IMC seeks loan for ADB-assisted project | india | Hindustan Times
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IMC seeks loan for ADB-assisted project

CASH-STRAPPED INDROE Municipal Corporation (IMC) has approached the State Bank of Indore seeking financial assistance to bankroll its share of the Rs 641.25 crore Asian Development Bank (ADB) project.

india Updated: Jun 08, 2006 16:11 IST

CASH-STRAPPED INDROE Municipal Corporation (IMC) has approached the State Bank of Indore seeking financial assistance to bankroll its share of the Rs 641.25 crore Asian Development Bank (ADB) project.

The Corporation is to pay Rs 77 crore towards the ADB-assisted Urban Water Supply and Environment Improvement Project (UWSEIP) that will finance, among other things, phase three of the Narmada project.

Civic body mandarins recently approached SBI for providing the necessary fiscal assistance to implement the project and also urged the bankers to waive a guarantee on the loan.

IMC and SBI officials had preliminary round negotiations in this regard last week. Although no final decision has been taken Corporation sources rated as “quite good” the chances that the bank would agree to forward the necessary cash.

“SBI has asked for details regarding IMC property and revenue generation which is a good sign as it suggests the bankers are open to the deal”, said a senior Corporation official speaking on condition of anonymity.

The IMC feelers to SBI comes in the wake of a resolution (No 62 dated April 19, 2006) passed by the Mayor-in-Council (MiC) clearing securing of non-guarantee loans from banks and financial institutions.

The proposal was among four items later appended to the agenda of the budget meet and was cleared by the general council on June 16.

When contacted SBI officials refused to either confirm or deny the reports. “We do not comment on such matters as they would amount to breach of customer confidentiality”, said Central General Manager T Padmanabhan.

The USWEIP project, it may be noted, consists of five separate components, water supply, sewage and drainage, sanitation, solid waste management and community aided development projects.

Of these, water supply, consisting of the 360 mld (million litres daily) Narmada-III scheme, constitutes the largest chunk amounting to Rs 441.49 crore.

Sewage and Drainage (Rs 25 crore), sanitation (Rs 2.5 crore) and solid waste management (Rs 10.35 crore) account for the rest with the community development projects, escalation and contingency costs making up for another Rs 161.91 crore).