The Vijayawada Municipal Corporation (VMC) is all set to avail itself of a loan of ₹100 crore to complete the housing schemes sanctioned under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) programme, which came to an end in 2014.
The VMC has decided to complete the unfinished works pertaining to close to 4,000 houses sanctioned under the JNNURM programme at an estimated cost of ₹156 crore.
The VMC employees and officials equally are worried about the implications of the fresh loan as the JNNURM programme has apparently crippled the finances of the civic body to a large extent. The VMC is “still repaying” the loan of ₹100 crore, taken for the houses sanctioned under the Basic Services for Urban Poor (BSUP), a sub-mission of the JNNURM.
In fact, given the repayment model, the VMC is entering into a burdensome game of repayment. “The VMC has paid ₹160 crore so far towards the principle and interest. The corporation has to pay ₹70 crore more,” said a senior official, who didn’t want to be quoted.
Cost overrun
In all, 28,152 houses were sanctioned to the city in four phases during 2005-12.The total cost of all four projects was ₹643 cr. initially but later it went up to ₹817.24 cr.
As the VMC took up various developmental projects under the JNNURM, it had to borrow ₹100 crore then. It is paying an interest of 10.5% on this loan. “The corporation is planning to borrow the fresh loan from banks like ICICI, SBI and Union Bank. Negotiations are going on,” said the official.
The VMC is unable to pay the post-retirement benefits to its staff. It has decided not to earmark more than ₹50 lakh for payment of provident fund, pension dues etc., remarked an employee.
