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Mayors divided over ADB's conditions on loans

K.S. Sudhi

KOCHI: Five municipal corporations in the State that are awaiting financial assistance of Asian Development Bank (ADB) for infrastructure development progra mmes stand divided over their approach towards the funding programme. The financial aid for the municipal corporations is to be distributed through the Kerala Sustainable Urban Development Project.

While the Kochi Corporation has termed the ADB conditions for availing the Rs.290.35-crore loan as unacceptable, the Thiruvananthapuram Corporation has left the decision to the new council that will assume office after the civic polls. The Thrissur Corporation has accepted the proposal and is waiting for the next stage of implementation of projects. While the Kozhikode Corporation is yet to discuss the final report, the Kollam Corporation is awaiting it. The decisions of the municipal councils are significant as their terms come to an end this month.

The Kochi Corporation Council, which met on Friday, felt the 9 per cent interest slapped on the loan was exorbitant as several financial institutions were willing to fund projects at lower interest rates. "If the funds are accepted as per the conditions stipulated by the bank, the corporation will end up in a debt trap," Kochi Mayor C.M. Dinesh Mani said.

Thiruvananthapuram Mayor J. Chandra said there were several conditions in the final report that were detrimental to the interest of the civic body. These included the proposal for collection of drainage tax from the people and high interest rate on the loan amount. "As the term of the incumbent council ends within one month, we have not discussed the report. Let the new council discuss it and take a decision," she said.

Thrissur Mayor K. Radhakrishnan said the council had accepted the Rs.185-crore ADB proposal. It was assured that the interest rate would be 3 per cent. The corporation had not received any communication contrary to the assurance, he said.

Kozhikode Mayor Thottathil Raveendran said the council had not discussed the final report of the bank. Kollam Mayor Sabida Begum said the corporation would not accept any proposal that would increase the tax burden on people.

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