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HindustanTimes Fri,18 Apr 2014

Sitting on empty coffers, MC set to take on Rs. 750-cr 'Mission Ludhiana'

Ravinder Vasudeva, Hindustan Times  Ludhiana, November 14, 2013
First Published: 20:10 IST(14/11/2013) | Last Updated: 23:52 IST(14/11/2013)

Even as deputy chief minister  Sukhbir Singh Badal is all set to launch his much-hyped “Mission Ludhiana” on Friday by laying foundation stones of projects worth more than Rs. 750 crore, eyebrows are being raised over the management of money for these projects.

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Questions are being posed based on the fact that the cash-strapped municipal corporation (MC) has failed to manage around Rs. 20 crore required to pay October salaries to its staff running the general administration.

Half way into November, the corporation has been able to pay only certain Class-4 employees, most of whom are safai sewaks, that too under the apparent concern that they may go on strike during the festive season, leaving the civic body high and dry.

The salary component of the civic body is paid from the monthly instalment of VAT repayment received from the state government. But since, this month, the VAT instalment has not been received, the salaries have been delayed, as the civic body has no major alternative resources to meet its financial needs.

Now, with the Shiromani Akali Dal (SAD) chief himself coming to launch the project amid fanfare and presenting the project to a select gathering showing his plans for the city, non-payment of salaries could become a hiccup for the project.

“We have been assured that salaries will be disbursed in a few days. Since right now we are busy preparing for the deputy CM's visit, without raising any protest, we have conveyed our resentment over the delay in salaries already to our high ups,” stated Rajiv Bhardwaj, president, Ludhiana Municipal Corporation Ministerial Union.

It will be the first phase of the mission, having a total cost of around Rs. 2,499 crore, that as per the deputy CM would change entire look of the city.

The major projects include the eight-laning of Ferozepur Road from Jagraon bridge to Sidhwan Canal for which Sukhbir will lay foundation stone at Mata Rani Chowk on Friday. This project alone has a budget of `209 crore, and is expected to ease traffic snarls on the busiest road of the city.

Aiming to streamline the erratic water supply in the city, Sukhbir will also lay foundation stone for a Rs. 116-crore project aimed at connecting all missing links of the water supply pipelines in the city.

He will also lay foundation stones for routine development projects for streets, sewerage and sanitation in wards falling under LMC worth Rs. 88 crore.

Where will the money come from?
As far as the finances of these projects are concerned, the first phase, which will be inaugurated on Friday, will rely heavily on Central grants to be received by the civic body.

The project for water connectivity has 50% funding from the central government, the detailed project report of which has been approved by the Centre. Civic body's share here is 30%, whereas 20% would be paid by the state government.

The civic body plans to pay its share by taking loans from HUDCO, as at present the corporation's coffers are almost empty.

The recent loan of Rs. 100 crore taken from HUDCO would be utilised for different developmental projects to be inaugurated by the deputy CM under “Mission Ludhiana”.

Other projects include the over 4,500 flats for slum-dwellers in Giaspura under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and more buses for the City Bus Service. The civic body also plans to take a `50-crore loan from the Canara Bank for these projects.

Repayment of loans
The monthly instalment on the interest to be paid for the loans for these projects would alone cost the civic body around Rs. 2 crore. As per MC commissioner Rahul Tewari, to pay off the loan, emphasis would be laid on increasing collections from residents in different forms.

'Every civic body relies on loans'
MC commissioner Rahul Tewari, the blue-eyed IAS officer of Sukbhir, who will coordinate the project, has defended the move of the corporation to take loans.

“There is not a single civic body in India that does not take loans to carry out projects. For a layman, you are right to worry as we are running short of funds, but we have prepared this plan keeping in mind all our limits and income,” he stated.

Tewari disclosed that to pay the interest of the loan being taken from HUDCO, the civic body would rely heavily on about Rs. 300 crore pending as collection from residents in different forms.

“Our collections from tehbazari wing will have to be increased and for that the deputy CM has directed not to succumb before any political pressure. It's a feasible project and we will do it, you just watch,” he added.

Meanwhile, Congress MLA from Ludhiana West Bharat Bhushan Ashu said, “I have serious doubts of the future of these projects. How can a civic body that cannot pay the salary of its employees, run such project on loans. The civic body may be able to pay off the interest, but what about the principal amount. The deputy CM must answer these questions on Friday.”

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