The Asian Development Bank (ADB) slapped Rs.55 crore as commitment (penal) charges on Kerala for the non-withdrawal of loan amount even as the extended deadline for completing the bank-funded projects ended on Thursday.
Kerala had raised around Rs.750 crore as loan for urban water supply, sewerage and sanitation, urban drainage, solid waste management, roads and low-cost sanitation projects in the five Corporations.
Despite incurring huge fine, no responsibility has been fixed by the State authorities. Corrective steps ended up with the termination of “four sewerage contracts due to poor performance of contractors and service of two design and supervision consultants for poor performance.”
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A portion of the loan amount was “allocated for interest during construction (IDC) and commitment charges. The agency withdrew the fund required to meet the IDC and commitment charges periodically from the allocated fund,” authorities of the Kerala Sustainable Urban Development Project, the nodal agency for the projects, said.
The ADB had fixed the penal component at 0.75 per cent per annum on the non-withdrawn loan. During the loan period, the bank used to “assess the differences between the committed withdrawal of the loan amount and actual withdrawal up to the date of assessment” to fix the commitment charges, KSUDP authorities said in response to an application filed by The Hindu under Right To Information Act.
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The projects were to be completed on June 30, 2012. As the bank will not fund the projects further, the State may require another Rs.700 crore and five more years to complete the projects. Only 48 of the 74 sub-projects identified could be completed during the extended term. Eighteen were ongoing.
Public protests against implementing waste management and sewerage projects, obtaining eco clearances, preparation of Detailed Project Reports and its approval by Corporations led to commitment charges, they said.
P.S. Mohammad Sagir, Project Director, KSUDP, said commitment charges were part of such loans. The amount collected was not an exorbitant one, he said.
Rs.750 crore was taken as loan for implementing various projects in the five Corporations