PMC to issue bonds for 24|7 water project funds

Civic body’s revenue is shrinking, but it wants no delays in the initiative
Keen to get its ambitious 24×7 water proK ject going as soon as possible, the Pune Municipal Corporation (PMC) has de cided to issue bonds for raising money to complete the project within the stipulated deadline of five years. The project approved over nine months ago, has already run into obstacles in the form of funding issues and the election code of conduct.After the project was passed in February this year, PMC had launched a campaign of offering free water meters. The civic body put up hoardings and invited citizens to register their names through its official Twitter handle, too. The deadline to mount meters was October 2, but it was missed as tender process stopped due to the election code of conduct of the Maharashtra Legislative Council (MLC) election. Now, tendering is complete and PMC is unwilling to let the lack of finances delay the project further.

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