The Hindu : Karnataka / Bangalore News : BMP not ready with fresh MoU on finances

Online edition of India's National Newspaper
Thursday, Dec 30, 2004

Karnataka

Karnataka - Bangalore

BMP not ready with fresh MoU on finances

By Afshan Yasmeen

BANGALORE, DEC. 29. Six months after the lapsing of the memorandum of understanding (MoU) between the Bangalore Mahanagara Palike (BMP) and the State Government on attaining a sound financial status, the civic body is still not ready with a fresh agreement.

While BMP officials claim that the Standing Committee on Taxation and Finance has requested the Government to extend the MoU term for another two years, sources in the Housing and Urban Development Department say it is unlikely that the Government will consider the plea.

The civic body has started work on preparing a draft of the terms of reference for a fresh agreement. But hoping that the MoU term will be extended, the officials are still not ready with the fresh agreement, corporators say.

The BMP signed the earlier MoU with the State Government on July 12, 2001. Apart from attaining a sound financial status, the aim was to adopt efficient operation and maintenance systems. The MoU was to enable the BMP to get a Rs. 250-crore Government grant and a Rs. 627-crore loan (HUDCO and Karnataka Urban Infrastructure Development and Finance Corporation) with State support. With a Rs. 111-crore contribution from the BMP, Rs. 988 crores has to be used for comprehensive development of storm-water drains and underdeveloped areas, rejuvenation of old areas and flood management works, and completion of ongoing projects.

Though the former Mayor P.R. Ramesh, during whose tenure the MoU lapsed, had claimed that half the MoU commitments had been implemented, sources in the department told The Hindu that the Government had observed that some important promises made by the BMP while signing the agreement had not been kept.

"Though the MoU had mentioned about levy of infrastructure and solid-waste management fee for revenue mobilisation, it is yet to be introduced. The project to widen roads in old Bangalore has not yet taken off. The Government has observed all these points and it is unlikely that the term of the MoU will be extended," the sources say.

But BMP officials justify the delay in the implementation of these promises. "The new fee can't be levied because we are waiting for approval from the Government. And the road widening project is pending because the Government has not notified the amendment to the Town and Country Planning Act. We can implement the Transferable Development Rights (TDR), which will facilitate land acquisition without paying compensation to owners (they will be given an additional floor area ratio) only after the amendment is notified," the sources say.

The 2001 MoU had given priority to effective solid waste management, development of new wards, rejuvenation of lakes and construction of grade-separators and multi-storeyed car parking lots. The sources say that the new MoU will concentrate on road widening and traffic improvement. Following the MoU, the BMP introduced the fund-based accounting system to bring in fiscal discipline, buoyancy in revenue and reforms in administration.

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