The Hindu  13.12.2010

Corporation facing financial crisis

Staff Reporter

to contractors

KOCHI: With the plummeting revenue collection and increasing expenses, the Kochi Corporation is heading for a financial crisis. The crisis has reached a critical stage where the corporation is finding it difficult even to raise money for disbursing the salary of its employees. This month, the civic body will have to find resources for paying the salary of December and advance salary for the month of January. Each month, the corporation requires around Rs.2.5 crore for paying salaries. A similar situation arises during Onam also, when the civic body will have to find resources for paying two salaries in a month. This month, the corporation will have to raise at least Rs.5 crore for clearing the salary bills alone.

The contractors of the civic body are also understood to have stepped up pressure for getting the bills of the completed works cleared. Going by rough estimates, the corporation owes the contractors something around Rs.15 crore.

The corporation is not in a position to fully clear the pending bills of the contractors. Instead, funds will be released to the contractors in a phased manner and in tune with the financial position of the civic body. The average daily revenue earnings of the corporation is around Rs.12 lakh, which according to the civic administrators, is quite low. The own funds of the civic body has also been exhausted. A large number of tax payers seemed to have developed slackness in paying the bills, postponing the payments to March, which might have reflected on the revenue collection, said a civic administrator.

Considering the gravity of the situation, the civic authorities are planning to convene a meeting of the officials of the Revenue Department this week. The Revenue Inspectors would be directed to intensify the revenue collection, he said.

At the same time, the corporation is also exploring the option of seeking financial assistance from the Finance Minister. The civic administrators have plans to apprise the Finance Minister of the grave financial situation.

The Times of India         10.12.2010

Govt asks NMC to pay entire escalated cost of Ram Jhula

NAGPUR: Ram Jhula, the crucial six-lane, cable-stayed railway overbridge being constructed to replace the 100-year-old Santra Market bridge, has become embroiled in a fresh dispute. The nodal agency, the Maharashtra State Road Development Corporation (MSRDC), is asking Nagpur Municipal Corporation (NMC) to pay the escalated cost of the project.

Mayor Archana Dehankar said minister for public works (public undertakings) Jaidutta Kshirsagar, guardian minister Shivajirao Moghe and former minister for public works Anil Deshmukh had in a meeting held in Kshirsagar's chamber asked NMC to pay Rs 45 crore towards the escalated cost of Ram Jhula.

On Thursday, Kshirsagar convened a meeting to discuss the stalled project and also invited municipal commissioner Sanjeev Jaiswal and leader of opposition Vikas Thakre. Dehankar says Kshirsagar straightway told her that contractor Afcons had stopped work since May and was demanding Rs 95 crore now against the original cost of Rs 45.95 crore mentioned in the work order issued in 2006.

In 2008, the company was granted an escalation to Rs 60 crore for the 607-metre ROB. Now, Afcons is demanding Rs 95 crore and the government wants the escalated cost to be paid by the civic body.

However, MSRDC managing director Bipin Shrimali tried to downplay the issue. He told TOI the dispute has been resolved and work would start in 15 days. Orders have been issued to the contractor, he said.

On the cost-sharing, Shrimali said the funding pattern has not been decided yet. "Being a partner in the project, we feel 50% of the escalated cost should be shared by NMC. MSRDC too is facing funds shortage," said Shrimali.

NMC standing committee chairman Sandip Joshi and ruling party leader Pravin Datke say the NMC has to share 30% cost of the entire Ram Jhula project, which comes to Rs 15 crore as per the original proposal of Rs 45.95 crore. "We have already paid Rs 8.5 crore and will soon pay the balance amount. Why should the NMC suffer for the mistake of the contractor and MSRDC?" they asked.

Joshi said NMC is surprised Afcons stopped work to demand escalated cost, and the government is asking the cash-strapped NMC to pay the escalated cost. "Although there is a provision to claim escalated costs, this is not the way. There should be some basis about the difference of cost. In the civic body you need to justify it by submitting item-wise claim of escalation and approve it in the general body meeting and also from the standing committee," said Joshi.

"The civic body is ready to share Rs 15 crore of the escalated cost. But at a time when the civic body is managing other JNNURM projects on BoT basis too, and procuring loans to pay its 30% cost, how can it pay the entire escalated cost of Rs 45 crore for the project?" Datke asked.

Ram Jhula was to be commissioned in 2009. The date for completion was extended to April 2010 and now has been given another extension till September 13, 2011. However, it is nowhere near completion.

Meanwhile, BJP MLAs from Nagpur Sudhakar Deshmukh (west), Krishna Khopde (east) and Vikas Kumbhare (north) staged demonstrations against the stalled project on Thursday.