T. Ramakrishnan

Implementation of infrastructure projects

CHENNAI: Having exhausted the fund availability under the World Bank-assisted Tamil Nadu Urban Development Project (TNUDP)-III, the State Government has initiated negotiations with lending agencies of German and Japan Governments, KfW and Japan Bank for International Cooperation (JBIC), for smooth implementation of infrastructure projects in several municipalities and towns.

As part of this exercise, a team of JBIC officials is holding discussions with the Government in Chennai on Monday. A couple of weeks ago, the KfW authorities held talks with those in charge of municipal administration.

An official says the JBIC's visit primarily concerns with the Hogenekkal combined water supply scheme, for which the Government has approached the Bank for funding.

The topic of funding urban local bodies is also likely to figure in the discussion to be held in the afternoon. For a detailed talks, a team of the Bank officials is expected to visit the State in mid-June.

The State Government requires enormous resources for funding its ambitious programme of laying underground sewer lines in all the district headquarters. Under the TNUDP-III, as on March 31 this year, loans were sanctioned to the tune of Rs. 1,335 crore. Of this, a little more than 40 per cent was earmarked for sewerage and sanitation. Besides, other components of infrastructure such as solid waste management, roads and storm water drains are being covered.

In the Government's assessment, a gap of Rs. 500 crore arises, even after taking into account the TNUDP-III. This is why the Government has approached the KfW and the JBIC for a line of credit arrangement.

Another official says the German assistance will materialise this year, while the JBIC's support is expected next year. According to the present plan, the KfW will provide Euro 77 million (approximately Rs. 425 crore). Of this, Euro 65 million will be development loan; Euro 10 million for master financing indenture and the rest two million Euros for strengthening technical capabilities.

The Government has approached the JBIC for a line of credit of about Rs. 285 crore.