The VMC has been claiming that Rs.200 crore is due under JNNURM

Now, it is certain that the State government will not release any bailout package to Vijayawada Municipal Corporation.

The government told the corporation officials not to pin hopes on the dues and augment the revenues, sources say. The VMC has been claiming that Rs.200 crore was due from the government pertaining to the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) programme. Of this, Rs.57 crore is cost escalation in the housing projects.

But, Andhra Pradesh Urban Finance and Infrastructure Development Corporation (APUFIDC), the nodal agency to release funds, has been asserting that no dues we pending with the government. The VMC and APUFIDC reconciled the accounts following suggestion from Municipal Administration and Urban Development Minister M. Mahidhar Reddy.

The corporation officials made a presentation to the government and urged it to shoulder the burden to complete the projects before December.

The VMC officials’ hopes were rekindled when Mr. Mahidhar Reddy stated that he understood the need for a bailout package and first phase of funds would be released in three days, during his visit to the city a month ago.

U-turn

The situation suddenly turned gloomy with the change in policy of the government on bailout package. Now, the VMC officials have begun a process to “prune the expenditure and postpone a few projects that are of not immediate importance”.

The projects like housing, 10,000 houses, Bus Rapid Transit System (BRTS), construction of transfer stations at Ramalingeswara Nagar will be taken up at a later stage. The BRTS project expenditure will be pegged at Rs. 130 crore while the original estimates were more than Rs. 150 crore.

The corporation would, however, complete the ongoing works like Under Ground Drainage (UGD) on priority basis, officials say.

The corporation has estimated that it requires Rs.238 crore to complete eight projects under Urban Infrastructure and Governance (UIG) component of the JNNURM. Of this, the APUFIDC has to release Rs.88 crore, and the corporation has to mobilise Rs.148 crore.

If the Corporation Bank’s loan of Rs.50 crore were to be taken into consideration, the VMC effectively would have to mobilise Rs.98 crore for UIG projects.

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