To rescue the debt-stricken Brihanmumbai Electric Supply and Transport (BEST) undertaking, the civic body has decided to lend an internal loan of `1,600 crore to it. The loan is likely to immensely help the undertaking, which is trying to come out of a financial mess for a long time now.
The BEST, which is running into deficit for the last 10 years, has shown losses worth `1,934 crore. It was even taking loans from private banks with a nine per cent interest to pay wages to its employees.
According to the civic officials, the BMC has agreed to give a loan of `1,600 crore for a period of five years with a five per cent interest.
“The BEST committee will pass a resolution to demand an internal loan from the civic body. After the civic general body approves the loan, permission from the state government will be sought to transfer the funds,” said a senior civic official.
In 2008, the undertaking had asked for a loan of `1,000 to the civic body. However, taking a tough stand, the civic administration had turned down its demand.
“This year the BEST has been able to make up the losses due to increase in electricity and bus fares. The loan given by BMC will further help us to strengthen our economic position,” said BEST chairman Ashok Patil.
“We will use this loan to clear debts taken from private banks as we have several short-term working capital loans,” a BEST official said.