Vijayawada Municipal Corporation goes for Hudco loan

Vijayawada: Following the penalty fear, the Vijayawada Municipal Corporation (VMC) has decided to seek Rs100 crore loan from the Housing and Urban Development Corporation (Hudco) to complete the housing project taken up under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) housing scheme.

However, the opposition YSRC and Left parties in the Council have been opposing this move. Despite the protest from opposition, the decision got approval in the council meeting  with the proposal submitted by the municipal commissioner G. Veerapandian.

The VMC commissioner has taken this decision under 1955 Hyderabad Municipal Corporation Act section (88), as the VMC had no option except to complete the housing project within the stipulated time. As per the norms, the VMC has to pay a penalty to the Union government in case it fails to complete the project by March 2017.

The VMC is weighing a debt burden of Rs 290.74 crore and struggling to find ways to generate revenue in all possible means. In this context, the VMC has decided to take up the unfinished works pertaining to about 4,512 units of the JNNURM housing scheme in the city at an estimated cost of Rs 100 crore by taking the Hudco financial assistance.

While 28,152 units were sanctioned under the scheme for Vijayawada, out of the total cost, the share of the Central government is 50 per cent, and the state government will contribute 20 per cent and the VMC 30 per cent.

YSRC, Left parties oppose VMC move to seek loan
Opposition YSR Congress and Left parties have been questioning the move of the VMC, which has decided to go for Hudco loan. VMC floor leader B. Punyaseela lambasted the VMC officials for their lethargic attitude in delaying the housing project.

She alleged that the VMC had failed in completing the housing works in the stipulated time and added that the officials are trying to cover up their failure by seeking Hudco’s financial assistance. It is not the right move, she observed and clarified that YSRC was not against the housing project and they are only pointing out the credibility of the VMC officials and the state government.

City mayor Koneru Sreedhar, after the recently held council meeting, has stated that the VMC has written a letter to the state government in April this year seeking to sanction Rs 117.92 crore interest free loan for completing the pending 4,512 units in the city under JNNURM scheme.

The VMC has conducted a detailed survey a few months ago to identify the eligible beneficiaries, he said, and added that the state government has instructed the corporation to complete the construction of pending houses by getting a financial assistance of Rs 100 crore from the Hudco.

Now, the question before the VMC is who will clear the interest to the Hudco, whether the VMC or the state government, for which the government didn’t give any clarity till date. In case the VMC has to bear the interest charges, the same will be levied on the public in the form of increase in the taxes.