APSRTC gets state govt's nod to borrow Rs 400 cr

Hyderabad: The cash-starved Andhra Pradesh State Road Transport Corporation (APSRTC) today got the state government's nod to borrow Rs 400 crore from banks to clear the salary arrears of employees.

APSRTC Vice-Chairman and Managing Director B Prasada Rao informed the state government that the Corporation requires Rs 450 crore to clear the arrears and requested the latter to release the amount it owed them or grant permission for obtaining a loan.

The state government owed Rs 613.93 crore to APSRTC towards reimbursement of various concessions granted to passengers. The government, however, earmarked only Rs 154.76 crore in the current year's budget for the Corporation.

Since it is not in a position to clear the dues in full, the government agreed to RTC's proposal for availing of bank loan and permitted it (Corporation) to secure the money in two equal installments of Rs 200 crore.

The state government will stand guarantee for the loan and also service it, according to Principal Secretary (Transport) S P Singh.

Accordingly, RTC will borrow Rs 200 crore in the first phase from Bank of India at the interest rate of 8.25 per cent per annum, to be repaid in five years.