Owners of contract-carriage buses and vans are selling their vehicles in a desperate bid to stay afloat and tide over loan default
The next-to-nil demand for trips from tour groups and inter-State passengers has resulted in operators of many contract-carriage buses and vans putting them up for sale in a desperate bid to stay afloat and tide over loan default.
So much so that online sale portals are replete with images of luxury-buses put up for sale at rates one could perhaps buy a premium or mid-segment sedan.
Ajayan V., vice president of Contract Carriage Operators’ Association (CCOA), said the State has a total of around 10,000 tourist buses. “A vast number of them have been put up for sale, while many old buses are being sold as scrap, for owners to mobilise funds to procure cargo autorickshaws in which they can sell produce like fruits and fish. The situation is such that many are on the verge of suicide,” he said.
Among them is Vinod V. of Kundara, Kollam, whose brand new AC bus that cost him ₹46 lakh in February last year has been put up for sale. “It operated 10,000 km for just about two months when the pandemic struck. While I paid ₹14 lakh from my savings, ₹36 lakh was raised as loan. I hope to sell off the bus for ₹11 lakh, and the buyer would have to repay loan balance,” he said.
The inhibition to travel in groups, especially in air-conditioned vehicles, has slammed the brakes on the prospects of the sector that was already reeling under the effect of substantial increase in capital investment due to Bharat Stage-VI emission norms and AIS-052, the new bus-body code, said Aravind Balakrishnan, State executive committee member of CCOA, which organised a State-wide vehicle-chain protest a week ago to highlight the perilous situation.
“The ‘insensitive’ attitude of banks towards those unable to repay loan due to the pandemic-induced crisis has made matters worse. About 85% of bus owners were banking on their buses as their sole means of livelihood. The State government’s lethargy in providing tax sops, including on diesel, has aggravated the crisis. The cost of bus chassis increased from ₹20 lakh to ₹25 lakh ever since BS-VI norms took effect. Adding to this are body-building and allied expenses that increased the cost of an AC bus to over ₹50 lakh, from what was about ₹40 lakh till four years ago,” he added.
Ernakulam-based tourist bus operator Sarath G. Nair, who owns a fleet of 28 buses, spoke of how almost all private banks and non-banking financial companies are ruthlessly pressuring those who are unable to repay vehicle loans, in contravention of the RBI guidelines. “Bus operators have approached the court on the issue,” he said.