The Times Of India      13.09.2010

GHMC still in a financial mess

HYDERABAD: Despite several steps taken to improve its financial health over the past year, the Greater Hyderabad Municipal Corporation (GHMC) seems to be still struggling to get out of the financial crisis.

GHMC sources said the civic body needs at least another Rs 1,500 crore to settle its liabilities, which includes Rs 527 crore for payment of its share for works being taken up under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Rs 465 crore overdraft availed from a bank three years ago.

Apart from these commitments, the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) has sought Rs 130 crore as 25 per cent share in the property tax revenue. The municipal administration and urban development (MA&UD) department had issued a GO two years ago giving 25 per cent share to the Water Board, but the corporation has not paying it yet.

The Hyderabad Metropolitan Development Authority ( HMDA) has also been demanding nearly Rs 400 crore development charges being collected by the corporation from building permission applicants, which has been pending for the past three years.

Now, the GHMC is looking for a financial institute which can bail it out of the mess by lending a Rs 600-crore loan. GHMC in its last standing committee meeting has accorded permission to avail a loan of Rs 600 crore for payment of its urban local body (ULB) share for JNNURM works.

"The corporation is contemplating to take a loan from Hudco or any nationalised banks. The GHMC has written a letter for the approval to take the loan," GHMC additional commissioner (Finance) S Hari Krishna told TOI.

The civic body slipped into financial crisis after CVSK Sarma took over as GHMC commissioner, who had given sanctions of Rs 2,000 crore worth works in a year without considering the financial condition of the Corporation. About Rs 120 crore old pending bills were cleared to contractors by the corporation.

"Utmost important liability is payment of GHMC contribution for JNNURM works which comes to about Rs 527 crore. The Centre had sanctioned Rs 2,027 crore worth works like flyovers, nalas and Charminar Pedestrianisation Project (CPP) and housing project for GHMC since 2005. The amounts released by the Centre were spent on works. However, it did not release its share and managed the works by diverting funds released for other works like modernisation of nalas," a senior official of the corporation said.

Sources said GHMC commissioner Sameer Sharma had contemplated to hike the property tax by 30 per cent to garner more funds which was not agreed by the standing committee of the municipal corporation a week ago. Similarly, several austerity measures were taken up like fixing a cap of Rs 150 crore for each zone for the current fiscal.

However, analysts say the commissioner was imposing restrictions on development works and failed to control wasteful expenditure spent on corporators.