BEST’s losses mount from ₹6,400 crore to ₹9,200 crore in 2 years

MUMBAI: Financial losses are mounting, year on year, for the Brihanmumbai Electricity Supply and Transport (BEST) undertaking

MUMBAI: Financial losses are mounting, year on year, for the Brihanmumbai Electricity Supply and Transport (BEST) undertaking. On Thursday, the BEST presented its annual budget for FY 2025-26 to its parent organisation, the Municipal Corporation of Greater Mumbai (MCGM), declaring a total cumulative liability of over ₹9,286 crore, for both its transport and electricity supply divisions. The cumulative liability covers pending loans, losses, borrowings, among other things, over a period of time.

On Thursday, the BEST presented its annual budget for FY 2025-26 to its parent organisation, the Municipal Corporation of Greater Mumbai (MCGM). (Photo by Bhushan Koyande/ HT) (HT PHOTO)

Sources said the cumulative losses were ₹6,400 crore two years ago. The annual losses for FY 2025-26 are close to ₹2,200 crore although the BEST, as per requirements, has shown a surplus of ₹1 lakh. With a dwindling fleet of 2,800 buses, the BEST is finding it increasingly difficult to cater to the 2.8 million-3 million passengers who use its services daily, while also facing stiff competition in supplying electricity to the island city, which has a base of 1.05 million consumers.

On Thursday, BEST General Manager, Anil Diggikar, presented the undertaking’s budget to the municipal commissioner and administrator, Bhushan Gagrani. Diggikar told Hindustan Times, “We have a total liability of around ₹9,200 crore, which is chiefly on account of operating the transport wing. This liability is also due to development of infrastructure, procurement of equipment, repayment of loans, pay revisions in employee salaries, and meeting day-to-day expenses.”

Diggikar added that the BMC will decide on the total estimate of the budget for FY 2025-26, which is their prerogative. The budget specified that the state Urban Development Department had urged the Brihanmumbai Municipal Corporation (BMC) to cover 5% of the total viability gap of the ₹2,573-crore project for purchasing electric buses. Funding was sourced with 70% from the World Bank, 25% from the Government of Maharashtra, and the remaining 5% from the BMC.

Last year, in FY2024-25, the BEST was given a budgetary provision of ₹928 crore, of which the BMC paid ₹800 crore, mainly for infrastructure development. The balance ₹128 crore was meant for the procurement of electric buses as viability gap fund, which is yet to be paid to the BEST. The officials said they have a fleet of 2,800 buses, of which 1,000 buses are owned by the BEST.

The BEST is supposed to maintain a fleet of 3,337 buses owned by the undertaking, for which it has sought ₹3,400 crore from the BMC although there is no update on this. Sources said that, earlier, the BMC had issued a grant of ₹1,600 crore but later decided not to provide aid of over ₹800 crore each year. This funding was meant to take care of other expenses as well, such as paying for wet-lease bus operators, Integrated Traffic Management System, paying a Diwali bonus to employees, repaying cost for purchase of electricity, and gratuity and other obligations to pensioners. In the current budget, a provision of ₹29,000 each, for 27,000 employees, has been made as Diwali bonus.

Meanwhile, BEST envisions a fleet of 10,662 buses by 2026-27. However, despite several reminders and notices to various manufacturers, it is yet to get its entire order of 2,400 AC e-buses, 200 double-decker AC e-buses, and another lot of 2,100 buses, which is in the pipeline. In FY 2024-25, the undertaking had planned to procure 2,000 electric buses for ₹2,573 crore. In the last year, there have been at least two wet-lease operators who quit bus operations, which has shrunk the fleet by more than 500 buses. In addition, BEST sources said, the undertaking has to deal with frequent protests and strikes by wet-lease employees, which compromises bus services.