Hudco loan to RTC waits for guarantee from govt

Vijayawada: Andhra Pradesh Road Transport Corporation (APSRTC) is eagerly waiting for the Chief Minister’s nod for getting a loan from Housing and Urban Development Corporation (HUDCO) to fulfill its immediate needs.

The HUDCO wanted a guarantee from State government for sanction the loan to RTC a few days ago following consultations with RTC MD M Malakondaiah during his Delhi tour on December third week, 2016. A file in this regard has been put up for Chief Minister’s consent through the State finance department a few days ago.

According to senior officers in RTC, the corporation made a proposal to HUDCO for a loan of Rs 1,200 crore. After negotiations with RTC MD, the HUDCO has accepted to sanction Rs 1,000 crore and wanted guarantee from the State government.

State Finance department nodded for giving ‘comfort letter’ to HUDCO and put the file for the Chief Minister’s clearance. RTC MD may meet the Chief Minister on the issue soon, sources said.

However, the financial burden of RTC may increase many folds if it receives fresh loan from HUDCO as the organisation has already availed Rs 2,328 crore from various banks and financial institutions.

According to a senior officer, a major amount of HUDCO loan might be diverted to fulfill its immediate financial needs though the management says it is taking loan to procure new buses.

The public transport giant has decided to procure at least 700 new buses this year despite a need to procure 3,000 deluxe, express and super luxury buses and 5,000 ordinary buses due to severe financial crunch.

A senior officer said RTC procured 700 buses last year and made payments to just 300 buses only.

On other hand, the corporation decided to introduce ‘Corona buses’ to replace Indra AC buses as many turned a scarp. Though the corporation put an indent for 114 Corona AC buses, at least one bus of them was not supplied till now due to non payment to by RTC. The corporation has to pay Rs 65 lakh for each Corona bus.

According the another officer, RTC may allocate Rs 300 crore to Rs 400 crore for procuring new buses from out of Rs 1,000 crore HUDCO loan and remaining amount will be utilised for other requirements, including repay of bank loans.

As the RTC was not in a position to repay the existing loans, it also needs additional amount for other needs, the corporation has been borrowing an amount from another bank which became a continues process to the corporation for some years.