The Hindu 27.10.2010
VMC awaits government share in cost escalation
Staff Reporter
| Corporation takes up construction of houses under BSUP |
VIJAYAWADA: It’s more than a year and the Vijayawada Municipal Corporation (VMC) continues to eagerly wait for the release of the State government’s share in cost escalation of housing under Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The State government, after a much hue and cry, agreed to shoulder the cost escalation of Rs. 56.65 crore, and asked the Corporation to bear an equal amount as its share.
The VMC officials have, since then, been making representations to the Government. Apparently, there is not much progress till date. But the Corporation has a glimmer of hope that the Government would release the funds in the next couple of months.
Based on the expenditure reports submitted by the VMC, the Andhra Pradesh Urban Finance and Infrastructure Development Corporation (APUFIDC), which is the nodal agency for release of all funds under JNNURM programme, calculated that the funds released by it would cover the cost escalation also. The APUFIDC felt that the Corporation spent only Rs.178 crore on housing, and came to a conclusion that there were no dues to the Corporation, according to the official sources.
The Corporation officials are now sending a letter explaining the expenditure it incurred on housing till date. They pointed out that the Corporation spent Rs. 218.85 crore till date on housing; it includes the State’s share as well. Subsequently, the State government referred the matter to the APUFIDC. And, the APUFIDC is yet to take a decision, the sources say.
It may be recalled that the Centre had refused to revise the project cost despite the escalation, and suggested that either the State government or the VMC bear it. Subsequently, the State government issued GO 232 directing the VMC to bear the cost escalation. Later it agreed to bear 50 per cent of the cost escalation.
The Corporation took up construction of houses under Basic Services for Urban Poor (BSUP), a sub-mission of JNNURM. In all, 28,152 houses were sanctioned to the city in four phases. The cost of unit and project cost varied in each phase. The total cost of all four projects was Rs. 643 crore initially. But the total cost went up to Rs. 817.24 crore due to rise in the prices of inputs. The cost of each unit, initially, in phase-I and phase-II was Rs. 1.32 lakh and Rs. 1.40 lakh, respectively. Later, the costs have been revised as Rs. 2.08 lakh. The cost of unit in phase-III and IV is Rs. 2.40 lakh.
