BEST Faces Rs. 10,000 Cr Losses Amid Undervalued Asset Leasing

The Brihanmumbai Electricity Supply and Transport (BEST) undertaking is facing severe financial stress, with accumulated losses exceeding ₹10,000 crore.

Amid this crisis, newly elected committee members have raised concerns that BEST is undervaluing its commercial assets across Mumbai.

Bid documents reveal that the administration is renting out spaces at 19 prime locations—including Colaba, Kandivali, Goregaon, Andheri, Mulund, Chembur, Ghatkopar, Wadala, Mumbai Central, and Vikhroli—at rates far below prevailing market prices, sometimes as low as one-fifth of typical commercial rents.

Key Highlights

• BEST leases prime Mumbai spaces far below market rates
• Committee demands inspections amid ₹10,000 crore losses
• Fleet expansion and electric buses dependent on BMC support

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For example, two shop spaces in Colaba were reserved at ₹104 per sq ft while market rates in the area range from ₹400–800 per sq ft. Similarly, in Mulund West, a 6,374 sq ft space was offered at ₹38 per sq ft, despite nearby rentals averaging ₹150–350 per sq ft.

Committee members are demanding a full inspection and explanation of these undervalued rates. BEST officials defended the pricing, citing factors such as old property conditions, first-floor locations with lower footfall, and unresolved property taxes that limit usability.

Meanwhile, the undertaking continues to pursue non-fare revenue streams like property monetisation and advertising.

Committee chairperson Trushna Vishwasrao emphasized site inspections and requested additional financial support from the BMC to help bridge gaps, expand the fleet—especially electric buses—and improve service for Mumbai’s commuters.

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BEST currently operates a reduced bus fleet of 2,700 vehicles, of which only 249 are owned, with the remainder on wet lease, highlighting the urgency for financial and operational reforms.

Section 2: Data, Statistics, Figures & Quotes

Key figures & statistics:

• Accumulated losses: ₹10,000+ crore.
• Commercial spaces under lease: 30,000+ sq ft across 19 locations.
• Colaba shop rates: Reserved ₹104/sq ft; market ₹400–800/sq ft.
• Mulund West 6,374 sq ft: Reserved ₹38/sq ft; market ₹150–350/sq ft.
• Ghatkopar West 3,021 sq ft: Reserved ₹52/sq ft; market ₹450–600/sq ft.
• Kandivali West 359–373 sq ft: Reserved ₹48/sq ft; market ₹200–400/sq ft.
• Bus fleet: 2,700 buses, only 249 owned; rest on wet lease.
• Financial support requested from BMC: ₹3,000 crore; allocated ₹1,000 crore.

Quotes:

Sunil Ahir, BEST Committee member:  “Colaba is such a premium location. Renting out space at dirt cheap rates is quite shocking.”

Sachin Patil, BEST Committee member:  “The administration should come clear on the reasons for such a steep drop in the base price, especially when BEST is reeling under financial stress.”

Trushna Vishwasrao, BEST Committee chairperson:  “My whole intention is to ensure that BEST becomes financially self-sufficient.  I shall be inspecting sites in the coming days.”

Additional context:

• Low commercial rents impact BEST’s non-fare revenue potential.
• The undervaluation of prime assets contradicts Mumbai’s booming real estate market, where commercial rents are skyrocketing.
• Fleet expansion, particularly with electric buses, is constrained by limited funds.