Tuesday, April 20, 2010

No funds: BBMP stops major works

No funds: BBMP stops major works
Will Resume After New Council Presents Budget
Aarthi R | TNN

Bangalore: Unlike at other times when ongoing works are continued even after the financial year ends in March, the Bruhat Bengaluru Mahanagara Palike (BBMP) this year has instructed officials to stop all major works.
This follows a circular issued by BBMP commissioner Bharat Lal Meena “immediately’’ after the civic polls. “No more new works to be taken up till the budget is approved and all works in progress across the city to be immediately stopped as on March 31, 2010,’’ says the circular dated April 6, 2010, a copy of which is with TOI.
Though BBMP defends it verbally citing the new council formation, the circular has no reference to it. It indirectly hints at the impending fund crunch as the primary reason. “Major development works were taken up in the newly added zones during the past two financial years in anticipation of pooling all financial resources. However, this instruction comes after the large number of pending bills which piled up at the end of previous financial year,’’ it said.
The three-page circular was sent to all chief engineers, zonal joint commissioners and special commissioner (projects), instructing them not to grant technical or administrative approval to any new projects till further notice.
Until now, these approvals were restricted only to the commissioner. It also stalls any new expenditure apart from the immediate ones already sanctioned by the commissioner.
The sudden insistence on ‘financial discipline’ has fuelled speculation of acute financial crisis and mismanagement of funds. However, BBMP commissioner Meena said: “There’s no financial crisis. This circular was to bring in some financial discipline in staff, considering our increasing liabilities. This will also help our budgetary exercise.’’
According to urban experts and civic activists, the biggest challenge for the newly elected council would be to audit past works and bring in more transparency into the system.
The BBMP submitted a masterplan for Bangalore worth Rs 22,000 crore. The state budget 2010-11 projects a vision policy of Rs 18,872 crore to be spent on the city over the next three years.
“This sudden financial crisis is ridiculous! Why does it follow immediately after the elections? Did the BBMP not think about this while sanctioning the previous projects? Projects worth thousands of crores of rupees have been sanctioned in the absence of an elected council. There has been no audit till date. Why suddenly decide on an audit only for this budget?’’ former mayor P R Ramesh asked.
2009-10: Nearly 15,301 works worth Rs 4,188.38 cr were started across 147 wards and in various stages. Of this, Rs 1,684.24 has been paid in 2009-10. The balance Rs 2,504.13 crore is expected from the budget for 2010-11
There may be very few or no new works taken up at all by BBMP for 2010-11, said sources. One reason being the outstanding bills for 2009-10 piling up despite the increasing loans
LOOKING AHEAD By a rough estimate, even with a realistic budget of Rs 4,495 crore likely to be proposed by the BBMP for 2010-11, the total liability will be around Rs 3,390 crore. Of this, 2,504.13 crore will be spent on completion of 15,301 works taken up during 2009-10 and at least Rs 895 crore will be spent as interest on loans
BBMP’s latest borrowal was Rs 1,000 crore from three nationalized banks to clear outstanding bills as on November 2009 for works taken up that year. The borrowal was permitted by a government order dated March 6, 2010 based on a resolution passed by the BBMP administrator on January 6, 2010
This loan was in addition to the earlier borrowed Rs 959.7 crore from IDBI and Rs 500 crore from Internal Extra Borrowing Resources. All to clear work orders worth Rs 4,188 crore issued in 2009-10
Budgetary allocation for the past year was only Rs 1,857 crore. More than half the amount came through loans. As on December 29, 2009, the outstanding figures had already touched Rs 1,667.50 crore


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