The KSRTC is looking for other sources of funding after the traditional model of high interest loans from banks and NBFCs by mortgaging depots is coming to an end. After getting a soft loan of around Rs 450 cr from Kreditanstalt fur Wiederaufbau (KfW), a German government-owned development bank, the state carrier is looking to tap a low interest loan from the newly-constituted Kerala Infrastructure Investment Fund Board (KIIFB) for financing critical and large infrastructure projects. The KfW loan is for buying 786 pollutionless buses in Kochi and it is provided at an attractive rate of 0.74% per annum.
The KSRTC management has sought a Rs 300-cr loan from the newly constituted special purpose vehicle which plans to mobilise funds for 23 social and development sectors, including transport. The amount will be utilised for purchasing 1,000 more buses.
KSRTC general manager R Sudhakaran said that the proposal was to get the money in three tranches over the next three years. The carrier has been gradually moving away from high interest loan regimes to regulate its debt burden.
Non-banking financial companies such as Kerala Transport Development Finance Corporation (KTDFC) were once big lenders for providing short-term loans at higher interest rates. A Rs 1,300 crore loan from KTDFC was transferred to a consortium of nine banks, a move according to Sudhakaran has helped the Corporation to save at least Rs 100 crore in interest payment.
Chairman and Managing Director of KSRTC Antony Chacko, who led the debt swapping deal, said that mortgaging properties to the consortium helped the Corporation to assess its assets properly. Out of 92 depots, KSRTC has mortgaged 56 depots for finding funds for its operations and paying salaries and pension.
The government had recently amended the KIIFB Act through an ordinance to raise funds to the tune of Rs 50,000 crore outside the budget for taking up infrastructure projects.