Nellore: Will the Rs 1,137-crore loan taken by the Nellore civic body from Hudco be converted into a grant to waive repayment of this humungous amount?
According to Nellore Rural YSRC legislator Kotamreddy Sridhar Reddy, an appeal has been made to Union minster M. Venkaiah Naidu to convert the loan as a grant as the civic body had little means to service such a huge loan. The logistics are not too complicated but servicing the huge amount is daunting. The loan was taken for underground drainage (Rs 580.89 crore) and drinking water supply improvement scheme (Rs 556.77 crore).
As per the agreement, Nellore Corporation has to repay the loan with interest in instalments within 15 years starting from June 2019. The civic body would have to pay quarterly interest for the amount utilised but the corporation had a tough time in arranging Rs 9.57 crore for the last quarter. According to sources in the corporation, the delay in payment of the interest led Hudco to hold back the next instalment of Rs 140 crore.
The civic body has to pay Rs 200 crore to the contractors who are executing the two schemes and the progress of the work is linked to timely payments. To overcome the problem, the civic body authorities organised the interest of Rs 9.57 crore by taking Rs 6 crore from Hudco funds and Rs 3.57 crore from general funds. The interest was repaid a few days back, paving the way for the release of Rs 140 crore. While this time the interest has been paid by making adjustments, experts and critics said a small civic body could not hope to repay such a big amount.
"When the corporation is unable to pay the paltry quarterly interest, how can it mobilise Rs 8 crore a month towards monthly instalment starting from 2019.” asked YSRC corporation member Bobbala Srinivasa Yadav. Mr Sridhar Reddy said, “The Centre had allotted Rs 1,000 crore to Guntur and Vijayawada corporations as grants. What is the rationale behind burdening a small civic body like Nellore with such a huge financial amount?”
So far 46 per cent of the work related to both underground drainage and water supply schemes has been completed. Officials are keen on completing water scheme by July 2018 and UGD by March 2019. A senior official said their aim is to complete the work before the 2019 polls as Union minister M. Venkaiah Naidu and AP minister P. Narayana were keenly following the projects.
