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Government to finalise financier for the drainage project

Staff Reporter

Administration keen on implementing project at the earliest

PONDICHERRY: : The government is all set to finalise a financial institution to undertake its ambitious Rs 234-crore project to convert the open drainage into underground system.

The government has almost zeroed in on three major financial institutions, one a foreign bank, to fund the project.

Earlier, the government was contemplating between Housing Urban Development Corporation and Institutional Leasing and Financial Services (ILFS), to finance the project.

Lately an offer to fund the project came from Japan Bank for International Cooperation (JBIC), which two years ago backed out from the project.

On June 20, two representatives from the JBIC held discussions with the PWD officials and in principle agreed to fund the project. In September the representatives from JBIC are slated to hold another round of discussions with the officials, sources said.

If the JBIC gets the node, they would fund 80 per cent of the project. The money would be directed through the Central Government as a loan for 50 years at an interest of 0.5 per cent. For the first 10 years the government need not pay the loan amount.

The offer from ILFS is bit heavy as far as repayment period is concerned and also on interest front. The amount has to be paid back in 25 years with 8 per cent interest. For the first five years the government need only pay the interest.

With the loan payment offer, the ILFS has also promised to undertake the work by them and complete it in two and half years.

"In all possibility we might choose between ILFS and JBIC as the other contender did not show any interest after it presented the detailed project report some time ago" said a highly placed officer in the PWD.

It is also reliably leant that JBIC while presenting their case has also sought a report on whether the public will pay more, if there is a hike in the sewerage charge after it is converted underground. It is not clear the government has given any assurance in this regard. Top officials would only say that the government was keen on starting the long pending project at the earliest.

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