Facing fund crunch, MBMC eyes fixed deposits to pay dues

Staring at an acute financial crunch, the Mira Bhayandar Municipal Corporation (MBMC) has now planned to dip into its reserves by eyeing its fixed deposits (FD) in various banks.

The move is apparently a bail-out measure to clear pending overdues amounting crores of rupees of private contractual agencies engaged in several completed and ongoing developmental projects in the twin-city.

On the virtue of the consent by the erstwhile general body, the civic administration had initially planned to avail overdraft (OD) facilities on the asset valued at Rs. 122 crore for the same objective.

Even though the civic administration has taken steps to encash the FD’s, officials have clarified that only term deposits which have been kept as contingency assets to meet emergency needs will be used.

While municipal commissioner- Dilip Dhole was unavailable for his comments on the subject, another senior official who is in-know of the ongoing developments related to the FD's requested anonymity and said, “To avoid unnecessary spending, the surplus funds of every department are converted into flexible fixed deposits so that they can be used when there is need.

"Since, availing overdrafts attracts interest on our own deposits, it’s advisable to encash the fixed deposits and pump the funds into developmental projects. Once revenue is generated from property taxes and other sources, the withdrawn amount and other surpluses will be re-invested in FD’s.” 

Notably, the lone solid waste management facility and treatment plant in Dhaavgi village area of Uttan near Bhayandar had come to a grinding halt due to non-payment of dues to the concerned contractor, last month.The matter was sorted out by issuing notices followed by a part-payment to the contractor.