krisrosario
Kris Rosario
The Maharashtra State Road Transport Corporation (MSRTC) suffered losses to the tune of Rs 1331.26 crores in the period 2002-2007, the Comptroller and Auditor General of India (CAG) said in its annual report for the year 2007.
According to the observations in the CAG report, the losses suffered by the MSRTC are due to operation of uneconomical routes, excess consumption of fuel, unviable city and janata service, and reduction in load factor of Irizer buses besides other problems plaguing this public entity.
Squarely blaming the state government for operating buses on uneconomical routes, the report said that the state transport has suffered losses of Rs 968.47 crores over a period of five years between year 2002-03 to 2006-07 due to operating service as obligatory trips where the earning per kilometer (EPKM) was less than Cost Per KM (CPKM).
State government though issued orders for obligatory trips way back on Nov 29, 1973, has maintained a silence in reimbursement of losses due to operation of these trips. It has approached state authorities for reimbursement of losses on the recommendation of a committee but there is no word from state (till July 2007).
The report said that a loss of Rs 27.1 cr was due to the avoidable delays in repairs and maintenance of vehicles and of Rs 19 lakh following premature failure of reconditioned engines. The report adds that the load factor was another important element in running of state transport buses and the State Road Transport Corporations of Andhra Pradesh and Karnataka have better load factor record as compared to MSRTC.
While MSRTC has targeted 62, 61, 62, 61 and 59 percent occupancy for a period from year 2002 to 2007 the actuals were less than 59 (highest).
This load factor has resulted in poor revenue generation and shortfall was recorded at Rs 1057.40 crores between 2002-07.
Premature failure of reconditioned engines was also a factor behind poor performance of MSRTC, it said.
Also, it has fixed a life of reconditioned engines at 50,000 km. but detailed scrutiny of records for a period from 2002-06 of six divisions revealed that 331 engines reconditioned at a cost of Rs 82.75 lakhs had failed before the completion of stipulated life.
Interestingly, 61 out of 331 engines ran out even before achieving 5000 km. and 14 engines failed even without running for a single km. This has resulted in unfruitful expenditure of Rs 18.75 lakhs incurred on reconditioning of these engines.
CAG found that MSRTC fleet of 16,468 buses as on March 2003 reduced to 15,111 (March 2007).It continuously incurred operational losses due to increased operation costs and marginal increase in revenue.
Also, Janata service was not viable, it noted. After introducing six AC Irizer model bus procured from Ashok Leyland on Mumbai- Pune route in April-May 2002, the MSRTC suddenly introduced Volvo bus on same route in December 2002.
The profitability of Irizer bus was reduced as its load factor dropped from 78 to 51 percent resulting in operation loss of Rs 65 lakhs in year 2004 to 2006.
The corporation that has been operating at a mere 58 per cent of its carrying capacity of a crore passengers per day, posted a loss of Rs 37 crore during the 2005-06 fiscal.
For the first time in its 60 years of existence, Maharashtra State Road Transport Corporation (MSRTC) posted profits. It had earned profits of Rs158.04 crore in 2007-08.
OP Gupta, vice-chairman and managing director of MSRTC, said the undertaking made profits despite being forced to run buses on unprofitable routes as part of its social responsibility. According to MSRTC's statistics, nearly Rs156 crore was the financial burden incurred by it in running 16,432 trips on "unviable" routes. "These trips are to appease some political leaders who compel the undertaking to operate buses to and from certain remote areas. These are termed as 'C' category trips, operated by way of social obligation," a senior MSRTC official said.
According to the observations in the CAG report, the losses suffered by the MSRTC are due to operation of uneconomical routes, excess consumption of fuel, unviable city and janata service, and reduction in load factor of Irizer buses besides other problems plaguing this public entity.
Squarely blaming the state government for operating buses on uneconomical routes, the report said that the state transport has suffered losses of Rs 968.47 crores over a period of five years between year 2002-03 to 2006-07 due to operating service as obligatory trips where the earning per kilometer (EPKM) was less than Cost Per KM (CPKM).
State government though issued orders for obligatory trips way back on Nov 29, 1973, has maintained a silence in reimbursement of losses due to operation of these trips. It has approached state authorities for reimbursement of losses on the recommendation of a committee but there is no word from state (till July 2007).
The report said that a loss of Rs 27.1 cr was due to the avoidable delays in repairs and maintenance of vehicles and of Rs 19 lakh following premature failure of reconditioned engines. The report adds that the load factor was another important element in running of state transport buses and the State Road Transport Corporations of Andhra Pradesh and Karnataka have better load factor record as compared to MSRTC.
While MSRTC has targeted 62, 61, 62, 61 and 59 percent occupancy for a period from year 2002 to 2007 the actuals were less than 59 (highest).
This load factor has resulted in poor revenue generation and shortfall was recorded at Rs 1057.40 crores between 2002-07.
Premature failure of reconditioned engines was also a factor behind poor performance of MSRTC, it said.
Also, it has fixed a life of reconditioned engines at 50,000 km. but detailed scrutiny of records for a period from 2002-06 of six divisions revealed that 331 engines reconditioned at a cost of Rs 82.75 lakhs had failed before the completion of stipulated life.
Interestingly, 61 out of 331 engines ran out even before achieving 5000 km. and 14 engines failed even without running for a single km. This has resulted in unfruitful expenditure of Rs 18.75 lakhs incurred on reconditioning of these engines.
CAG found that MSRTC fleet of 16,468 buses as on March 2003 reduced to 15,111 (March 2007).It continuously incurred operational losses due to increased operation costs and marginal increase in revenue.
Also, Janata service was not viable, it noted. After introducing six AC Irizer model bus procured from Ashok Leyland on Mumbai- Pune route in April-May 2002, the MSRTC suddenly introduced Volvo bus on same route in December 2002.
The profitability of Irizer bus was reduced as its load factor dropped from 78 to 51 percent resulting in operation loss of Rs 65 lakhs in year 2004 to 2006.
The corporation that has been operating at a mere 58 per cent of its carrying capacity of a crore passengers per day, posted a loss of Rs 37 crore during the 2005-06 fiscal.
For the first time in its 60 years of existence, Maharashtra State Road Transport Corporation (MSRTC) posted profits. It had earned profits of Rs158.04 crore in 2007-08.
OP Gupta, vice-chairman and managing director of MSRTC, said the undertaking made profits despite being forced to run buses on unprofitable routes as part of its social responsibility. According to MSRTC's statistics, nearly Rs156 crore was the financial burden incurred by it in running 16,432 trips on "unviable" routes. "These trips are to appease some political leaders who compel the undertaking to operate buses to and from certain remote areas. These are termed as 'C' category trips, operated by way of social obligation," a senior MSRTC official said.