Rs 16,000 crore WB loan likely for UP

Lucknow,May 8(UNI) Uttar Pradesh government is expected to receive a loan package amounting to Rs 16,000 crore from World Bank (WB) to pay back its high-cost debt.

The centre is said to have approved the package and a WB team will be visiting Lucknow next week to negotiate on the proposal.

''A World Bank mission is arriving here on a three-day visit from May 14. The loan proposal is likely to be placed before the board of the World Bank in Washington by the end of September and the loan is set to be finalised within this fiscal'',an official source confirmed here.

The WB loan package on the name of UP Development Policy Loan (UPDPL) will enable the state to pay off its high-cost debt from National Small Saving Fund (NSSF), which was amounted to Rs 16,000 crore by the end of March, 2008. This will consequently reduce the annual interest burden of the state government by Rs 700 crore.

The state government is currently paying an interest at the rate of 10 per cent for the loan from the NSSF, while the WB loan is likely to cost around six per cent.

The annual interest burden on UP government is over Rs 12,000 crore and the total loan burden on the state government till March 31, 2008, stood at over Rs 1,25,000 crore.

The UPDPL will be also be utilised for the implementation of the reform programmes that the state government is planning to initiate in several sectors, including governance, administrative reforms, fiscal governance, investment climate and power sector. The WB team during their three days stay in the state capital will examine reform measures initiated the government. The state government is likely to showcase the measures taken by it for promoting investment via the public-private partnership(PPP) route.

Sources said so far UP has identified PPP projects worth Rs 1,25,000 crore which include the 1,047-km long Ganga Expressway (Rs 30,000 crore), network of six other expressways (Rs 47,000 crore), power projects (Rs 25,000 crore), urban development projects worth Rs 12,000 crore and Taj International Airport of Rs 4,000 crore.

UNI MB AK KP1308