ADB loan: Kozhikode going the Kochi way?

KOZHIKODE, DEC. 6. The Kozhikode Corporation is likely to have a rethink on the Rs.250-crore loan offered by the Manila-based Asian Development Bank (ADB) under the Kerala Sustainable Development Project. This is mainly on the grounds of the high interest rates, the ratio of loan and grant and the contribution by the local body to the project.

Already the Kochi Corporation has agreed in principle to reject the ADB offer of Rs.282 crores on the basis on the mid-term report prepared by the financial institution. The report had given an indication that the loan will be disbursed at nine per cent interest, one per cent front-end fee and an annual commitment charge of 0.75 per cent.

The Kozhikode Mayor, Thottathil Raveendran, who is away in New Delhi, told The Hindu today that the Kozhikode Corporation was yet to receive the mid-term report. "The Kochi Mayor, C.M. Dinesh Mani, has appraised me of the situation in Kochi and has also invited me to take part in a meeting with other mayors of the State to discuss the issue on Wednesday,'' he said.

He said the ADB had offered to give an assistance of Rs.250 crores to the Kozhikode Corporation. An amount of Rs.132 crores would be given in the first phase and the balance in the second phase. "The terms and conditions are yet to be discussed,'' Mr. Raveendran said.

The project has been aimed to promote good urban governance, develop and expand urban infrastructure to increase economic opportunities and to reduce vulnerability to environmental degradation and urban poverty. It will also formulate a support programme for improving urban social services in a sustainable manner for the elderly, destitute women and street children.

It seems the mandarins of the Kozhikode Corporation are kept in the dark about the loan component and the issues that have cropped up at the Kochi Corporation recently. However, the Deputy Mayor, P.T. Abdul Latheef, was categorical in stating that the corporation would not avail of the assistance with strings attached to the offer.

The Corporation Secretary, P. Venugopal, said that the funds were being given as grant and that any liability such as repayment condition was the responsibility of the State Government. "Already the ADB consultants have worked out the packages for the investments in various sectors for the city,'' he said.

Regional development

It may be recalled the ADB-aided Community Development Scheme process was started in Kozhikode in August 2002. A Project Steering Committee under the City Mayor and a Technical Committee under the Deputy Mayor were set up to manage the process. A series of deliberations were undertaken at ward and city levels and with different stakeholder groups between August 2002 and January 2003.

As per the vision document plans were drawn up to make Kozhikode a pivotal centre for the regional development of North Kerala. Providing funds for infrastructure development, improving slums, creating employment opportunities to increase household incomes, and strengthening partnerships between the Government, private sector and civil society were mooted.

Another objective was to make Kozhikode slum-free by 2020. The proposal was to attain improved security of land and structure tenure for all existing slum-dwellers at Kalluthankadavu, Pallikkandi (West) and Koyavalappu. It also included improving basic infrastructure and services in all slum sites suitable for upgrading and shelter conditions in slums.

The slum-eradication project has now been included in the new package. It involves improving human resource capability of the urban poor and generating local employment and increase household incomes.

Although the mid-term report is yet to be presented before the corporation council the elected representatives are certain on one aspect. Mr. Raveendran and Mr. Latheef said that any decision on availing of the loan would have to be finally approved by the council.

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