CHENNAI: Cash-starved Greater Chennai corporation is to put major infra projects on hold for next six months. The city corporation, according to informed sources, is facing a huge financial crisis and till December, the corporation will focus only on local body polls and the northeast monsoon. To tap funds from Centre, state and avail loans from foreign and national banks, the corporation is now working overtime, the sources said.
“While the income generation for corporation has not been explored for the past 10 years, the expenditure for the corporation had scaled up by several folds. Once, the Seventh Pay Commission comes into force, the civic body would face adverse deficit of capital funds”, an informed official said adding the civic body was paying interest for more than eight major loans obtained from different agencies, including World Bank, German-based KFW Bank, Tamil Nadu Urban Finance and Infrastructure development Corporation Limited and loans from Tamil Nadu Urban Development Fund to execute mega city projects. Added to this, the corporation has applied for fresh loans running into a few hundred crores for new storm water drains to be funded by KFW and Japan International Cooperation agency.
In 2014-15, the corporation had no unsecured loans and for the fiscal 2015 Rs 62 crore was availed as loan. Further, the corporation had also approached a few nationalised banks to provi-de overdraft facilities amounting to Rs 100 crore and from now on, the interests for the over draft facilities will also shoot up, he said. According to a corporation insider, Amma canteen eats more than Rs 100 crore annually for its operation and maintenance. “For an idly produced in Amma canteen, the corporation spends Rs 2.60 and sells it for Re 1, subsidizing 70 per cent of the total cost and with the corporation planning another 100 Amma canteens, the corporation will be under severe financial stress”, the official noted.
When contacted, a senior corporation official said the loans and deficit cannot be avoided as there is a need for more infrastructure to be put in place. The revenue through property tax has increased after the merger of 42 local bodies with corporation and there is a need to increase the infra structure in these areas, thus draining our resources.
