E-Paper
PMC to call banks for meeting to push for 24x7 water project loan
PUNE The Pune Municipal Corporation (PMC) has received a lukewarm response to its loan applications from banks for the ₹2,550-crore 24x7 water project
PUNE The Pune Municipal Corporation (PMC) has received a lukewarm response to its loan applications from banks for the ₹2,550-crore 24x7 water project. The civic body has now decided to call a meeting of banks officials to discuss the issue.
The civic body has, so far, spent ₹465 crore on the project. The administration raised ₹200 crore through bonds in June 2017.
In March 2021, the PMC floated a tender for a loan of ₹200 crore.
As per PMC officials, some of the banks approached the PMC, stating a “negotiable” interest rate but, avoiding being specific.
Ulka Kalaskar, PMC’s chief account officer, said, “After floating tenders and calling for proposals we have not received much response from the banks, so far. We have decided to call the bank officials for a meeting and discuss the interest rates. At present, banks have only mentioned negotiable interest rates. We want exact interest rates to proceed on the loan.”
Other senior officials of the PMC, requesting anonymity, said, “Due to Covid-19, most of the project works has been hampered. The deadline will be missed, and priorities have changed. Though PMC has a good credit rating (AA+), banks are over cautious about project completion. After all, it is a project loan. If it gets delayed or hampered, it will affect repayment of the loan.”
He added, “At present, municipal bonds are not viable for PMC as interest rates by financial institutes are below 7 per cent.”
In 2017, PMC raised ₹200 crore through municipal bonds at an interest rate of 7.59 per cent for 10 years. It also received one per cent concession from the central government for the municipal bonds. Hence, the PMC is paying ₹15 crore per year as interest.
