WB suspends loans to MUTP

Mumbai, Mar 3 (UNI) The World Bank has temporarily suspended financial support to the roads and resettlement components of the US 940 million dollars Mumbai Urban Transport Project (MUTP), dealing a blow to the facelift programme of the country's commercial capital.

A World Bank release said today that it had suspended assistance until concerns over the equitable treatment of people affected by the works were resolved.

The MUTP is supported by an IBRD (International Bank for Reconstruction and Development) loan of USD 463 million for the road and rail components of the project and an IDA (International Development Association) credit of USD 79 million for resettlement.

The release said disbursements to the IDA credit and the road component of the loan (USD 150 million) have been suspended pending a resolution of these issues. IDA is the concessional lending arm of the World Bank Group.

MUTP is an ambitious road and rail renewal plan which involves the involuntary resettlement of more than 17,000 households and 2,500 shops and small industrial units. About 14,000 households have already been moved to secure dwellings.

Some serious problems arose after the resettlement of some of the households as it was not carried out in compliance with the agreement between the Bank and the Maharashtra government, the statement said.

''Suspension is a serious move, reflecting how serious we are about a successful outcome for these issues,'' a Bank official said.

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