The Greater Hyderabad Municipal Corporation (GHMC) may soon go for another round of bonds issue to fund the ongoing components of the Strategic Road Development Plan (SRDP), the flagship infrastructural development programme towards promoting signal-free commute in the city.
The civic body has received the government’s nod to issue bonds worth ₹1,000 crore to raise funds for the scheme, and so far, it has raised funds to the tune of ₹495 crore through the route, in three phases. In 2018, the bonds were issued twice, in February and again in August, for amounts of ₹200 crore and ₹195 crore respectively.
The following year, bonds worth ₹100 crore were issued, taking the total amount raised to ₹495 crore.
The unsecured bond issue was backed by structured payment mechanism, whereby property tax, fee and user charges collected by and due to GHMC will be deposited every month in a separate no-lien escrow account for debt servicing, a statement from GHMC had informed then.
Though it was announced then that ₹200 crore more would be raised through issue of municipal bonds in 2019, the corporation refrained from doing so, owing to higher coupon rates. Instead, it explored the route of rupee term loan, and raised ₹2,500 crore through a consortium of bankers.
“Now that all the funds raised have been exhausted, the municipal corporation has decided to go for another round of bonds issue, and the matter is being discussed with the government in finer detail. The funds thus raised will be used to complete the ongoing components only. There is no proposal to raise funds for new projects in SRDP,” an official said on the condition of anonymity.
GHMC, according to the official, could redeem the permission to raise ₹505 crore more through the issue this time, provided the coupon rate is affordable. However, officials from the Finance wing of GHMC have denied reports about bond issue.
The cost of the SRDP, initially pegged at ₹25,000 crore, has escalated to over ₹35,000 crore over the years, as per official sources. While the cost of construction is being mostly met from capital market and other borrowings, GHMC has spent substantial amounts from its General Fund, too, towards it, especially by way of property acquisition
