BBMP pays Rs 60 crore interest for Rs 73.40 crore loan!

The BBMP had taken a loan of Rs 73.40 crore in 2006 from KUIDFC. The loan was to be repaid by 2011 with an interest of Rs 23.33 crore totaling Rs 97.73 crores.  Interestingly the KUIDFC has written 21 reminders to BBMP to repay the loan. Details regarding the civil works taken up in 2006 utilising the loan amount has been asked. 

Due to the inefficiency of BBMP officials, BBMP has to pay Rs 60 crore interest on a KUIDFC loan of Rs 73.40 crore. The interest was not paid from the past 7 years, resulting in compound interest taking the total to Rs 60 crore. Strangely the BBMP officials have not mentioned the loan in budget. KUIDFC has now issued a notice asking the BBMP to pay up the compound interest, reported Kannada Prabha.

The BBMP had taken a loan of Rs 73.40 crore in 2006 from the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) for funding various projects. The loan was to be repaid by 2011 with an interest of Rs 23.33 crore totaling Rs 97.73 crore. However, the BBMP neither paid the interest nor the principle amount and KUIDFC has imposed compound interest.

Interestingly the KUIDFC has written 21 reminders to BBMP to repay the loan. The officials did not give any information about it either to the KMRP chief engineer or Executive Engineer Accounts Department. 

On 30 December 2016 to 30 March 2017 BBMP has paid Rs 36.31 crore principle and Rs 38.08 crore interest, Rs 19.84 crore as compound interest a total of Rs 94.24 crore to KUIDFC. Even now the BBMP has to pay another Rs 61.42 crore interest. Hence, this amounts to paying Rs 60 crore interest to a loan of Rs 73.40 crore.

The Accounts Standing Committee member Gowtham Kumar has sought details regarding the civil works taken up in 2006 utilising the loan amount. Until now the officials have not submitted any details, giving reason to suspect. The additional Rs 20 crore compound interest has to be paid by the sheer neglect if the officials, Hence the commissioner should order an inquiry and take action against the defaulters Gowtham Kumar urged.