Nagpur civic body may issue municipal bond for smart city projects

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The Nagpur Municipal Corporation (NMC) may go for issuing municipal bonds on stock exchange to raise funds for execution of slew of developmental projects proposed in the city. The project is likely to be area based development proposed at Pardi, Punapur and Bharatwada in East Nagpur under Smart City Mission.

The NMC has started the process to appoint transaction advisory, private agencies for value capturing fund and credit rating. “We are hopeful of issuing work orders to the agencies in next two weeks after the consent of civic chief and standing committee,” said a senior NMC official.

The official said it may not be necessary for the NMC to issue municipal bonds and depend upon the decision of the standing committee and general body. “Central government made it mandatory for the civic bodies to know its credit rating with the launch of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in 2009. The NMC had got its credit rating done in 2013. The NMC’s credit rating was ‘INR217m long term bond rating at IND AA (SO)’. But the NMC did not issue municipal bonds. Similarly, the centre had made it mandatory to get credit rating done under Smart City Mission so the process kicked-off,” he said.

Now, the NMC had proposed projects worth Rs 3,577.77 crore under Smart City Mission. The centre will give Rs 500 crore and Rs 250 crore to come from the state and Nagpur Improvement Trust (NIT). Remaining works are proposed to be undertaken through land pooling concept, PPP model and revenue to earned from regularisation of unauthorised plots and structures in the proposed area based development sector. Therefore, the NMC’s special purpose vehicle — Nagpur Smart and Sustainable City Development Corporation Limited — may go for municipal bonds to raise funds for Smart City works.