NW transport corporation in deep red

Turnaround unlikely without infusion of funds, new buses, schedules

NW transport corporation in deep red

The North Western Karnataka Road Transport Corporation (NWKRTC) is in deep red, and for good reason. 

Failure to increase the number of operating schedules in sync with rising travel needs has pushed the once profitable corporation to a dicey corner. At last count, the accumulated losses stood at over Rs 400 crore, and fingers are being pointed at the State government for completely ignoring NWKRTC while focussing only on KSRTC and BMTC.

Clear lapse

The natural growth of bus traffic every year in Karnataka has been estimated to be in the order of eight to ten per cent. But in NWKRTC’s case, the operating schedules were not increased to match this rise in demand. A recent study has indicated this as a clear lapse, triggering operational losses. Here’s how things could have been different: “When scheduled kilometres are increased, the fixed cost gets distributed over a large number of kilometres, reducing the cost per kilometre.”

Over the last 12 years, NWKRTC schedules increased by 1,002 which works out to 30.4 per cent (an annual average of 2.53 per cent). This compares poorly with the KSRTC’s schedules, which rose by 89 per cent (3,485 additional schedules) during the same period. The increase in the number of Bangalore Metropolitan Transport Corporation (BMTC) schedules was even higher at a whopping 148 per cent, accounting for an annual rise of 12.3 per cent.

NWKRTC was carved out of KSRTC on November 1, 1997, transforming the profit-making Hubli region into a corporation. This region, comprising Hubli, Belgaum, North Canara, Bijapur, Bagalkot and Gadag divisions of North Karnataka, was even offsetting the losses of other regions of KSRTC. The move proved smart, with NWKRTC recording profits in its initial years before apathy set in. 

But the downfall thereafter was dramatic. An analysis by a former top official of the corporation found that NWKRTC had Rs. 140 crore in arrears payable to employees and payments to be made to suppliers. “LIC premiums in respect of employees, deducted from their salary, have not been remitted to LIC. The policies are unlikely to be revived. This is a serious matter, if any employee covered by LIC dies and his/her policy is not in force due to this count,” the ex-official noted.

Besides, loan repayment installments recovered from salary, in respect of loans availed by employees from Employees’ Co-operative Credit Societies, were reportedly not remitted to the respective co-operative credit society. “Retirement benefits are not being paid regularly to them from 5 to 6 years. They are suffering a lot. Seeing their plight, the employees about to retire have lost interest in the work and are afraid, as to whether they would get their dues after retirement,” he added.

Liked the story?

  • 0

    Happy
  • 0

    Amused
  • 0

    Sad
  • 0

    Frustrated
  • 0

    Angry