BMTC wants a 700-cr loan boost from foreign banks
The Bangalore Metropolitan
This is a first such attempt by the BMTC. Many state-owned undertakings in the City such as
“The Board and the state government have already given a green signal for raising the soft loan, which comes with an annual interest rate of about 1per cent. The financial assistance will be used to implement the bus rejuvenation programme that includes procurement of new buses to digitization. We hope to repay the loan as and when the government releases the subsidy,” C. Shikha, Managing Director at BMTC said.
Officials have been working on programme for the last one year, it’s learnt. “The key objective of programme is to enhance the attractiveness of public transport across all user groups,” she said.
As part of the programme, the BMTC plans to nearly double the fleet of buses from 6,500 to 13,000 over the next five years. This has been a long-pending demand of transport experts and bus users, who are deprived of services due to shortage of buses. The funds will also be used to integrate bus services with other sustainable transport modes such as the Metro, walking and cycling.
The Board and state government have given a green signal for raising the soft loan
–C Shikha, Managing Director, BMTC
The BMTC appears to have opted for the soft loan as it does not get viability gap funding (VGF) needed to sustain bus operations. Sources said the BMTC suffers revenue loss of anywhere between Rs 20 to Rs 60 on every kilometre of bus operations. This is due to the fall in daily ridership from around 40 lakh a day to 20 lakh. Such is the situation that the transport utility neither receives budgetary allocations from the state nor is it allowed to increase the ticket fares.
As part of the programme, the BMTC hopes to induct electric buses, create a multi-modal public transport system by covering physical infrastructure, fare and information systems integration across modes and establish a VGF mechanism with dedicated sources of funding to support BMTC in meeting service delivery and performance efficiency.
Officials said the funds will be used for measures such as overall increase in bus availability, development of bus priority lanes, multi-modal hubs, depots, terminals and walking and cycling facilities. The BMTC also plans to deploy world-class intelligent transport systems for fare integration across modes, data analytics systems for performance management, service planning and multi-modal information systems for customer engagement across modes.
Vinay Sreenivasa of Bengaluru Bus Prayanikara Vedike felt that seeking funds from the World Bank or ADB could be a dangerous move as the BMTC may have to act on the conditions posed by the lenders. “Eventually, the BMTC could be pushed to adopting policies that may take away welfare measures such as subsidized bus passes for senior citizens and students,” he said. The government, he said, should instead pay from its own resources.