Ahmedabad, New Delhi get AA- - ranking in first credit rating of municipalities

Ahmedabad Municipal Corporation and New Delhi Municipal Council (NDMC) have got AA- - rating (positive credit worthy), in a new initiative of credit rating of urban local bodies, which would allow them to tap the market for funds.

Altogether 85 cities are being credit rated, of which the process in respect of 12 cities has been completed. All these 85 cities would be given credit rating by March next year, urban development minister M Venkaiah Naidu said on Wednesday.

Ahmedabad and Pune are already in advanced stages of going for municipal bonds.

Naidu has directed officials of his ministry to follow up with states and ULBs on a regular basis to ensure that all ULBs get credit rating at the earliest, which is necessary to float municipal bonds for mobilising resources.

As a part of handholding, the states and urban local bodies for speedy execution of projects under new initiatives, the ministry of urban development has identified substantial resources from various domestic and multi-lateral lending agencies, including Asian Infrastructure Investment Bank ($ 5 billion), Asian Development Bank ($1 billion), Japanese International Cooperation Agency ($500 million), BRICS Bank ($500 million per city) and AFD (Euro100-200 million).

HUDCO is likely to support Smart City Mission with Rs10,000 crore of funding.

The smart city project launched with 68 projects last year has added 14 cities in June this year and another 134 projects have been identified of which 114 projects are under bidding.

While the first batch of all 20 smart cities have set up Special Purpose Vehicles, the 13 cities identified under Fast Track Competition would do so by the end of this month.

Naidu expressed satisfaction over the ministry approving an investment of Rs1,24,000 crore for improving basic urban infrastructure. This includes Rs78,000 crore investment under Smart City Plans of 33 cities and another Rs45,935 crore under Atal Mission for Rejuvenation and Urban Transformation (AMRUT).

He said the reforms introduced like involvement of states and ULBs in conceptualisation of new urban missions, autonomy to states in formulation of projects, their appraisal and approval, competition based selection of cities etc have begun to yield positive results in the form of speedy clearance of investments.

The minister also directed concerned officials to take necessary measures jointly with states and ULBs to promote conversion of municipal solid waste into compost.

As against Plan allocation of Rs21,000 crore for 2016-17, the ministry of urban development has incurred an expenditure of Rs14,725 crore till August this year. Naidu said the progress in implementation of projects last year has resulted in the ministry spending 70 per cent of Plan Funds for 2016-17 during the last five months of the current financial year.