Pune: The Pune Municipal Corporation (PMC) plans to seek bank loan than raising fund through municipal bond for its ambitious project of equitable 24x7 water supply project as the present interest rates are low.
The civic body has spent more than ₹465 crore on the project that is progressing at a slow pace. The administration has already raised ₹200 crore through bonds in June 2017 for the ₹2,550-crore project, and plans to seek another ₹200 crore from the open market.
Civic activists have raised objection on the PMC’s decision.
PMC has included water charges for the 24x7 project in property tax bills since 2018. The amount is around ₹110 crore per year. Till date, the corporation has spent around ₹462 crore on the project.
Recently, PMC commissioner Vikram Kumar reviewed the project and instructed officials to speed up the work.
Suresh Jagtap, additional municipal commissioner, said, “We have sought loan details from banks.”
In 2017, PMC had raised ₹200 crore through municipal bonds at the interest rate of 7.59 % for 10 years. It also got one per cent concession from the central government for municipal bonds. Hence, PMC is paying around ₹15 crore per year as interest.
{{/usCountry}}In 2017, PMC had raised ₹200 crore through municipal bonds at the interest rate of 7.59 % for 10 years. It also got one per cent concession from the central government for municipal bonds. Hence, PMC is paying around ₹15 crore per year as interest.
{{/usCountry}}Ulka Kalaskar, PMC chief account officer, said, “At present, municipal bonds are not viable for PMC as interest rates by financial institutes are below 7%. We have given seven days to financial institutes to submit their proposals to PMC. PMC has a good credit rating (AA+).”
Civic activist Vivek Velankar said, “PMC has ₹860 crore of fixed deposits in various banks. There is no need to take high-interest loan. If PMC takes a loan on this fixed deposit, they will get ₹200 crore at the interest rate of 4%.”
Nandkumar Jagatap, PMC superintendent engineer of water supply department who is handling the 24x7 project, said, “From 2017 till date, the corporation spent more than ₹465 crore on the project. It includes ₹200 crore of municipal bonds, ₹200 crore of water charges and ₹65 crore from installation of commercial meter charges (40,000 commercial meters installed so far).
Progress of project
Particulars Existing proposed
Water supply zones 35 141
Service reservoirs 30 80
Distribution network 350 km 1,618 km
Transmission network 95 km 139.23 km
Automatic meter installation 67,000 3.37 lakh