NMC gets Rs 200cr bank loan taking total borrowing to Rs500cr

Nagpur: The fund-starved Nagpur Municipal Corporation has finally received approval from Bank of Maharashtra (BoM) for a Rs200 crore loan. NMC already has two loans of Rs200 crore and Rs100 crore. It has repaid 24 of 85 instalments of the first and 11 of 84 instalments of the second loan.
The bank had earlier refused the loan for want of credit rating of the civic body from any rating agency. “NMC needed money to provide it’s 30% to 25% share in major projects and had wanted to borrow Rs200 crore. The government had given its nod for the loan following which NMC started negotiating with Bank Of Maharashtra,” said standing committee chairman Virendra Kukreja.

On BoM’s insistence, NMC approached CARE Ratings Limited for credit analysis and research. “With inputs and suggestions from CARE, NMC’s accounts and finance section improved its record keeping. CARE gave us A- rating,” the standing panel chief said. “We then submitted the report to the bank and it approved the loan,” he said.

Kukreja claimed financial position of the NMC was coming back on track. During Diwali, NMC had disbursed Rs150 crore to contractors and later released Rs135 crore more, he said. Within 15 days, NMC will release another Rs50 crore to them, he said.

NMC has also cleared dues of contractors under Phase-I and II cement road programme. NMC cleared their bills of Rs38.80 crore till November end. The civic body has also paid 100% bills of various civic works carried out in Hudkeshwar-Narasala by paying Rs6.32 crore.

Besides, NMC also paid Rs27 crore to contractors entrusted with installing LED street lights across the city. “We have cleared bills of contractors who carried out works sanctioned under district planning committee. Until November end, NMC had received Rs21 crore from DPC, while it made payments to all contractors. We still have Rs5.5 crore in balance,” he said.

Kukreja clarified the loan from bank would only be used for funding mega projects.