GHMC borrows for road maintenance too - Telangana

City Secretary of the CPI(M) M.Srinivas, who obtained the information through an RTI petition, castigated the government for not allocating funds for GHMC towards SRDP, CRMP, link roads and Strategic Nala Development Project during the last seven years.

The civic body had earlier borrowed ?2,500 crore for the SRDP projects. ?1,460 crore borrowed from the SBI

The swanky, smooth main roads in the GHMC area come with a heavy cost.

Spectre of huge debt burden looms over not only the creation of road infrastructure under the Strategic Road Development Plan (SRDP), but also the regular maintenance of major roads by private agencies under the Comprehensive Road Maintenance Programme.

GHMC has borrowed a sum of ?1460 crore from the State Bank of India (SBI) just for maintenance of the city roads for five years under CRMP. Earlier, the civic body had borrowed ?2,500 crore for the SRDP projects, under which several fly-overs, ROBs, underpasses and other structures are under construction at various locations in the city. Interest rate

While the rupee term loan for CRMP has been sanctioned at an interest rate of 7.2 per cent per annum, SRDP loan has been availed at 8.65 per cent per annum. The interest rate is hinged on the stipulation that GHMC’s external credit rating remains ‘AA’, any slip in which would entitle the bank to charge higher interest with retrospective effect!

In order to repay the loan, GHMC has proposed to impose ‘Special Development Charges’ the details of which are not available in the agreement copy. The charges will go directly into the Escrow account created for this purpose. Further, GHMC has pledged all its current assets with the bank as collateral security. State government, however, stood as guarantor only towards the second term loan for CRMP to an extent of ?1,500 crore.

Initially when CRMP was mooted at the end of 2019 as private maintenance contract for major roads, the cost was supposed to be borne from GHMC’s own funds, as the civic body had already been spending over ?200 crore on road maintenance with not much result on the ground.

However, with the onset of COVID-19 and resultant loss to the coffers, financial viability of the project has become doubtful, forcing GHMC to go for loan in September, 2020, sources informed. Officials however maintain that the decision for loan was taken so as not to affect the other programmes of the civic body.

City Secretary of the CPI(M) M.Srinivas, who obtained the information through an RTI petition, castigated the government for not allocating funds for GHMC towards SRDP, CRMP, link roads and Strategic Nala Development Project during the last seven years.

Besides, GHMC’s own funds to the tune of ?437 crore have been transferred to the Hyderabad Road Development Corporation (HRDCL), a special purpose vehicle for development of city roads, for which funding was promised from government. As a result, the civic body which had surplus funds at the time of state formation in 2014, now has a loan burden of ?4,595 crore, paying ?30 crore interest per annum, he said.