Another Loan Of Rs 200 Cr For NMC, Debts Continue To Mount

Repayment of previous loans due

The Nagpur Municipal Corporation (NMC) has been granted another loan of Rs 200 crore from Bank of Maharashtra (BoM), being already in debt to the bank for its previous borrowings of 200 crore and 100 crore. The civic body looks nowhere close to repaying the previous loans as it has only completed 24 of 85 instalments of the first loan and 11 of the 84 instalments of the second.

The civic body was being denied the new loan by the bank, for it wanted credit rating for the civic body from rating agencies.

VirendraKukreja, chairman of the standing committee said, “NMC needed money to provide its 30% to 25% share in major projects and had wanted to borrow Rs200 crore. The government had given its nod for the loan following which NMC started negotiating with Bank of Maharashtra.”

The bank maintained that the NMC should approach the CARE Rating Limited to gather inputs on credit analysis. “With inputs and suggestions from CARE, NMC’s accounts and finance section improved its record keeping. CARE gave us A-rating. We then submitted the report to the bank and it approved the loan,”Kukreja said.

He also assured that the financial condition of the civic body is now under on the path of revival. He said that the NMC had dispensed Rs 150 crore to the contractors during the Diwali and later another Rs 135 crore. NMC is working towards allotting another Rs 15 crore to the contractors.

Contractors working under the Phase I and II Cement Road Program have been paid their dues of Rs 38.80 crore till November. NMC has completed all its dues by paying Rs 6.32 crore for its projects carried out in the Hudkeshwar-Narasala area.

Contractors assigned with installation of LED street lights have also been paid in full. Kukreja said, “We have cleared bills of contractors who carried out works sanctioned under district planning committee. Until November end, NMC had received Rs21 crore from DPC, while it made payments to all contractors. We still have Rs5.5 crore in balance.”

He further said that the funds from the new loan will be used for large scale projects.