Government auditor CAG has rapped the state-owned Punjab State Bus Stand Management Company Limited for diverting bank loans to meet salary and retirement bills instead of buying new buses.
In its report, CAG said that "by diverting the loans for creation of capital assets towards revenue expenditure, the Corporation lost an opportunity to increase its revenues."
The company availed term loans of Rs 31.25 crore from the State Bank of Patiala (SBOP) for purchase of 200 new buses in August 2010 ( Rs 17.25 crore:100 buses) and November 2012 (Rs 14 crore:100 buses) at an interest of 14.25 per cent per annum.
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Of the loan, Rs 15.99 crore was diverted for making payments of salaries and retirement dues of employees/pensioners. Consequently, 90 buses could not be purchased, CAG noted.
Similarly, Punjab government sanctioned a loan of Rs 35 crore for purchase of new buses (Rs 26 crore) and construction of new bus stands (Rs 9 crore), out of which Rs 13.75 crore was released during January to March 2013.
The Corporation intimated utilisation of Rs 13.75 crore for the purchase of new buses and had diverted part of it for meeting its routine expenses, the report said.
Similarly, a loan of Rs 10 crore was not utilised for purchase of new buses and was diverted for meeting revenue expenditures, salary/pension.
Government then stopped disbursement of balance loan of Rs 11.25 crore.
The management of the company stated that the term loans availed from banks and the state government were also utilised for payment of pension/pensionary benefits to the retirees in view of various directions from the Punjab and Haryana High Court.
The fact remains that the Corporation diverted the loans meant for purchase of buses due to its weak financial planning, it said.
The company also earned the wrap for allowing concessionaires longer concession period, enabling them to earn higher than reasonable return of 16 per cent.
"Concessionaires were allowed longer concession period, which enabled them to earn higher than reasonable return of 16 per cent, determined by PIDB," said the CAG report.
A concessionaire was given undue benefit of Rs 28.26 crore, by not reducing the concession period for failure to develop infrastructure facilities and passengers' amenities as per the concession agreements, the report said.
Concessionaire Rohan & Rajdeep Infrastructure and MSK Projects were allotted bus terminal projects in Amritsar, Jalandhar and Ludhiana through Public Private Partnership (PPP) on Build, Operate and Transfer (BOT) basis.
The concessionaire was to design, finance, develop, construct and commission the project in 18 months from the date of signing of agreement.
