The Brihanmumbai Municipal Corporation (BMC) has decided to quickly float ‘Municipal Infrastructure Bonds’ to lift cash from the market to pay for big-ticket infrastructure initiatives after two ears. The Asia’s richest civic physique, BMC, is anticipating to lift INR 3,000-Rs 4,000 crores.
This development comes as the civic body is going through a money crunch amid falling revenues and elevated COVID spending.
However, according to a senior civic official this shall be a Securities and Change Board of India (SEBI)-regulated monetary product like different bonds. At the moment, BMC’s monetary and credit score credentials are good, so it can predict to get a rate of interest of 6-6.5 per cent if bonds are now floated. Besides, the bond interval shall be 10-15 years.
The small print of the infrastructure bonds shall be revealed within the upcoming civic price range. An advisor would be appointed to work out the monetary modalities and an elaborate credit standing course shall be carried out, the official added.
Moreover, the BMC at present has sufficient funds to spend on ongoing initiatives just like the Mumbai Coastal Highway and Goregaon-Mulund Hyperlink Highway, the senior official stated. The BMC is anticipating a money crunch after 2023.
Apart from this, the municipal corporation wants cash to finance main initiatives just like the sewage remedy crops and Mithi river rejuvenation whose prices vary from INR 300 crores to INR 1,000 crores.
According to reports, in 2019, the Ahmedabad Municipal Company had raised INR 200 crores by promoting ‘muni bonds’ for funding city infrastructure improvement. With a maturity of 5 years, the bonds provided a rate of interest of 8.7 per cent.
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