Withdrawal of Rs 200 crore FD by ASCDCL likely to trigger debate!

Aurangabad: The then municipal commissioner Nipun Vinayak has kept Rs 200 crores sanctioned under Smart City Mission as a fixed deposit (FD) in the nationalised bank. The intention was to ensure that the city bus service introduced in the city under the mission should run without any hindrances at least for 10 years. Henceforth the loss incurred from the bus service was being compensated from the interest earned upon the FD. Meanwhile, the chief executive officer (CEO) of Aurangabad Smart City Development Corporation Limited (ASCDCL) Abhijeet Chaudhari has hinted at the withdrawal of the fixed deposit to undertake the development of roads and other major important works in the city.

To discourage the citizens from utilising private transport and encourage them to travel by urban public transport (city bus) and reduce the growing threat of pollution in the city, the ASCDCL launched the bus service in the city. A fleet of 100 buses was procured from Tata Motors Co. Considering the financial loss in the transport service during the initial years, the ASCDCL kept Rs 200 crore as the fixed deposit. For the past four years, the expense of bus service is borne through the interest money earned upon this FD. As per the agreement, the ASCDCL will operate the bus service for five years and then it will hand over the operations to the AMC. Meanwhile, the income earned through the sale of bus tickets is being deposited in a separate bank account so that it will help AMC in future to make financial provisions to maintain the bus service. This amount is around Rs 25 crores. Recently, a meeting of ASCDCL's board of directors (BoDs) was in which the public representatives suggested withdrawing the FD, then making necessary financial provisions for the bus service and then utilise the remaining amount to undertake the development works.

Final decision after review

While speaking to media persons, the ASCDCL-CEO confirmed that the 'FD' was made to run the city bus service smoothly for 10 years. “We will review the expenses required to maintain the bus service in future and also planning will be made to utilise the remaining amount for development purposes. The final decision in this regard will be taken in the meeting of the ASCDCL's BoDs.

Loss of Rs 100 crore

The Central Government has extended the Smart City Mission till June 2023. Accordingly, the ASCDCL administration on March 31 published tenders of development works valuing Rs 635 crore. Many works were also done before the publishing of these tenders and their estimated value was around Rs1,200 crore. However, the response to many of these tenders was below the estimated (basic) cost, as a result, a deficit of Rs 100 crore has emerged. Hence the ASCDCL is now thinking of compensating this deficit from the FD amount, apart from the provision of further required funds for the operation of the bus service, it is learnt.