With the State government not coming to its rescue, North Western Karnataka Road Transport Corporation (NWKRTC), which is facing a funds crunch, is now knocking on the doors of banks to raise loans for payment of its Provident Fund dues.
NWKRTC, which has cumulative losses running into a few hundred crores of rupees, is undergoing a rough phase, particularly after the lockdown and post-lockdown developments, and it didn’t have funds even to pay salaries at one point of time.
Although after much delay, the government extended salary grants during the initial period of the lockdown, it has subsequently cut the quantum of salary grants following resumption of public transport services leaving the corporation to mobilise the remaining funds.
However, barring the salaries, the corporation has accumulated Provident Fund (PF) dues and also has to pay gratuity to employees. Sources in NWKRTC said that the pending PF dues were around ₹ 200 crore and that of gratuity was around ₹ 160 crore.
What is even worse is that as per rule, NWKRTC has to pay penal interest of 12 % for delayed payment of PF dues as they are pending from February 2020.
NWKRTC already has loans to the tune of ₹ 300 crore for repayment of which it has to set aside ₹ 7 crore every month. Now, NWKRTC plans to raise ₹ 200 crore from banks for a period of seven years, and will have to mortgage its property for the purpose. The road transport corporation will have to keep aside around ₹ 4 crore additionally, which would mean ₹ 11 crore every month for loan repayment, once the loan is raised.
Help didn’t come
NWKRTC did approach the State government seeking grants for payment of PF dues. However, such has been the financial position of the government that the government itself is raising loans to meet its funds requirement for various expenses.
“In turn, those in the government told us to raise loans to meet the fund requirements. The Minister too has given the go-ahead,” an official said on the condition of anonymity.
At present, NWKRTC is recording a daily revenue of ₹ 4.3 crore, which is far better compared to the average of ₹ 1.5 crore it recorded during the initial months of unlock period. But still it is a burden on the corporation as revenue would still be insufficient to pay salaries, perks and other benefits, an official said.