A precarious financial crisis haunts GHMC

Hyderabad: With the Greater Hyderabad Municipal Corporation (GHMC) shells out '1.3 crore towards interest every day for the loans taken earlier, the grim reality is that the financial condition of the corporation is likely to worsen further in the days ahead. A reason for this is the repayment of the loan taken for executing the Strategic Road Development Plan (SRDP), the quarterly repayment of which is scheduled to begin next month.

Under SRDP, the BRS state government had built a series of flyovers, underpasses, roads underbridges and roads overbridges and a cable bridge over Durgam Cheruvu, among several other infrastructure projects.

The state government had in 2017 accorded permission to GHMC to borrow Rs 1,000 crore through bonds and Rs 2,500 crore through Rupees Term Loan (RTL) to execute SRDP projects. While the coupon rate (the rate of interest paid by bond issuers) varies from 8.90% to 10.23%, the rate of interest for RTL varies from 7.20 % to 8.65 %.

The other major loans that have been availed include '1,500 crore for the comprehensive road maintenance programme (CRMP). This was taken to restore the entire network of 811 km main roads within the GHMC limits. An additional '500 crore was borrowed for construction of dwelling units under the 2BHK housing scheme.

“A loan was availed even to execute SNDP works,” said a GHMC official.

The Assembly election further dented GHMC coffers as many of its staffers were on election duty. The major sources of income for the civic body are property tax collection and issue of building permits. However, due to election duty, bill collectors could not focus on collection of property tax arrears.

“A staggering '7,000 crore property tax is due to the GHMC from buildings owned by the state and central governments. Earlier, even Pragathi Bhavan was in the defaulters list,” pointed out an official from the corporation.