The Hindu : Karnataka News : Users to pay for facilities created under NKUIDP

Online edition of India's National Newspaper
Saturday, Aug 14, 2004

Karnataka

Karnataka

Users to pay for facilities created under NKUIDP

By Our Staff Correspondent

BELGAUM, AUG. 13. A proposal for infrastructure development in north Karnataka through the North Karnataka Urban Infrastructure Development Project (NKUIDP) with assistance from Asian Development Bank in the form of "loans'' and "grants'' is seen as a message that the Government is systematically withdrawing itself from investments in infrastructure development.

"If you want development (facilities or services), you have to pay for it,'' is the message. Through the NKUIDP, the Government seems to have made it clear that the "users" will have to pay for water and other facilities in some towns and cities.

The Joint Managing Director of the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC), Atul Kumar Tiwari, told The Hindu that a provision for improved water supply, sewerage, roads, storm-water drains and solid waste management had been proposed under the project. To execute these works in a town or a city, the Government established the KUIDFC in 1993 under the Companies Act, 1956, which was essentially a nodal agency for various urban infrastructure development projects.

Reforms

Along with that, the corporation initiated certain reforms, which included revision of water tariff after improvement of service, introduction of property tax reforms, fund-based accounting system and computerisation (management information system), he said. It was planned to invest $350 million in the NKUIDP to improve the water supply network, the underground drainage system and roads, and for poverty alleviation and community development programmes, among others. Twenty-one towns with a population of more than 50,000 had been selected. They were Basavakalyan, Badami, Bidar, Bijapur, Belgaum, Bellary, Chamarajanagar, Davangere, Gadag-Betageri, Gangavati, Gokak, Gulbarga, Haveri, Hospet, Hubli-Dharwad, Jamakhandi, Koppal, Rabakavi-Banahatti, Raichur, Ranebennur and Yadgir, he added.

Consultations

Officials of the KUKIDFC are on a tour of north Karnataka to hold consultations with the urban local bodies and urban development authorities, and the people's representatives in these towns to prepare project reports. The NKUIDP will get 70 per cent of the funds as loan at 12 to 13.5 per cent interest (15 per cent in case of default repayment) and 30 per cent as grant. A five-year moratorium and a 20-year repayment period have been fixed. However, the rate of interest is subject to revision.

Green signal

Before giving the green signal to the town-level project, the KUIDFC will assess the repayment capacity of the urban local bodies, which should pass a resolution accepting the proposal. However, at a consultation meeting held here on Thursday, the people's representatives expressed "difficulties" in accepting the proposal in view of shortage of funds due to reasons such as poor collection of property taxes and other revenues.

However, such "excuses" are not a matter of any serious concern. The KUIDFC said that the urban local bodies had the potential to generate revenues. Proper management of their resources and optimising revenue collections through the reforms suggested would boost their finances and improve their repayment capacity considerably. Therefore, it was for the urban local bodies to accept the project proposal or not.

However, many argued that the Government should bear the repayment responsibility in north Karnataka since the region had been neglected for long.

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