CHENNAI: Metropolitan Transport Corporation (MTC) will seek approval to raise its borrowing limit to Rs 4,500 crore from the existing Rs 4,000 crore. Official sources said the issue will be discussed at the board meeting.
To meet commitments like salary, pension, and payment of bank interest, the MTC is availing loan from the Tamil Nadu Transport Development Finance Corporation (TDFC) even after utilising student subsidies, subsidies to provide free travel to women and diesel subsidies. All ordinary town services (whiteboards) are being operated and the daily travel of women in ordinary buses has increased. As a result, the gap between revenue and expenditure is growing every month, and on some days the revenue is not sufficient to meet the fuel expenses and other variable costs, sources said.
As a result, MTC is currently incurring a loss of Rs 8,342 crore annually and a cash loss of Rs 7,638 crore till April 2023. The corporation can manage day-to-day affairs only by borrowing from the government, TDFC and availing overdrafts from bankers, added sources. Despite this, payments to depots for maintenance are prioritised to ensure the full operation of buses every day.
The total loans outstanding including bank overdraft for the last nine years as on April 30, 2023, is Rs 3,853.37 crore. The outstanding loan increased from `1,716 crore in 2018-19 to Rs 3,853 crore.
Every month, the shortfall in revenue is being managed by availing loans from TDFC as funds sanctioned and released for senior citizens and disabled passes.
This apart, MTC has been postponing payment to credit societies, LIC and postal life insurance, etc. But in a recent judgement, the Madras High Court has told MTC to pay dues of Rs 70.23 crore (as on March 2023) in 15 instalments, which comes to Rs 5 crore per month along with the current recovery of Rs 6 crore every month. Also, the payment of salaries has increased by Rs 2.50 crore per month after DA was hiked in May.
As a result, MTC is seeking financial assistance from the government to comply with the direction of the High Court and pay the outstanding dues and current recoveries towards credit societies. It is learnt that the transport department has advised it to approach TDFC, which has sanctioned funds for paying outstanding dues only and have not sanctioned fund towards the current recoveries of credit societies.