THIRUVANANTHAPURAM: Despite being the state’s lifeline, ferrying lakhs daily across cities and villages, KSRTC continues to bleed, weighed down by a bloated salary bill and volatile fuel prices.
What really intrigues is that despite a sharp rise of over Rs1,000 crore in total operating income (TOI) during FY24, the loss narrowed by a mere Rs176 crore.
Does this stand testament to the weight of systemic inefficiencies and structural burdens the Corporation is yet to shake off?
According to provisional data, KSRTC’s TOI rose from Rs2,142.50 crore in FY23 to Rs3,154.99 crore in FY24, backed by marginal fare hikes and improved fleet utilisation.
Yet, the annual loss stood at Rs1,314.04 crore, only slightly lower than the Rs1,490.66 crore loss reported a year earlier.
The bleeding persists because of two major cost heads: employee salaries and fuel expenses. Together, they account for a staggering 125 per cent of revenue – with salaries alone consuming 63 per cent (Rs1,978 crore) and fuel-related costs accounting for 62 per cent of TOI.
Though the Corporation has attempted cost containment by hiring contract staff in place of retirees and phasing in electric buses, the sheer scale of legacy costs and fuel price volatility, over which it has little control, continue to erode any gains.
Fare revisions are subject to government approval, leaving KSRTC with limited flexibility to pass on cost increases to passengers.
CARE Ratings has flagged ongoing cash losses, a leveraged capital structure, and poor debt coverage metrics as critical risks.
Government guarantee is key
However, the Corporation enjoys the unconditional and irrevocable guarantee extended by the Government of Kerala, which remains the primary financial lifeline for the transport utility.
Funds from 52 bus depots are pooled into an escrow account, from which equated daily instalments (EMIs) towards a consortium loan are settled before releasing operational funds to KSRTC.
This structured repayment mechanism has ensured that there are no delays or defaults on consortium-related loans since December 2023.
But trouble brews outside the consortium. KSRTC is locked in disputes with Kerala Transport Development Finance Corporation Ltd (KTDFC) over servicing certain unrated loans.
Delays in repayments on these borrowings could jeopardize the fragile financial discipline if not resolved swiftly.
Even on an operational front, the Corporation posted a negative profit before interest, lease rentals, depreciation and tax (PBILDT) of Rs1,056 crore in FY24. For the first nine months of FY25, KSRTC recorded a revenue of Rs2,170 crore, continuing its trend of negative cash accruals.
“Despite being propped up by state guarantees and a structured escrow arrangement, KSRTC’s long-term survival hinges on a deeper structural overhaul – a shift towards operational self-sufficiency, rationalisation of human resource costs, and a faster transition to cost-efficient, greener alternatives,” a financial consultant said while talking to businessbenchmark.news.
