The Hindu 16.07.2009
HUDCO to the rescue of municipal corporation
Staff Reporter
Without housing, requirement pegged at
Rs. 150 cr.
Rate of interest varies depending upon loan availed
VIJAYAWADA: The Vijayawada Municipal Corporation (VMC) officials seem to have succeeded in convincing the Housing and Urban Development Corporation (HUDCO) for sanctioning a loan to continue the ongoing developmental works.
The Corporation asked the HUDCO to provide a loan of Rs. 225 crores for continuing the projects taken up under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) programme. However, the HUDCO, after holding detailed deliberations with the VMC officials, asked the latter to revise the loan requirements. As a result, the Corporation officials are working out “how much of a loan is exactly required” if the housing projects are not included.
The figure has been pegged at around Rs. 150 crores, and the entire process of obtaining the loan is likely to be completed in a week, officials say.
The rate of interest varies depending upon the loan availed, officials explain, and it could be around 10 per cent if the loan is Rs. 150 crores.
The HUDCO, like the consortium of bankers with which the VMC some time ago held parleys, has asked for a collateral security.
Counter guarantee
To meet this requirement, the Corporation could pledge some of its properties to the HUDCO, as the counter guarantee by the State government is “a ruled out proposition”.
A consortium of bankers led by the State Bank of India (SBI) had earlier agreed to sanction a loan of Rs. 50 crores, but it insisted on collateral security.
