This is the first time that the corporation will issue bonds for a development project. As per PMC estimates, the water supply project is expected to be put into action over the next five years at a cost of Rs 2,800 crore and will ensure that every household in the city has uninterrupted water supply.
Ulka Kalaskar, chief accountant of PMC, said, “With diminishing corporation revenue, we have to take soft loans to implement different infrastructure projects. At present, we are getting revenue which is useful for maintenance and small projects. For bigger initiatives, we have to get funding from the open market through soft loans as well as floating bonds. For the water project, we have started work to issue bonds to raise money. We are preparing documents which mention projects details, refund pattern before going to private bond issue. We are first time using option for funds.“
She added, “We have a balance sheet of Rs 8,000 crore which includes fixed assets and bank balance. Also, a loan takes a lot of time to complete all the formalities as compared to bonds. If we cannot complete project within deadline, costs will escalate and we will have to spend more.“
VG Kulkarni, head of PMC’s water supply department, said, “We have approached the state and central government for funding from the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA). We cannot take a direct loan without consulting the government. But, if we want to complete the project within the deadline, we have to start work such as laying pipelines and new water meters as early as possible.“
Source : TOI