Srinagar, Aug 1: The Jammu and Kashmir administration has decided to borrow an additional loan of Rs 250 Cr from J&K Bank as an earlier floated Expression of Interest (EoI) by J&K Infrastructure Development Finance Corporation Limited seeking Rs 1000 Cr has yet to materialize.
The J&K government has incorporated Jammu and Kashmir Infrastructure Development Finance Corporation (JKIDFC) Limited to raise funds for languishing projects in the Union Territory.
“JKIDFC on December 4 had floated EoI in which two financial institutions i.e., Housing and Urban Development Corporation (HUDCO) and State Bank of India (SBI) participated. The HUDCO was found L1 (Lowest bid) and an offer was extended to HUDCO for providing a loan of Rs 1000 Cr. However, HUDCO had certain observations and to resolve such observations, meetings at the level of CMD and Executive Directors were held a number of times," reads a note of 14th Board of Directors meeting of JKIDFC chaired by the Chief Secretary Arun Kumar Mehta.
“Further all the required information asked by the HUDCO has been provided. The HUDCO has informed that they are in the finalization of the loan to be provided to the JKIDFC. But the Board was informed that till such time HUDCO finalizes its offer of providing loan of Rs 1000 Cr, the JKIDFC may approach J&K Bank for providing additional loan as per the requirements of the Corporation so that till EoI is finalized, payment to the languishing projects is made unhindered,” it specifies.
“It was decided by the Board to approach J&K Bank for an additional loan facility of Rs 250 Cr and to fix the interest rate @ 7.9 percent or lower. The Board has given consent to the raising of a loan of an amount of Rs 250 Cr from J&K bank," reads a note of meeting.
As per the officials, the delay in finalizing the loan facility by HUDCO has held-up the release of payments of scores of contractors, who have completed works on languishing projects. Consequently they are now running from pillar to post for their payment.
After identification of over 6000 languishing projects in July 2018, the government of Jammu and Kashmir came up with a creative idea of establishing Jammu & Kashmir Infrastructure Development Finance Corporation (JKIDFC) to raise loans up to Rs 8,000 Cr to fund completion of these projects.
For servicing of the loans raised from various financial institutions/nationalized banks, dedicated revenue streams of road tax, electricity duty, toll tax, timber extraction and water connections have been streamlined for JKIDFC in particular. 2357 projects for an amount of Rs 7110.66 Cr have been approved, out of which 1100 projects for an amount of Rs 1555.16 Cr have been completed.