Kerala - Kochi   

Corporation seeks loan to develop road

By Our Staff Reporter

KOCHI, APRIL 8. The Kochi Corporation is working on an innovative financing scheme for developing the Sahodaran Ayyappan road into a thoroughfare of international standards. The civic body is in the process of negotiating a financial deal with the District Cooperative Bank for releasing funds for developing the road.

While the bank will finance the development of the road, the civic body will hand over the right for displaying advertisements along the road and medians on the road to the financial institution for a fixed period.

The revenue generated from the display of advertisement will be accounted as the repayment of the loan the civic body is planning to avail. It was earlier proposed in the annual budget of the Corporation that Rs. 5 crores would be raised from the bank for developing the road.

The model road will have footpaths, lighting and other amenities, which would match any road of international standards.

However, the civic body has not yet formally approached the bank for financial aid. The Corporation would pursue the proposal after the Lok Sabha election, said the Town Planning Standing Committee chairman, K. D. Vincent.

The bank would be able to fund specific and viable development projects provided the borrowers furnish sufficient security, said the president of the District Cooperative Bank, M. M. Monayi.

The bank will have to consider factors such as the viability of the proposal and the possibility of generating revenue from advertisements, which would be used to repay the loan amount.

The bank would prefer either landed property worth the loan amount sought by the civic body as collateral security or a guarantee from the State Government, he said.

The District Cooperative Bank had earlier sanctioned Rs.80 crores to the Kochi Cooperative Medical College for constructing the hospital building and Rs. 15 crores to the Goshree bridges project.

In these cases, the loans were issued against the guarantee issued by the State Government, he said.

The Kadungalloor panchayath had availed a loan of Rs. 42 lakhs and the Muvattupuzha municipality Rs. 1 crore from the bank for setting up shopping complexes.

According to Mr. Monayi, the interest rate on such loans would range from 10 to 13 per cent and the loan tenure from five to 20 years.

The clearance from the State Government and registrar of cooperative bank would be required for the civic body and the bank to enter into any financial deal, he pointed out.

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