

New duty roster

The new duty roster could just be a sign of bigger changes in the offing in the Corporation where the trade unions had been running the show and dictating terms to the management over the years. The transfer of 137 drivers and 129 conductors and sacking of another 150 empanelled crew who had participated in the strike by AITUC-affiliated Kerala State Transport Employees Union and BMS-supported Kerala State Employees Sangh is being described by some in the Corporation as a sign of the management’s determination to put things in order.

On the fuel front too, the Corporation is experimenting with daily settlement of fuel bill based on actual fuel used. The fleet needs high speed diesel costing ₹3 crore daily. With the new system, the Corporation has been successful in keeping the fuel bill under control. And, taking a cue from the airline industry, the KSRTC is planning to go in for wet-lease of multi-axle buses for operating long distance services within the State and on inter-State routes. Talks are on with the Swedish automobile giants for long-term wet lease. While the utility will provide the conductor and high speed diesel, KSRTC will have to take care of maintenance and provide the driver. The maintenance of 20 multi-axle Scania buses procured by KSRTC is being done with the help of outside agencies. The KSRTC is also going in for fleet augmentation by purchasing 850 buses at a cost of ₹ 300 crore using the funds of the Kerala Infrastructure Investment Fund Board (KIIFB). But the real trick might lie in reduction of the high bus-staff ratio from the present 8:5 in KSRTC to the national average of 5:5.

Loan sought

The Corporation management admits that all these toning up measures would prove really beneficial only if their efforts to raise a ₹3,000 crore loan from a consortium of banks led by the State Bank of India proves successful. “We are seeking the loan with a 20-year repayment period at a reduced interest rate so that we can bring down our interest burden from the present 10.5% to 12.5%. We should then be able to bring down the daily repayment from ₹3 crore to ₹1 crore. The saving of ₹2 crore daily will result in a saving of ₹60 crore a month, which can be used to pay salaries, wages and pensions,” the CMD says.

The 40,000-odd pensioners are looking forward for this loan agreement as Transport Minister Thomas Chandy had promised the KSRTC Pensioners Organisation that the three-and-a-half month’s pension arrears would be cleared in one go before September. The CMD is hopeful that the change in the duty pattern, revenue from fleet augmentation through wet lease and purchase of new buses with assistance from KIIFB will fetch another ₹35 crore, which would bridge the revenue-expenditure gap to a great extent. “Once the financial situation improves, the management will take steps to pay the pension to the retirees without break,” he says, and leaders of both the KSRTEA and TDF seem willing to go along with him, provided the management keeps them in the loop all the way.