MTC buses in Chennai have no insurance coverage
CHENNAI: Metropolitan Transport Corporation has not taken any policy of insurance on its buses and has not maintained sufficient corpus in the insurance fund as specified by a GO issued on December 31, 1971, according to findings of an independent auditors report accessed by TNIE. Though Section 146 of Motor Vehicles Act, 1988 exempts state transport undertaking from insurance policy, it stipulates that a fund has to be established and maintained in accordance with rules under the Act.
According to the report submitted to Metropolitan Transport Corporation Board, liabilities towards pending cases should be estimated and provisions made at the end of the year, sufficient earmarked investments are not made towards insurance fund. Claims are settled as and when they arise from operations funds of MTC. During the year, a sum of Rs 33.93 crore was provided towards liability and total provision towards liability (MACT Insurance fund) outstanding as on March 31, 2023 stood at Rs 93.03 crore (against Rs 96.21 crore in 2021-22).
The report said bus fare was revised with effect from January 20, 2018 and Rs 1 was collected as cess per ticket. As on March 31, 2023, the cess collection of Rs 326 crore was allotted for meeting expenses towards accident claims, toll fees and legal fees (relating to accident claims). Out of this, a sum of Rs 126.39 crore was spent for settling earlier claims while Rs 63.64 crore was deposited with banks and the balance used for working capital requirements.
The report also said MTC has an accumulated loss of Rs 14,229.73 crore which exceeds paid up share capital and share advance as on March 31, 2023. The report said MTC’s current liabilities exceeds its current assets by Rs 3,845 crore.
Total liabilities of MTC is Rs 12,771 crore backed by assets of Rs 696 crore. The report also said employees recruited on or after April 1, 2004 come under contributory pension scheme where contribution by employee is 10% of salary while matching contribution is made by MTC recovering 10% salary from eligible employers. This is transferred to the Pension Fund Regulatory Authority.As on March 31, 2023, dues on contributory pension scheme (employers and employees share) amounts to Rs 743 crore (in 2021-22 it was Rs 634.42 crore) in the book of accounts but payment is yet to be made following receipt of the government.