Nellore: Hudco's stand on budget sanctions raises concern

Nellore: Public Health Department and Nellore Municipal Corporation are in a fix over payment of around Rs 160 crore dues to contractors who have executed the work as part of the estimated Rs 1077 crore underground drainage and drinking water supply improvement schemes being funded by the Housing and Urban Development Corporation Limited (Hudco).

The contractors have given enough hints to stop the work since no payment has been made to them for the last three months but Hudco is not willing to release the amount unless the state government makes budgetary allocation for the loan amount. The loan was sanctioned after the AP State Government produced a counter guarantee on behalf of Nellore civic body to Hudco which is a public sector undertaking wholly owned by the Union Government.

Hudco earlier released nearly Rs 435 crore unconditionally but is now insisting on budgetary allocation by the state government to release funds to the schemes, a Public Health wing official said expressing surprise over Hudco stance. "We have been trying to convince the contractors not to stop the work because any interruption would hit the estimated cost as well as scheduled completion of the schemes," the official said.

He added that the issue was beyond their control. Urban development minister P. Narayana himself has taken up the subject to ensure budgetary allocation to carry out the works without a break. The fund-starved civic body is also in doldrums over payment of Rs 11 crore quarterly interest to Hudco towards funds released for the two schemes till date. Commissioner of the civic body S. Dilli Babu said that the government would take care of the payment. In fact it is beyond the capacity of the civic body to service loan, be it interest or principal, and the opposition parties highlighted this aspect ever since it was proposed to borrow loan but their concern fell on deaf ears.