Smart City to procure BoDs approval for breaking FD of Rs 100 crore

Chhatrapati Sambhajinagar:

To cover the losses in the Smart City bus service the Smart City Mission deposited Rs 200 crore for a fixed tenure in the bank. Initially, a deposit of Rs 100 crore was withdrawn. Now, efforts to withdraw the remaining Rs 100 crore have gained momentum. For this, the Smart City office will need to obtain approval from the Board of Directors (BoD). Hence a proposal regarding this will be presented soon.

Previous attempts to manage bus service

Earlier, the state transport (ST) corporation operated the city bus service for a few years. However, due to unbearable losses, it discontinued the bus service. The municipal corporation then introduced smaller buses to continue the service. This service also shut down after a few years. As a result, both the ST and later the municipal corporation attempted to manage the city bus service but were unsuccessful.

In 2018, Smart City Mission purchased 100 buses to strengthen the public transportation system in the city. The bus service has been operational for five years. Soon, this bus service will have to be transferred to the Chhatrapati Sambhajinagar Municipal Corporation (CSMC). To ensure the smooth operation of the bus service for five years, the then-CEO deposited Rs 200 crore in a fixed deposit (FD) in the bank. The bus service was running from the interest earned on this deposit during these five years. A subsequent CEO decided to break the FD and spend Rs 100 crore on the road work proposed under the Smart City Mission. Now, the current CEO, G Sreekanth, has taken the stance that government funds are meant to be spent, not placed in FDs. Therefore, there is a possibility that the remaining Rs 100 crore FD will be broken to complete the remaining road works under the Smart City campaign.

G Sreekanth said, “The proposal to break the FD will be tabled before the board of directors in the meeting. The decision made there will be implemented accordingly.”

How will the bus service continue?

The bus service has to be operated at a loss. If Smart City no longer receives interest from the deposits, how will the service continue? How long will the administration tolerate the losses? The essential expenses are covered only by the revenue earned through ticket sales. The bus administration department of Smart City has not taken any concrete steps to increase its income.