An unexpected spanner has been thrown in the works of the Special Purpose Vehicle (SPV) formed by the city Corporation for the implementation of its Smart City project.
Due to an oversight on its part, the registration process of the SPV has been delayed, thus forcing it to postpone its first meeting as well as the process of consultancy selection.
The SPV was supposed to be registered as per the Company Act before July 31. The Corporation had appointed a Company Secretary for this purpose. The first meeting of the SPV was scheduled to be held in the first week of August.
However, the meeting cannot be held until the SPV is registered. The Corporation had not calculated the time that would be lost during the vetting process in the Law and Finance Department.
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“The Article of Association and the Memorandum of Association of the SPV have to be vetted by the Law and Finance Departments. We didn’t calculate time that would be taken for the vetting process in the two departments when we scheduled this. The Law Department has cleared it now. We are expecting the Finance Department too to clear it by this week,” said a Corporation official.
It was on July 20 that the State government appointed K. Gopalakrishnan, as the Chief Executive Officer of the Smart City project SPV. The next major step, to issue a call for the selection of consultancy that will prepare the draft report, was to happen in the first meeting of the SPV.
The delays early on could prove costly, as the transfer of funds each year from the Union government will depend on the amount of utilisation during the previous year. Seventy per cent of the funds have to be utilised every year as part of the project. In the first year of the project, the Centre will transfer ₹194 crore, the instalment for the first two years.
