Kothagudem Municipal Corporation’s efforts to get Rs 600 crore funding under UCF runs into trouble

Kothagudem Municipal Corporation’s proposed Rs 600-crore Urban Challenge Fund project has run into controversy, with corporators questioning the DPR tender process and financial viability. The MLA has cancelled the tender following complaints and said the process would be conducted online.

Kothagudem: Kothagudem Municipal Corporation’s (KMC) efforts to obtain Rs 600 crore funding under the Centre’s Urban Challenge Fund (UCF) scheme stumbled at the gate.

Many corporators have doubted the project feasibility and questioned lack of transparency in the selection of agency for preparing a detailed project report (DPR) for development of mobility corridor under transit oriented development (TOD)-2026.

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StratAlign Advisors Pvt. Ltd. of Hyderabad was given the work order on July 15 for a fee of 1.6 percent (Rs 9.60 crore) of the project cost. The Centre and the State governments each contribute 25 percent of the project cost while 50 percent has to be mobilised through bank loans and others. Of the Rs 600 crore, the KMC proposed to take a loan of Rs 300 crore from a German bank.

Speaking to Telangana Today, an independent corporator Kambhampati Durga Prasad stated that opening a tender worth Rs 9.60 crore allowing a submission period of only three days was contrary to the regulations.

Similarly, as only two tender applications were received, the process should have been cancelled and the tender re-conducted online; instead, municipal officials proceeded to open the tenders invited in off-line mode in violation of rules, he said.

The KMC has already been paying an interest of Rs 39 crore annually for loans worth Rs 222 crore while its annual income is only Rs 20 crore. Major part of the income goes towards salaries and maintenance costs.

In view of the above, it is unnecessary to throw the KMC into yet another debt trap, Durga Prasad and a BRS corporator Bhima Srivalli said, adding that development works could be carried out using SCCL’s District Mineral Foundation Trust (DMFT) and CSR funds.

The SCCL has been spending DMFT and CSR funds at places like Madhira, not affected by coal mining, while ignoring Kothagudem. Instead of bank loans, the KMC should use DMFT, CSR funds and grants that are non-repayable, they said.

Meanwhile, Kothagudem MLA Kunamneni Sambasiva Rao on Thursday told the media that he was cancelling the DPR tender in view of the complaints against it. The DPR process would be undertaken online soon.

Finding fault with the MLA’s action Durga Prasad stated that decisions and announcements related to the corporation administration have to be made by the municipal commissioner not the MLA.