Erode Corporation to borrow ₹15 crore loan for the new bus stand project at Solar

New bus stand at Solar nears completion with a loan of ₹15 crore approved from TUFIDCO for repayment terms.

With the construction of a new bus stand at Solar at a cost of ₹63.50 crore nearing completion, the Corporation has agreed to the terms and conditions for obtaining a loan of ₹15 crore from the Tamil Nadu Urban Finance and Infrastructure Development Corporation Ltd (TUFIDCO).

Foundation stone for the new bus terminal at Solar along the Karur Bypass Road was laid on August 18, 2022, and 86% of works have been completed, so far. Other works are expected to be completed by the end of August, 2024 after which the terminal would be operational.

The Corporation has sought loan from TUFIDCO and had sent a letter on February 14, 2024. After various processes, the loan was approved and the civic body was asked to give an undertaking for obtaining the loan. A resolution to accept the conditions were passed during the council meeting held on Friday.

As per the terms and conditions prescribed by TUFIDCO, the Corporation Commissioner is authorised to borrow the loan amount of ₹15 crore. It was also resolved that the Corporation’s account on the revenue collection such as property tax, professional tax and other fees should be escrowed in the designated bank account for monthly or quarterly repayment of loan.

The exclusive escrowed account will be in existence till the time of clearing the loan and other dues under the project to TUFIDCO. The Commissioner should also make necessary provisions in the annual budget for the repayment of principal, interest and other dues for the loan availed for the project.

Also, it was agreed that funds receivable by the Corporation like devolution grant payment under the State Finance Commission (SFC) recommendation and other grants, can be used for repayment of loan in case of default in repayment of principal and interest due to TUFIDCO.

The Corporation should also submit an undertaking stating that for any reason, if the project increase in property tax, professional tax or other tax could not be implemented, the shortfall arising during any period should not affect the repayment of dues In such cases, the government should be permitted to deduct the dues out of the SFC funds on a first priority basis. Officials said the acceptance of conditions were communicated to TUFIDCO through an email.