JKIDFC to raise Rs 2000 crore to fund languishing projects

Srinagar, Jan 14: Jammu and Kashmir Infrastructure Development Corporation Limited (JKIDFC) is going to raise Rs 2000 crore from the market to fund languishing projects in the Union Territory.

As per the official document, the corporation has invited tenders from the Reserve Bank of India regulated financial institutions to lend money to the corporation.

A tender copy uploaded by the corporation on its website reads as “… sealed Expression of Interest (EOI) from reputed RBI regulated banking and financial institutions/companies of the country, to submit written proposals for advancing loans of Rs. 2,000 crore to be availed during remaining months of the current financial year 2021-22 and a quarter of next financial year (2022-23).”

“The bidders have to quote the rate of interest (MCLR linked) at which they will offer the loan along with the amount they are prepared to invest during January-March 2022 and April-June 2022-23. Any change in the interest rate during subsequent years will be MCLR linked. Expression of Interest (EOI) must be delivered both in written hard copy and as well as digital form and should include the banking/ financial company’s demonstrated capacity to provide the credit facility.”

It states that Jammu and Kashmir Infrastructure Development Finance Corporation (JKIDFC) Ltd. is a Registered Corporation under the Companies Act, 2013. The Corporation is mandated to raise loans up to Rs 8,000 crore for funding Infrastructure Development in Jammu and Kashmir.

The loans to be raised by the Corporation are guaranteed by the following dedicated Revenue Streams: revision of taxes under the Jammu and Kashmir (Motor Spirit and Diesel Oil) (Taxation of Sales) Act by revising the rate of tax on the sale of diesel from 16% minus Rs. 2.5 per litre to 16% minus Rs. 0.5 per liter.

“Increase in one-time road tax at 9% for motor vehicles. iii. Increasing efficiency of collection of water connection charges by way of covering all the unregistered consumers and improving collection efficiency to 100%. Increasing revenue realization by making full use of permissible limit of 80 lakh cft of extraction of timber. The repayment of the principal and interest shall be made directly through the designated account from the revenues accrued from the above-dedicated streams. The duration of the loan would be of 15 years,” reads the notice.

After the identification of over 6000 languishing projects in July 2018, the government of Jammu and Kashmir came up with a creative idea of establishing the Jammu & Kashmir Infrastructure Development Finance Corporation (JKIDFC) to raise loans up to Rs 8,000 Cr to fund the completion of these projects.

For servicing of the loans raised from various financial institutions/nationalized banks, dedicated revenue streams of road tax, electricity duty, toll tax, timber extraction, and water connections have been streamlined for JKIDFC in particular. 2357 projects for an amount of Rs 7110.66 crore have been approved, out of which 1100 projects for an amount of Rs 1555.16 Cr have been completed.