The redevelopment of Kadri and Kankanady markets in the city is in doldrums due to an issue related to the funding pattern.
However, a solution to the issue appears to be on the cards now about two years after the foundation stones for the projects were laid.
Mangaluru City Corporation laid the foundation stone for building the ₹ 12.30 crore modern market-cum-commercial complex at Kadri in March 2018, while the foundation stone for the ₹ 41.50 crore modern market complex at Kankanady was laid in February 2019.
The projects were launched after fixing the funding pattern for both the projects at the ratio of 50:30:20. It meant that the projects were to get 50 % of the estimated cost as loan from the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) and 30 % of the total cost as loan from any nationalised bank. The corporation would have had to bear the remaining 20 % cost.
Whip in the city corporation council Premananda Shetty told The Hindu that the then administration in the civic body launched the projects in a hurry when there was no clarity on the availability of funds. None of the nationalised banks had committed their loan as the interest rate for the bank loan had been fixed at 7.90 %. While the interest rate for the KUIDFC loan had been fixed at 6.50 %.
“No bank came forward to sanction loan as the interest rate was very low,” he said and added that it forced the present administration to revise the funding pattern which is now awaiting the approval of the government.
In the revised funding pattern, no loan from any nationalised bank will be taken.
As per the funding pattern revised for re-building the Kadri market, 70 % (which is ₹ 8.60 crore) of the total project cost will be borrowed as loan from the KUIDFC at 4.65 % rate of interest. The balance 30 % (₹ 3.70 crores) will be borne by the city corporation from its enterprises fund.
According to the funding pattern revised for Kankanady market 70 % loan (₹ 29 crore) will be taken from KUIDFC and 30 % (₹ 12.50 crore) will come from Mangaluru Smart City Ltd. as its margin money, including from its enterprises fund.
He said that the major financial issue to complete the projects will be addressed once the government approved of the revised funding pattern.
Mr. Shetty said that the total project cost of the Kankanady market might go up.