Major funds crisis hits KMC

KOLKATA: Don't be surprised if the potholed road outside your house is not repaired in months or if garbage goes uncollected from your locality. Such routine services may suffer given the financial crisis the civic body is into.
The Kolkata Municipal Corporation's (KMC) monthly bills towards salaries and pension is Rs 700 crore, its electricity bills Rs 200 crore and its expenditure on civic services Rs 1,300 crore.Taken together, that exceeds its receipts of Rs 1,400 crore, of which Rs 700 crore comes from the state government and the rest from the KMC's generation of taxes and fees.
The crisis is likely to aggravate once the civic body is burdened with additional responsibilities such as water supply, road repairs, bridges and street lightning that are now under agencies like the PWD, KMDA and HRBC. The latter are slated to be brought under the civic body soon. "We need to pay the contractors Rs 400 crore which has been pending since January. We have only Rs 260 crore as fixed deposits in banks. The problem is really grave," admitted a KMC official.
Mayor Sovan Chatterjee is thus looking to the state government for a bailout to keep the services running - in the form of a nod to a proposed property tax waiver scheme and an additional Rs 200 crore for taking up the added responsibilities. However, this won't be enough as maintenance work will require as much as Rs 1,300 crore.
The mayor is thus exploring other means as well. He has asked KMC bosses to explore avenues of taking soft loans from financial institutions. In the first phase, civic authorities will ask for Rs 250 crore as soft loan from nationalized banks, a KMC official confirmed. Initially the mayor was keen on mopping up money from the market by issuing bonds following the footsteps of his predecessor Subrata Mukherjee. But he dropped the idea because that would take more time.
The crisis, however, comes in a chain reaction. The cash-strapped state government looks to the Centre for a bailout package, so does the KMC to the state government. The KMC's revenue generation is shrinking too.
According to civic bosses, the cost of taking up additional responsibilities as announced by the chief minister would cost KMC another Rs 200 crore. "We have taken over a number of properties from KMDA, KMW&SA, PWD and HRBC. We need an estimated Rs 200 crore right now for routine maintenance and upgrade of these," a KMC roads and engineering department official said. The upgrade of the Garden Reach water treatment plant, which the KMC recently took over from the KMW&SA, will cost Rs 50 crore besides a recurring expenditure for its maintenance, a KMC water supply department official said.
The mayor has already sent an SOS to chief minister Mamata Banerjee, requesting Rs 200 crore in addition to the routine state support of Rs 530 crore. If things continue like this, KMC's financial responsibility toward the ongoing infrastructure projects under the JNNURM will also take a beating. Some of these essential infrastructure projects include a water transmission line from the Dhapa water treatment plant under construction, laying of a dedicated water pipeline from the Palta water treatment plant to the Tallah water reservoir and pumping station and desilting of the city's major brick sewer lines along Rashbehari Avenue, Hazra Road and Beadon Street.
And, the pilot project for Kolkata's beautification that is likely to begin from August entails an estimated Rs 50 crore that the mayor has promised the CM.