Nagpur:The Nagpur Municipal Corporation (NMC) may go for issuing municipal bonds on stock exchange to raise funds for execution of slew of developmental projects proposed in the city. The project is likely to be area based development proposed at Pardi, Punapur and Bharatwada in East Nagpur under Smart City Mission.
The NMC has started the process to appoint transaction advisory, private agencies for value capturing fund and credit rating. “We are hopeful of issuing work orders to the agencies in next two weeks after the consent of civic chief and standing committee,” said a senior NMC official.
The official said it may not be necessary for the NMC to issue municipal bonds and depend upon the decision of standing committee and general body. “Central government made it mandatory for the civic bodies to know its credit rating with the launch of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in 2009. The NMC had got its credit rating done in 2013. The NMC’s credit rating was ‘INR217m long term bond rating at IND AA (SO)’. But the NMC did not issue municipal bonds. Similarly, the centre had made it mandatory to get credit rating done under Smart City Mission so the process kicked-off,” he said.
Ruling party leader Sandip Joshi said NMC may think of municipal bonds with overwhelming response evoked towards municipal bonds of Pune Municipal Corporation. “It might be good for the city as decision was taken by the central and state government. We will wait for credit rating and then discuss on the move,” he said.
Sidelining municipal bonds, the NMC had executed projects worth Rs1,652 crore under JNNURM with the help of central and state government funds. The NMC’s share of 25% was managed from its own pockets and raising loan of Rs400 crore from Bank of Maharashtra.
Now, the NMC had proposed projects worth Rs3,577.77 crore under Smart City Mission. The centre will give Rs500 crore and Rs250 crore to come from the state and Nagpur Improvement Trust (NIT).
Remaining works are proposed to be undertaken through land pooling concept, PPP model and revenue to earned from regularization of unauthorized plots and structures in the proposed area based development sector. Therefore, the NMC’s special purpose vehicle — Nagpur Smart and Sustainable City Development Corporation Limited — may go for municipal bonds to raise funds for Smart City works.
The Pune Municipal Corporation had gone for municipal bonds for water supply project sanctioned under Atal Mission for Rejuvenation and Urban Transformation (AMRUT). The NMC had got sanction of Rs226.69 crore water supply project for unauthorized layouts. Under AMRUT, the centre will bear share of 33.33%, state will give 16.67% and the civic body 50%.
Only in Nagpur, the NMC will bear share of 25% while the remaining 25% share will be borne by the NIT. The NMC may not go for this project issuing municipal bonds as the NMC’s contribution comes to around Rs57 crore.