GMADA, PUDA neck deep in debt

Nitin Jain

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Tribune News Service

Chandigarh, July 5

Once considered revenue-generating self-sustained bodies, the Greater Mohali Area Development Authority (GMADA) and the Punjab Urban Planning and Development Authority (PUDA) are now neck deep in debt.

Call it “ill-planning”or “unmindful expenditure”during the past decade-long Parkash Singh Badal-led SAD-BJP regime, both these development authorities are now cash-strapped and owe a whopping Rs 4,847.14-crore loans to different banks.

While GMADA alone is under a Rs 3,099.54-crore debt, PUDA owes Rs 1,747.6 crore to banks.

Official records in the possession of The Tribune reveal that what to talk of repayment of the outstanding huge loan amounts, the development authorities are even finding it difficult to pay the monthly bank instalments as both GMADA and PUDA are now bereft of any funds of their own.

Both the debt-ridden authorities had been paying an annual interest ranging between 8.4 per cent and 9.35 per cent on their outstanding bank loans and overdrafts.

While GMADA had cited “infrastructure development”as the main reason for availing of a majority of the loans and bank overdrafts, PUDA had taken loans amounting to Rs 2,000 crore for paying the Punjab Government against OUVGL (Optimum Utilisation of Vacant Government Lands) sites transferred to it and the rest of the loans were procured for “infrastructure development”.

Both GMADA and PUDA had even mortgaged several of their properties with the banks to avail of heavy amounts of loans and overdrafts.

With their own coffers empty, these development authorities had even procured further loans to repay the previous loans on the completion of their term periods.

In one such instance, GMADA procured a loan from the State Bank of India to repay a Rs 500-crore short term loan of Indian Bank. Similarly, PUDA had been taking new loans from other banks to repay previous loans.

So much so, the records show that these authorities had been even finding it difficult to pay hefty monthly instalments, running into several lakhs of rupees, following which they had been procuring further finances and bank overdrafts.

Officials privy to the “wrongdoings”revealed that GMADA lost huge revenue in the ill-planned Purab Premium Apartments project, which could not even be completed so far, and massive land acquisition (over 1,500 acres) for the IT City project in one go, besides “unmindful expenditure”in New Chandigarh.

Way forward

Taking cognisance of the rising debt burden on both development authorities, Punjab CM Capt Amarinder Singh, who  holds the Housing and Urban Development portfolio, has asked officers of the department to find a way forward out. “Auctioning properties, completing pending projects to cash the investments and curtailing future expenditure are some of the plans under consideration to consolidate their financial position,” a top government functionary told The Tribune.