NMC loses Rs 90cr funds for failing to implement reforms

Nagpur: The cash-strapped Nagpur Municipal Corporation (NMC) has reportedly lost over Rs 90 crore under the central government’s Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for failing to implement reforms. The chances of getting the funds are bleak as the government discontinued the scheme four years ago.
This came to fore from the dispute between NMC and Maharashtra State Power Generation Company Limited (Mahagenco). The civic body is supposed to get Rs 1.25 crore per month from Mahagenco for supply of 130 million litres per day (MLD) treated sewage from sewage treatment plant (STP) at Bhandewadi. The plant was commissioned in 2016. Since then, Mahagenco had been releasing the amount to NMC.
An NMC official told TOI that Mahagenco stopped paying NMC nine months ago. “The STP was constructed under JNNURM. Share of central and state funds was 70% of total project cost under the scheme. NMC was to bear remaining 30% share. Mahagenco had borne NMC’s share in STP, and NMC was supposed to pass on to Mahagenco Rs91 crore to be received from the centre and state. But NMC could pass on only Rs 79.09 crore. The centre and state deducted 10% of total project cost over NMC’s failure to implement reforms. Therefore, Mahagenco has stopped paying NMC, till the remaining amount is recovered from the monthly payments,” he said.
Under JNNURM, the government had approved 19 projects costing Rs 1,581.22 crore between 2006 and 2009. The government had set some benchmarks in reforms for NMC, including 100% collection of property tax, water bills, reduction of non-revenue water to 15%, providing all civic services through e-governance, doing all departmental works through e-governance etc. NMC had failed to achieve these reforms till the end of JNNURM in 2015, and has not achieved these reforms even now.
NMC sources told TOI over Rs 90 crore was deducted from nine projects for want of reforms. “Actually, NMC’s loss from JNNURM projects is over Rs 150 crore. Government had approved projects costing Rs 1,581.22 crore. Some projects were delayed, due to which contracts worth Rs 1,623.22 crore were awarded. The difference amount was not given by the government. Some projects witnessed cost escalation, which too was not paid by the government. NMC raised loans to complete the projects,” sources said.
NMC is yet to complete the 24x7 Water Supply Project approved under JNNURM. NMC’s loss is set to increase as this project is all set to witness huge cost escalation during completion of works.
The loss story
Govt approved 19 NMC projects under JNNURM between 2006 and 2009
Approved cost of projects was Rs1,581.22 crore
Government set benchmarks for NMC in reforms
10% of cost was withheld for failing to implement reforms
Over Rs90 crore lost as scheme was discontinued, and NMC did not achieve reforms
NMC incurred more loss due to escalation in project costs
NMC is completing projects by raising loans