Mumbai: Loss-making BEST to pay Rs 30-crore Diwali bonus

The 45,000-odd staffers of the Brihanmumbai Electricity Supply and Transport (BEST) can rejoice now after the administration has approved Diwali bonus of Rs 5,000 to each employee.

BEST's finances could do with a lot of fixing. File pic for representation

But in the bargain, the bonus payout has put an additional burden on Mumbaikars who use the Undertaking's bus services and power supply. On November 3, the BEST committee approved this bonus, amid high drama among the various politicians who are committee members.

Also Read: BEST unions' 3-day strike over pending bonus postponed

The total amount from the bonus payout is around Rs 30 crore. The Undertaking has taken a loan from its parent body BMC for the same, on which R10 crore would be the interest amount. "This bonus will surely contribute to the financial burden that we are facing," said Jagdish Patil, General Manager, BEST Undertaking.

More debt
According to sources in the BEST, who explained the functioning of this loan taken from the BMC, the latter is adjusting this bonus amount from the massive loan already given. The civic body has given a loan of Rs 1,600 crore to BEST - mainly taken to pay bank loans - on which it is recovering Rs 40 crore every month.

However this time, BEST would tag this amount as an additional Rs 40 crore loan given for paying bonus to the employees. The financial health of the Undertaking is so poor that it is facing accrued losses of Rs 2,345 crore. Sources added that it has already taken loans of Rs 1,390 crore.

"We are yet to pay R257 crore to Tata Power which is the amount till October. If we don't, then we attract penalty," added Patil. BEST buys electricity from Tata Power. This amount will rise to R407 crore by this month if this amount is not paid.

Political tug-of-war
Meanwhile, BEST committee members wanted the BMC to pay the entire bonus amount as they are the parent organisation. "Why can't the Sena, which is heading both the BMC and BEST, pay the loan from the civic authority's pocket?

Even the state government belongs to them and they simply have to make some amendments and give this amount without any interest rate," said Ravi Raja, BEST Committee member from the Congress. However, Shiv Sena claims that even cash cow BMC is not fully financially fit.

"BMC needs to receive money from the state government to the tune of Rs 700 crore; Rs 45 crore from the Centre for JNNURM (Jawaharlal Nehru National Urban Renewal Mission) and even the Home department needs to pay Rs 18 crore for electricity bills," said Yashodhar Phanse, BEST Standing Committee chairman representing Shiv Sena.

Read Story: BEST unions threaten 3-day strike over pending bonus

Amidst these arguments, the Maharashtra Navnirman Sena (MNS) questioned the logic of paying Rs 13,500 to BMC employees as bonus. "When BMC is saying that they don't have sufficient money, why are they paying this much? By giving Rs 5,000 to BEST employees, they are causing unnecessary disparity between the two sister organisations," said Kedar Hombalkar, BEST Committee member from MNS.

"We cannot afford to pay Rs 13,500 as we are running on deficit," added Patil. Finally the committee went for a vote. While Sena and BJP wanted the administration to clear Rs 5,000 as bonus, the Congress, NCP and MNS wanted BEST to pay Rs 13,500, same as BMC. Samajwadi Party leader Yakub Memon remained neutral, which resulted in the Sena-BJP marginally winning by a single vote.