BMC threatens to dissolve BEST committee, appoint administrator

BMC is the parent body of the BEST undertaking. (File) 

The Brihanmumbai Municipal Corporation (BMC) has issued a stern warning to the ‘loss-making’ Brihanmumbai Electric Supply and Transport (BEST) undertaking to cut expenses and streamline funds. The BMC has asked the BEST administration to curb irregularities and implement improvements suggested by the civic body or else it would have to dissolve the BEST committee and work towards appointing an administrator.

They must cut down on additional expenses, curb irregularities and implement cost-cutting measures if they expect any financial aid from the BMC, civic officials said. BMC is the parent body of the BEST undertaking. The two bodies operated differently until October 2017, when the BMC general body approved a proposal to merge the budget of BEST to that of the BMC to bail it out from losses.

The BMC commissioner warned of dissolving the BEST committee and appointing an administrator. “Currently, there is no provision for appointment of an administrator. We will recommend the state government to allow amendment to the Mumbai Municipal Act 1888, to enable us to appoint an administrator. This will be done if the BEST administration fails to implement improvements suggested by us, and does not stop all irregularities,” said BMC commissioner Ajoy Mehta.

“We have asked the BEST administration to curtail operational expenses if they expect to receive any grants. While others have been buying buses at a cost of Rs 35 lakhs, BEST is getting them for Rs 50 lakhs. They show depreciation, but that’s only on papers. In reality, there is no cash in their account. We have been warning them for the last six months over various irregularities, but there has been no improvement,” added Mehta.

Between 2010 and 2017, the losses of the BEST undertaking has increased by a whopping 147%. At the same time, the growth in revenue collection is hardly 15 per cent. The expenditure of the undertaking has increased by almost 50 per cent. The expenditure in 2010-11 was Rs 1,523.93 crores, which increased to Rs 2,285.64 crores in 2016-17. The BEST undertaking’s transport department has incurred a loss if Rs 990.10 crores during 2016-17, said BMC officials.

In a 10-page report, the BMC commissioner has pointed out many irregularities. The report also pointed out how the BEST has been awarding contracts, but despite completion of these contracts, payments are pending. This, the report says, is one of the factors for companies either not participating in the tendering process, or single company participating with an additional criteria for recovering interest for delayed payments. This automatically increases the cost of contract.

The report includes detailed guidelines and suggestions on tiding over the crisis, which includes outsourcing BEST bus services to private companies. “The suggestion is to rent or wet lease buses instead of using old buses. This would mean procuring buses from private contractors and not buying them. The BEST will deploy its conductors on the buses and earn revenue from ticket sales,” said a senior official from BEST.

Mehta added, “BEST expects financial aid from the BMC, but does not want to work towards improving operations. The BMC wants BEST to curb inefficiency and implement cost-cutting first. They need to rework their expenses. While loans could be given, we want an assurance that the public money would be returned to us. They must give up on certain privileges for the same.”

BEST committee chairman Anil Kokil, along with other committee members, had visited Mehta several times to seek financial help for the undertaking, which is facing losses to the tune of Rs 2,500 crores. Recently, the BEST administration had demanded that they be given 1% of the property tax collected to recover losses. The proposal was rejected.

“We have been asked to cut down on additional expenses to ensure we receive the funds. We had asked them for a loan of Rs 2,000 crores to meet financial incapacity of the undertaking. The commissioner has asked us to work on our inefficiencies first,” said Rajesh Kusale, Shiv Sena member of the BEST committee.