BHUBANESWAR: The Bhubaneswar Municipal Corporation (BMC) has decided to set up separate bank accounts for better tracking of the funding for two of its major projects.
The decision was taken at a high level meeting of the Housing and Urban Development (H&UD) Department recently.
The two projects are the modern slaughter house and Solid Waste Management (MSW). Funds for the projects will be provided by Odisha Urban Infrastructure Development Fund (OUIDF).
The main objective of setting up a dedicated bank account is to prevent project cost overrun. In big projects, it has been found that the contractor employed by BMC demands more than quoted price to start the work.
In addition, if BMC misses the August 2 deadline, it has to pay commitment charges to German Development Cooperation (KfW), one of the partners of Government in implementing the project.
An independent financial tracking system will not only streamline the process, it will also make the overall flow of funds from OUIDF to the contractor via BMC much faster.
For the modern slaughter house project, BMC will have to deposit an initial amount of `64 lakh in a separate bank account after which OUIDF will release the funds for the project.
Similarly, to get funds from OUIDF, BMC will first have to deposit `1.53 crore in the bank account.
BMC Commissioner reportedly has agreed to deposit the initial funding for the two projects. But the decision has to be ratified by the Mayor of BMC.
The loan agreement for both the projects will be processed after the Corporation’s Council meeting on Wednesday.