Civic chief proposes to put Rs 200 cr in FD

ST Correspondent
Wednesday, 9 August 2017

The PMC will not be able to utilise the Rs 200 crore fund as the execution of the ambitious 24X7 water supply project has been delayed due to the scrapping of the tender process due to inflated costs quoted by  participating bidders. In fact, the PMC has to pay an interest of Rs 1.25 crore per month on the fund. Hence, to avoid paying interest on the fund, the PMC decided to keep the money in form of fixed deposits to earn the interest and reduce the loss. 

Pune: Municipal Commissioner Kunal Kumar took the ruling Bharatiya Janata Party (BJP) for granted in the weekly Standing Committee meeting on Tuesday. Kumar tabled an unlisted proposal pertaining to keeping Rs 200 crore raised through municipal bonds for the purpose of the 24x7 water pipeline project in fixed deposits (FD) in a bank.

However, Kumar did not inform the Standing Committee about the rate of interest on the deposit.

The PMC will not be able to utilise the Rs 200 crore fund as the execution of the ambitious 24X7 water supply project has been delayed due to the scrapping of the tender process due to inflated costs quoted by  participating bidders. In fact, the PMC has to pay an interest of Rs 1.25 crore per month on the fund. Hence, to avoid paying interest on the fund, the PMC decided to keep the money in form of fixed deposits to earn the interest and reduce the loss. 

The PMC recently scrapped the tender process for implementing the 24X7 water supply project citing a change in the tax regime and participating bidders quoting 25 per cent more above the estimated cost.
However, while tabling the proposal in the Standing Committee in an unplanned manner, the civic administration failed to inform the committee about the interest rate. It randomly mentioned that the PMC will get around Rs 1.10 to Rs 1.15 crore in the form of interest.

When asked why the committee approved the proposal blindly when it did not know what would be the rate of interest, Standing Committee Chairman Murlidhar Mohol failed to reply. Even when the NCP, Congress and the Shiv Sena moved a supplementary suggestion to return the fund of Rs 200 crore to SBI Capital to avoid paying interest as the fund will remain unutilised, the BJP voted against the supplementary suggestion.

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