Losses incurred by PMPML: Where are the expenses going?

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The public transport utility Pune Mahanagar Parivahan Mahamandal Limited (PMPML) reported significant losses in 2017. The figures were as high as Rs. 343 crore, a rise of almost Rs. 50 crore as compared to the previous year.  The public transport bus service provider functions within  Pune and Pimpri-Chinchwad in the Pune Metropolitan Region.and operates 371 routes within a radius of 20 km around the two cities.

In 2007-08, the first year of its formation, the PMPML suffered a loss of Rs 40.38 crore, which came down to Rs 30.44 crore in the subsequent year.

Last year, Tukaram Munde, PMPML’s chairman and managing director, submitted an audit report to the Board of Directors which gave insights into the financial status of the transport provider to the board. While speaking to the media, Munde stated that despite the increasing number of commuters and buses on road, there was a simultaneous increase in losses.

He cited various reasons for the surge in the losses. One of the major reasons he highlighted was CNG buses- although they are environment friendly, the maintenance cost is very high. Munde said that it was difficult to keep even 70% of the total CNG fleet on road. On the contrary, diesel buses, having lesser maintenance cost, the utility is able to employ 90% diesel buses on the route.

Another reason mentioned was an increase in CNG prices last year. Additionally, the PMPML had excess man power. Owing to a high man power  ratio,excess financial burden was being exerted on PMPML. The salaries of the staff were also increased which lead to further losses.There were the prominent reasons attributed to the loss incurred by the public transport provider.

However, a closer look at the data provided on the PMPML website reflects an alternate perspective into the issue. In 2010-11, the budget allocated to PMPML  was Rs. 2,08,44,16,320, the earnings were  Rs. 41,80,03,550 while the expenses were Rs. 4,32,40,08,470.  Not only did the expenses exceed the budget, but the expenditure incurred on purposes other than maintenance and operations were as high as Rs. 2,12,16,84,940 (admin and other) and Rs. 1,84,23,38,508 (Employee benefit expenses). In the following year, the component of expenditure incurred on purchases of oil and fuel, spare parts, etc was added and amounted to Rs. 1140321834.  Over the years, the budget witnessed steady shifts in figures, with the one in 2015-16 being pegged at Rs. 1456051775, earnings at Rs. 7767524412 and expenses at Rs. 9285578784. In the same year, the total expenditures for oil, fuels and spare parts, admin and employee benefit expenses were Rs.1171770325, Rs.2856095752 and Rs.4948643086 respectively. 

Since 2010-11 to 2016-17, the total budget allocated was Rs. 11569024601 while the total loss incurred was Rs. 7287331964, while from 2010-11 to 2015-16, a total of Rs. 37688100763 spent on the aforementioned purposes. ( as per data available on the PMPML website)

 

Pune as well as Pimpri Chinchwad Municipal Corporations are the shareholders of the PMPML and are bearing this loss each year. While the PMC is bearing 60% of the loss, Pimpri-Chinchwad bears the remaining 40%.

By Areeb Imam and Sameer Manekar

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