GVMC will soon borrow Rs.75 crore from Hudco to tide over the tight financial condition it has been facing. The money will go towards financing its share of 30 per cent in the Jawaharlal Nehru National Urban Renewal Mission. The corporation has taken up 20 projects worth Rs.1,890 crore in the urban mission. It has so far borrowed Rs. 290 crore from financial institutions and banks to fund the mission works.
The long-term loan of Rs.75 crore is being taken to speed up works on the Rs.450-crore Bus Rapid Transit System being executed in two corridors of a total of 40 km and drinking water projects in view of the approaching summer.
Ironically, GVMC’s funds have been locked up with AP Urban Infrastructure Development Corporation. A total of Rs.240 crore, released by the Central and State governments, was to have been released a few months ago. But owing to alleged procedural irregularities in award of works in Vijayawada Municipal Corporation, a committee has been formed to look into the process in the others mission cities as well. The committee has gone into the alleged irregularities and it is learnt that no irregularities are found in GVMC.
However, the issue is still pending with the government costing GVMC dearly. With the funds locked up, the progress has been slow in the BRTS which is on a trial run presently on the Pendurti corridor. For instance, bus shelters are not in place and commuters have to wait for buses in scorching sun.
“The situation will considerably ease once Rs.75 crore is drawn and contractors are paid the Rs.60-crore due to them. Besides we are also expecting the government to release some funds,” says an official of GVMC. The in principle sanction letter has been given by the lending agency. The other formalities are now being completed to enable draw money in the next week, it is learnt.
The general body of the municipal corporation has accorded its approval for obtaining a loan of Rs.150 crore for footing the 30 per cent cost. The government has also issued a GO for the borrowing. However, the corporation has scaled down the borrowing considering the likely release of funds by the government and also to reduce the interest burden.
In the recent revised budget estimates for 2012-13, the corporation has shown a borrowing of less than Rs.100 crore and obtained the special officer’s permission.