The Hindu Business Line : Kerala Supplyco posts Rs 70-crore loss

However, official sources said that the corporation has to purchase several essential items from the open market and sell to the public at subsidised price fixed by the Government. In this case, the purchasing price used to be often higher than the selling price, they pointed out. The Government since 1997 has been paying the difference in prices as a grant to the corporation, they said. However, last year it has not been paid fully.

Prior to 1997, this difference in the prices, which used to be substantial amount, was being paid by the Government as loan to the corporation on interest, they said.

This loan had not been repaid and the accumulated debt is still outstanding. The interest alone on this comes to around Rs 70 crore per annum, they said.

As a result, the corporation has incurred an operational loss of about Rs 70 crore last fiscal, they claimed.

They said a proposal to convert the entire loan into equity of the State in the corporation was under consideration of the Government. "If the Government agreed to this proposal then the corporation would come out of the red," they said.

However, according to reports, one of the main reasons for the corporation to incur heavy losses was alleged corrupt practice in bulk purchases of the items from the wholesale market.

The corporation spends around Rs 35 lakh per annum on tendering exercises and then buys the items at high prices from the local market, a senior official source pointed out.

"An institution, which has been set up to procure good quality products at competitive prices and supply to consumers at moderate prices, seems to have failed in its objective," he said.

The corporation has made a total sales turnover of Rs 450 crore last fiscal. It has petrol bunks, super markets, medical shops etc to sell all these essential items at low prices to the public.

Besides, it procures green gram and chilli for the Government schools which provide mid-day meal to students. The monthly requirement of green gram is estimated at 1,500 tonne while that of chilli is 500 tonne, they said.

They said that the corporation being a bulk buyer of the commodities it should get these items at low prices. But, in reality it is not so, they alleged.

When contacted, Dr Jacob Thomas, a senior IPS officer, who assumed charge as the Managing Director of the corporation last month told Business Line that all the issues would be studied and investigated and suitable measures taken to revamp the corporation.