KSRTC MD seeks probe on loan row

Thiruvananthapuram: KSRTC managing director A. Hemachandran has sought an inquiry into the allegation that the private bus lobby was trying to sabotage the move to get loans from a consortium of nationalised banks for the KSRTC. It was alleged that Vinayak S. Nair, a close relative of a prominent bus owner in Kollam, had sent letters to the managements of some banks in the consortium against giving loans to the KSRTC saying that it could not repay the loans.

Mr Hemachandran has sent a letter to the government to apprise it  of the developments. The finance department had earlier finalised the norms for availing of Rs 3,350 crore from a 12-bank consortium led by the SBI with a repayment period of 20 years and an interest of nine per cent.

The long-term loan will be used to restructure the Rs 2,996-crore loan liabilities taken from the consortium of banks, Kerala transport development finance corporation, district cooperative banks and other financial institutions over the years.  

The KSRTC now repays Rs 3 crore of the loan daily.  The plan is to  bring it down to '84 lakh so that the monthly repayment is reduced by Rs 62 crore.  Most of the present loans have a high interest rate of 16.25 per cent.

The enhanced cash flow would be channelled  by the KSRTC for paying salary and allowances to the 36,000-odd employees, pension to the 38,000 retirees, apart from meeting the fuel bill and honouring other commitments and also for expansion of fleet. 

SBI Capital Markets Ltd (SBI CAP) will act as consultancy for the loan, sources said.