Karnataka State Road Transport Corporation (KSRTC) will take a Rs 624-crore bank loan to clear arrears, including statutory dues such as provident fund (PF) and fuel payments. The state-owned public transporter has invited an expression of interest from financial institutions and commercial banks for a term loan of Rs 623.8 crore.
The loan will be availed in one instalment, with a repayment period of seven years. The state government will provide primary and collateral security, documents show.
"This loan is being taken by KSRTC as per the orders of the government. All RTCs will avail a Rs 2,000 crore loan to clear pending dues related to provident fund and diesel," KSRTC managing director V Anbukumar told Moneycontrol.
"All four corporations have total arrears of around Rs 4,800 crore, with the most immediate dues amounting to Rs 3,000 crore. The government has approved Rs 2,000 crore in loans. If we receive additional support, we will be free from all arrears. We are not pledging any assets, as this loan is guaranteed by the government," he added.
Also read: Karnataka: Over 8,300 KSRTC buses to be tracked in real time; tender floated
On January 2, the Karnataka cabinet approved a 15 percent fare hike for the four state transport corporations, including KSRTC and BMTC. The cabinet also cleared a proposal for the government to guarantee Rs 2,000 crore in loans from financial institutions to help clear outstanding statutory dues such as provident fund and fuel payments, up to November 2024.
As of November 2024, the four RTCs had consolidated liabilities of Rs 6,330.25 crore, including PF fund dues, gratuity, fuel supply arrears, pension liabilities and other obligations, sources said.
Also read: Karnataka cabinet approves 15% hike in bus fares for four RTCs from January 5
"Payments for provident fund transfers, pensions, and other dues have been deferred due to a cash crunch. A total of Rs 5,527.4 crore is required to cover all outstanding dues, including Rs 2,901.5 crore in provident fund arrears and Rs 827.37 crore in fuel arrears. Of this, Rs 3,728.9 crore was sought from the government," an official said.
Officials also expect the government to extend financial support in the Budget for the financial year 2025-26. The opposition BJP blamed the Shakti scheme, which provides free travel to women in state-owned buses, for the growing financial burden of four corporations. Transport minister Ramalinga Reddy has attributed the crunch to the previous BJP government, which he alleged left the transport corporations burdened with Rs 5,900 crore in unpaid dues.
Also read: Of guarantees & hikes: Karnataka govt walks a tightrope amid calls to limit benefits
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