Brihanmumbai Electric Supply and Transport - Finances

Finances

In the financial year 2004–05, the company earned Rs. 1,514.22 crore from its electricity department, and 839.18 crore from its transport department. Profits from its electricity department totalled Rs. 152.82 crore (US$35m), and losses in its transport department totalled Rs 212.86 crore ($48.8m), giving the company a net loss of Rs. 62.04 crore ($14.2m).

For the financial year 2005–06, BEST is expected to earn Rs. 1,540.13 crore ($352.92m) with a profit of 140.8 crore ($32.3m) from the electricity department alone. However, its transport department is expected to earn 948.68 crore ($217.39m), with a loss of 140.30 crore ($32.26m). This gives it an estimated net loss of Rs. 50 lakhs ($114,575). Newer management techniques, such as retrenching of excess staff (494 till date), and the closure of less patronised routes, have reduced the losses in recent years, from a high of Rs. 175 crore ($40.1m) in 2001.

Daily earnings from its transport system is Rs. 2 crore ($458,450). It collects Rs. 70 lakh ($160,450) worth of five rupee coins daily, Rs. 48 lakh ($110,000) worth of ten and twenty rupee notes, and Rs. 60 lakh ($137,535) worth of fifty rupee notes, through its fare collection system. This has led a unique situation wherein it has accumulated a surplus of short change. In July 2005, the company floated tender inquiries to 54 banks to exchange the loose change, which totalled 4.67 crore ($1.07m). However, none of the banks sent in a single bid, some citing that their vaults are full, and others saying it would be unprofitable for low denominations, given security considerations.

Though the BEST is a government-owned company, it does not receive any financial assistance from the BMC, or the state government. BEST also earns revenues by way of advertisements on its buses and bus-stops, and through rent from offices on owned properties. The BEST, being a public utility company, cannot increase electricity and bus fares to maximise its profits. An increase, when effected, is usually carried out to curb losses due to inflation. BMC approval is needed before such an increase goes into effect.