1 day ago
CPIM Opposes HAM Funding Plan for Kakinada Development
The Kakinada city administration is considering getting Rs 93 crore for development.
The money would come through a system called the Hybrid Annuity Model, or HAM.
Under this system, contractors can borrow money from banks for part of a project.
The Kakinada Municipal Corporation would guarantee those loans and pay interest.
It would also set aside some tax money to pay the contractor.
The Communist Party of India (Marxist) says this could create too much debt for the corporation.
The party points to problems such as unpaid waste-collection vehicles and a shortage of funds.
It wants the state government to give the corporation development money directly instead.
Kakinada CPIM has opposed using Hybrid Annuity Model funds for city development.
Kakinada MLA Vanamadi Venkateswara Rao announced a plan to secure Rs 93 crore.
CPIM leader P Veerababu said the municipal corporation already faces funding shortages.
He warned HAM financing could increase KMC’s debt and require interest payments.
CPIM urged the state government to directly allocate development funds to the corporation.
- Who
- The Communist Party of India (Marxist), Kakinada MLA Vanamadi Venkateswara Rao, and the Kakinada Municipal Corporation are involved.
- What
- CPIM is opposing a proposed Rs 93 crore Kakinada development package financed through the Hybrid Annuity Model.
- Where
- Kakinada city, Andhra Pradesh.
- When
- The article does not specify when the plan or opposition was announced.
- Why
- CPIM says HAM could increase the corporation’s debt, require interest payments, and place an indirect burden on residents.
CPIM’s Objections
Proposed Development Plan
Use of HAM financing
CPIM’s Objections
CPIM opposes bringing the Rs 93 crore through HAM, saying the arrangement could increase Kakinada Municipal Corporation’s debt and ultimately burden residents.
Proposed Development Plan
Kakinada MLA Vanamadi Venkateswara Rao has announced a plan to bring Rs 93 crore for Kakinada’s development through HAM financing.
Source of development funds
CPIM’s Objections
CPIM wants the state government to directly allocate funds to the corporation instead of using HAM financing.
Proposed Development Plan
The announced plan relies on the Hybrid Annuity Model, under which contractors can borrow for part of the project cost and the corporation supports repayment obligations.
Municipal finances
CPIM’s Objections
CPIM says the corporation is already short of funds, has grounded CLAP waste-collection vehicles, and lost 16th Finance Commission funds because municipal elections were not held for four years.
Proposed Development Plan
The development plan was announced despite the financial conditions described by CPIM; the article does not provide a separate response from its proponents.
Key facts
- Proposed funding
- Rs 93 crore
- Funding model
- Hybrid Annuity Model (HAM)
- Opposing organization
- Communist Party of India (Marxist), Kakinada city unit
- Civic body
- Kakinada Municipal Corporation
- Reported service problem
- CLAP waste-collection vehicles have been grounded because of delayed payments and repair needs.
- HAM loan arrangement
- Contractors can obtain bank loans for 60% of the estimated project cost, with Kakinada Municipal Corporation acting as guarantor.
- CPIM request
- The state government should directly allocate development funds to the corporation.
Quotes
P Veerababu
CPIM city convener in Kakinada
“KMC is grappling with a shortage of funds and the CLAP vehicles, responsible for the daily collection of wet and dry waste, have been grounded due to the civic body’s inability to make timely payments and a need for repairs.”
deccanchronicle.com
Sources
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