Mounting debts: KSRTC to hand over shopping complexes to KTDFC

Thiruvananthapuram: Faced with mounting debts, the Kerala State Road Transport Corporation (KSRTC) has started the process of handing over four of its shopping complexes at prime localities to the Kerala Transport Development Finance Corporation (KTDFC).

KTDFC, the nodal agency set up by the LDF Government in 2008 to help the KSRTC with fundraising, constructed the four shopping complexes at Thiruvananthapuram, Tiruvalla, Angamaly, and Kozhikode on a Build-Operate-Transfer (BOT) basis.

The agency claims the KSRTC owes it a whopping Rs 750 crore, the aggregate of the amount lent on various occasions. However, the KSRTC disputes this, citing that the dues are only Rs 400 crore.

The debt-ridden public transport body is now mulling the handing over of four shopping complexes to the KTDFC after determining the current market value, as per a debt resolution plan. Only the ownership of the shopping complexes, located on its depot premises, will be transferred.

In Thampanoor, out of the 4.5-acre depot, the KTDFC building and the 90 cents on which it is located, will be handed over.

The Government had set up the KTDFC with the objective of solving the acute financial crisis of KSRTC. But it’s been alleged that the former pushed the public transport entity into neck deep in debt. The nodal agency, which was expected to extend interest-free loans to KSRTC, in reality, charged a high 11 to 16 percent interest in the loans provided to the public transport agency for the provision of salary and pension to employees.

When the financial crisis reached its crescendo, the Government formed a consortium of public sector banks to restructure the huge loan liability to bail out the KSRTC. This mainly included the loans directly extended by KTDFC and the outstanding amount with regard to those sourced from cooperative banks through KTDFC.

Loans tuning to Rs 1100 crore were restructured at an interest rate of 9.2 percent on the condition that the KSRTC will be allowed a long-term loan repayment period of 20 years. Later, the KTDFC was included in the consortium after converting this amount as its share. Under the renewed consortium loan arrangement, the KSRTC is required to repay only below Rs 150 crore towards the share of KTDFC.

The KSRTC had argued that an error occurred in the calculation of the aggregate amount due to KTDFC after it obtained loans many times. It was during the discussions held in this regard that the KSRTC conveyed its willingness to hand over the four shopping complexes. Recently, serious structural flaws were detected in the KSRTC bus terminal-cum shopping complex constructed by the KTDFC at Mavoor Road in Kozhikode.