MSRTC to monetise its assets at prime locations to overcome financial losses

MSRTC has been facing losses for years and has to take financial assistance as grants from the state government to pay the salaries of the employees. By monetising its assets, the corporation is expected to generate substantial income that will also reduce its dependency on the government for survival

Mumbai: The Maharashtra State Road Transport Corporation (MSRTC) has decided to overcome its losses by monetising its assets situated at prime locations across the city and the state. The corporation has decided to open the land parcels on lease where it will also provide development rights to the leaseholders.

Mumbai, India - 19 Oct. 2017: Maharashtra State Road Transport Corporation (MSRTC) buses parked inside Parel depot as the ST strike continues on 3rd day, in Mumbai, India, on Thursday, Oct 19, 2017. (Photo by Bhushan Koyande/HT) (Hindustan Times)

MSRTC has been facing losses for years and has to take financial assistance as grants from the state government to pay the salaries of the employees. In 2018-19, the accumulated loss of the corporation was ₹4,603 crore. During the pandemic, it went up to ₹5,319 crore, ₹7,090 crore and ₹8,366 crore in 2019-20, 2020-21 and 2021-22 respectively.

By monetising its assets, the corporation is expected to generate substantial income that will also reduce its dependency on the government for survival.

In Mumbai alone, (including the suburban areas), the corporation has over 10 lakh sq ft of land that is currently in use in the form of bus stands, bus depots and warehouses and are spread in areas such as Mumbai Central, Parel, Dadar, Kurla (Nehru Nagar) Borivali (Sukurwadi) Borivali (Nancy Colony).

Similarly, in the Mumbai Metropolitan Region (except Mumbai), the land parcels owned by the corporation are spread over an area of 20.98 lakh sq.ft. They are located in Vashi (Turbhe), Panvel, Uran, Thane (railway station) Thane (CBS), Thane (Khopat), Thane (Vandana) Dombivli, Bhayander, Kalyan, Ulhasnagar and Bhiwandi.

The total number of MSRTC bus depots and bus stations in the state are 247 and 585 respectively.

The state corporation has started a process to appoint a project management consultant (PMC) that will help them to achieve its purpose. The redeveloped facilities will also provide better amenities to the passengers.

Founded in 1960, MSRTC has been a lifeline for rural Maharashtra as it provides services to 97% villages of the 40,000 villages across the state and also helps in connecting rural and urban areas.

“We intend to provide existing land parcels available on lease for a period of 30 years for development. In return, MSRTC expects to earn revenue from the same through commercial utilisation on public-private participation (PPP) basis,” Shekhar Channe, vice chairman and managing director, MSRTC, said.

“The selected PMC shall conduct the detailed study on the locations and its business prospects, submit a techno-feasibility report and facilitate the final transaction and monetisation in reference to these identified asset locations,” he also said.

The monetisation of land parcels will be done in phases. In the first phase, MSRTC has identified 20 assets covering 50.42 lakh sq ft of plots. Among them, two are from Mumbai including Mumbai Central depot where its headquarters is also situated. It is spread in an area of 2.02 lakh sq ft.

The tenders will be floated for giving the plots on lease along with development rights. The bidder giving us the best revenue will be handed over the plot. Only 50% of the plot will be allowed to develop as MSRTC requires land for continuing operations. The developer will get two third of the total floor space index (FSI) while one-third of the FSI will remain with us,” Channe informed.

The PMC will also assess the suitability of various business models for MSRTC vacant land parcels available adjoining the national highways, close to MIDC areas and semi-urban areas among others, prepare RFP (request for proposal) and supervise the project until it is completed. MSRTC is expected to adopt the build operate and transfer (BoT) model for the project. However, a decision on the same is yet to be made.

The state-run transport bus service has a strong presence except in Mumbai and Pune. With a fleet of around 18,500 buses, it catered to around 6.7 million commuters on a daily basis. In the next two years, it is expected to get 5,000 electric buses and 2,000 AC buses. It has 88,000 employees among them around 60,000 are drivers and conductors.