The Hindu : Kerala / Thiruvananthapuram News : KWA’s debt to be converted to equity

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Thursday, Jan 17, 2008
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KWA’s debt to be converted to equity

Staff Reporter

In order to shore up its balance sheet, says Thomas Isaac

Thomas Isaac says KWA will have to enhance productivity

THIRUVANANTHAPURAM: The government will convert a part of the Rs.2000 crore that the Kerala Water Authority (KWA) owes it into ‘shares’ and will write off the rest in order to help the KWA shore up its balance sheet, Finance Minister T.M. Thomas Isaac has said.

He was speaking at the inauguration of the pilot project of the IT-enabled service delivery project initiated by the KWA here on Wednesday. Chief Minister V.S. Achuthanandan inaugurated the pilot project for Thiruvananthapuram district.

Mr. Isaac later told press persons that close to Rs.1,000 crore, the capital amount owed by the Authority, would be deemed as government equity in the KWA. The rest was the interest that accumulated over the years. This would be written off. “Once this is done, KWA can approach agencies for loans. Otherwise this Rs.2000 crore will be seen as the KWA’s liability and nobody will give loans. This way the Authority can have a clean balance sheet,” he explained.

A top KWA official told The Hindu that the State government gives money to the KWA as loans. The loan capital would now be converted from the government’s ‘loans’ head of account to its ‘capital contribution’ head of account. This move by the government was the outcome of a representation made by the KWA. As on March 31, 2007, the loan amount was Rs.841.68 crore and the interest amount — which would be written off — was Rs.998 crore. As on date the loan amount was Rs.1357.15 crore; this included the JBIC loan, the official added

Earlier, in his address, Mr. Isaac said the KWA on its part would have to enhance its productivity. “Why can’t the KWA become an acknowledged consulting agency? The view of the LDF government is all the loans taken or projects taken up should ultimately strengthen the KWA,” he said.

In his address, Minister for Water Resources N.K. Premachandran said the government had sanctioned 48 new posts in the authority to better supervise and implement the JBIC scheme.

The IT-enabled service delivery project would be implemented in all 14 districts in the State in six months to one year, he said.

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