CSMC juxtaposed as state approves 75 pc soft loan only

Lokmat News Network

Chhatrapati Sambhajinagar:

The Chhatrapati Sambhajinagar Municipal Corporation (CSMC) has to contribute a monetary share of Rs 822 crore to the new water supply scheme launched to quench the city's thirst. However, the cash-strapped civic administration landed into two minds as the state government approved a soft loan two days ago, but with ten conditions attached. It also stated that only 75 percent of the total amount will be available as a loan (Rs 616 crore), while the remaining 25 pc (Rs 207 crore) has to be provided by the CSMC from its treasury.

The cost of the new water supply scheme is Rs 2,740 crore. Approximately 75 percent of the work has already been completed. To complete the project, 30 pc of the funds are to be provided by the Central Government, 45 pc by the State Government, and 35 pc by the CSMC (Rs 822.22 crore). Hence the civic administration had repeatedly requested the state government to bear this amount, but instead, it offered a soft loan.

On Thursday, the State Urban Development Department (UDD) issued a circular stating that the CSMC would be granted a soft loan from the Maharashtra Urban Infrastructure Fund through the Maharashtra Urban Infrastructure Company Ltd. The circular contains ten conditions, one of which states that only up to 75 pc of the requested amount will be provided. Thus, the municipal corporation landed into financial trouble.

Already burdened by loans

The CSMC has already taken a loan to contribute Rs 250 crore to the Smart City Mission. The repayment of this loan is still ongoing. Besides, the CSMC will need to contribute Rs 600 crore for drainage projects in areas like Satara-Deolai and the city’s assembly constituencies (East, Central, and West).

Loan repayment over 10 years

The municipal corporation is expected to repay Rs 616 crore loan over 10 years, with an estimated minimum interest rate of 4 pc. Monthly installments could go up to Rs 10 crore. The loan must be repaid within the stipulated 10-year period, with the funds being transferred directly to the bank account as soon as they are deposited into the escrow account.

Circular under review

The CSMC’s chief accounts officer Santosh Wahule said, “ The state government’s circular was received on Thursday, and the conditions are currently being reviewed. A final decision will be made by the administrator after considering all factors.”