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Roads & Building department desperate for loans to lay highways
Roads & Building department is desperately looking for ways to get loans from financial institutions for executing state highways and other road works in 13 districts.
Amaravati: Roads & Building department is desperately looking for ways to get loans from financial institutions for executing state highways and other road works in 13 districts.
Andhra Pradesh Road Development Corporation (APRDC) has been given permission to secure a loan of Rs 1,000 crore from a nationalised bank for development of state highways and other roads in the state.
The state government has already directed the R&B department to get Rs 3,000 crore loan from financial institutions on its own for the development of state highways and other road works. It also approved enhancement of borrowing limit of APRDC to Rs 3,000 crore.
The Punjab National Bank has agreed to sanction a loan of Rs 1,000 crore to the APRDC recently at 7.90 per cent interest rate. The state government issued orders to the PRDC to obtain the loan on Wednesday.
As the Fiscal Responsibility and Budget Management (FRBM) Act is not allowing the state government to go for more borrowings, it is encouraging various government corporations to secure loans from financial institutions on their own.
According to sources, the R&B department is facing tremendous pressure for funds as the budgetary allocations for 2017-18 were insufficient. The department has taken up 437 road works with a total length of 2,144 km and 78 bridges in 13 districts.
The estimated cost of these works is Rs 2,622.42 crore. None of these works has been completed yet even as some of those were started in 2016. “Shortage of funds and delay in payments to contractors are also one of the reasons for the snail pace of road works,” said a senior official.
The government made a meagre allocation of Rs 210 crore in 2017-18 budget for the state highway works. It was Rs 410 crore in 2016-17 financial year.
Though the government sanctioned around Rs 500 crore, the department was to clear bills worth Rs 536 cores by December 21, 2017 to the contractors.
“The state government released around Rs 500 crore to clear pending bills. We will also clear the remaining bills soon,” chief engineer of R&B department M Subba Rao told The Hans India.
Though the state government has determined to improve road connectivity to both the rural and urban areas and complete some important roads to improve connectivity to new capital city Amaravati, fund crunch has become a major constraint to carry out these developmental works.
