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MTC incurs loss of over Rs 106 crore

Unprofitable routes, low-cost school buses, high expenditure hit revenue

SHILLONG: The Meghalaya Transport Corporation (MTC) has been operating in the red since the inception of the State and the accumulated loss in running the corporation is over Rs 106.23 crore.
An official admitted that there is financial mess in MTC as regulations were not followed over the years resulting in the current chaotic situation.
Though the loss of Rs 106.23 crore is of 2015-16, the amount will be more in the current financial year that will end on March 31.
In the past, MTC was pulled up by the one man-commission of inquiry led by CAG M.S Rao and also the Assembly Committee, but corrective measures were not taken by the corporation.
The salary component for as many 228 permanent employees and 38 contract workers in MTC is Rs 64 lakh per month.
MTC operates 51 buses, 10 maxi taxis and two 17-seater mini buses.
Out of 51 buses, only 47 are on the road, as others are in the workshop, and out of 10 maxi taxis, two are in workshop.
The year-wise turnover from MTC-run vehicles was Rs 35 lakh in 2013-14, Rs 41 lakh in 2014-15 and over Rs 48 lakh in 2015-16.
The profitable routes have been reduced to Hailakandi, Silchar and Karimganj whereas for Tura route, there is neither profit nor loss.
MTC focuses on many uneconomic routes, which include Shillong-Williamnagar, Shillong-Tura, Tura-Baghmara, Tura-Williamnagar, Tura-Mahendraganj and Jowai to Hamren, Saipung and Sumer/Pala.
With MTC not having its own rules, an effort is on by its MD A. Nikhla and other officials to frame rules in line with those of other states, including Karnataka and Delhi.
The MTC management is also planning several austerity measures, besides vigilance checking in vehicles.
Another guideline given by Nikhla, who assumed charge in September last year, is that staff cannot make purchases of spare parts and others without the knowledge of the MD as in the past there were random purchases without any accountability.
VRS on the anvil
There is also a plan to provide VRS to 50 employees, which will reduce the strength of the staff to 178 and in the next phase, 50 more employees will come under the VRS scheme.
The VRS for 50 employees was first moved in 2013, but the government cited financial crunch and the Finance Department regretted not releasing the amount. Now at least Rs 10 crore is required for providing VRS to the employees. When the first VRS was introduced in 2004, as many as 107 employees availed themselves of the scheme.
School buses
MTC has been running school buses at highly subsidised rates, which according to its management is one of the reasons for the losses incurred by the corporation.
There are as many as eleven school buses currently run by MTC. While a student is charged Rs 350 per month, a teacher has to pay Rs 450.
The monthly expenditure in running the school buses is around Rs 50,000, while the collection is only Rs 12,000.
“We are planning to start new school buses and there is a need to increase the fare, but for this, the approval of the board of directors is required,” the MD said.
Other reasons for losses
Other reasons for the losses include large number of staff leading to huge establishment cost.
Frequent maintenance of vehicles due to the difficult terrain, uneconomic routes, competition from private transport operators, reckless spending on spare parts, premature condemnation of MTC buses in the absence of maintenance section and unprofessional delivery of services are some other reasons for the losses.
Moreover, there is less commission from North East Frontier Railway for selling railway tickets by MTC.
MTC gets only Rs 15 per ticket as commission compared to the past when it received 4% commission, which was subsequently reduced to 2% and now it is Rs 15.
However, in the past when MTC was running the STPS buses for 19 months from July 2011, it made profit. The share of the profit was 70 per cent for MTC and 30 per cent for MUDA.
Though the State had promised to provide Rs 1.80 crore for the various needs of the Corporation, the government finally released only Rs 90 lakh, and the pending salary of the staff was paid till September. The salary to be paid for the employees is now for three months from October.

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