Sunday, November 21, 2010

WB proposal for JICA loan rejected for high debt burden

Concerned over the "alarming state of West Bengal's debt burden", the Centre has rejected the state's proposal to seek funds for a nearly Rs 2,500 crore thermal power project from the Japan international Cooperation Agency (JICA), a senior state power ministry official said.

"The project has now been kept in abeyance as the Centre feels the state's debt burden has reached an alarming position and denied to take up the loan proposal with JICA," said the official.

"The 6th unit of Bakreshwar Thermal Power Project estimated at Rs 3,300 crore was scheduled to be built with a soft loan from the JICA", he said.

All other units of Bakreshwar Thermal Power Station were funded by the Japanese government through erstwhile Japanese Bank for International Cooperation now JICA.

The project was supposed to be implemented by the West Bengal Power Development Corporation (WBPDCL) -- the state's only power generating company. WBPDCL managing director Krishna Gupta when contacted said, "I am out of station for last two months, so I cannot comment."

The state's outstanding debt burden is nearing Rs 2 lakh crore mark and the denial suggests that the state government may not be in a position to access JICA funds any more for state projects unless it improves its revenue or restructures its interest payment schedule.

"When a state project is taken up, the state government forwards the loan proposal on behalf of the company to the central government , which in turn takes it up with the Japanese government and JICA funds the project. Proposals for all projects requesting loan from the Japanese government are bunched together and forwarded by the Centre once a year.

The loan proposal for the 6th unit of Bakreshwar was submitted by the West Bengal Government about two years ago