Mumbai: The Maharashtra government on Wednesday approved a state guarantee of Rs 3,000 crore for a loan from central finance firm HUDCO to acquire land for setting up an International Business and Finance Centre (IBFC) in Nagpur.
The ambitious project, part of the 'New Nagpur' initiative, will be developed by the Nagpur Metropolitan Region Development Authority (NMRDA) on approximately 692.06 hectares of land in villages Godhani (Khurd) and Ladgaon (Khurd) in Hingna tehsil.The state finance department issued a Government Resolution (GR) following a cabinet decision taken on September 3 on giving guarantee.
According to the GR, it has been decided to borrow a total of Rs 6,500 crore from the Housing and Urban Development Corporation (HUDCO), a central government financial institution, for developing the IBFC. The state guarantee for Rs 3,000 crore has been approved for the first phase focusing on land acquisition.
The guarantee will remain valid for 12 months from the date of the GR's issuance, the document stated.The government has laid down stringent conditions for the guarantee, making it clear that NMRDA will be the principal debtor and the state will not bear liability for delayed payments or penalty charges."In case of default, the mortgaged movable and immovable property of the authority must be sold to recover the loan before invoking the government guarantee," the resolution clarified.
The authority will be required to submit monthly progress reports on loan repayment and financial status reports every six months to both urban development and finance departments.A guarantee fee of Rs 0.50 per Rs 100 per year of the outstanding loan amount will be charged, payable every six months by April 1 and October 1. Late payments will attract 16 per cent interest for the first three months and 24 per cent thereafter, according to the GR.
The government has also mandated that a committee including representatives from urban development and finance departments must approve any sale of mortgaged assets with final approval required from the state administration.The IBFC project is expected to position Nagpur, the second capital of Maharashtra located in the Vidarbha region, as a major business and financial hub in central India.
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