| GRANT
FUND - I
The Grant Fund was constituted as a component of the restructured
Tamil Nadu Urban Development Fund with financial assistance
from World Bank in 1996. The Government entered into a Management
Agreement on 28th February 1997 with Tamil Nadu Urban Infrastructure
Financial Services Limited (TNUIFSL) to manage the funds as
per the guidelines prescribed by the Government from time
to time.
The Government of Tamil Nadu (GoTN) has proposed to implement
the Third Tamil Nadu Urban Development Project (TNUDP-III)
to the tune of US $ 434 million over a period of five years
with the World Bank assistance of US $ 300 million. The project
was launched on 19th October 2005. The project consists of
two main components, the Institutional Development and the
Urban Investment Component. Under the Urban Investment Component,
capital grants to urban local bodies will be US $ 94.50 million,
of which World Bank assistance will be US $ 46.50 million.
During the appraisal mission discussions between the World
Bank and the Government on the TNUDP-III, it was decided that
this component will fund a part of the cost of such sub projects
whose beneficiaries constitute people living below poverty
line in the form of capital grants and / or viability gap
funding and that it will be managed by TNUIFSL.
Accordingly, the GoTN in its order G.O. Ms. No.77 dated 03.06.2005
accorded sanction for the capital grant component to the Urban
Local Bodies an amount approximately Rs.209 crores (equivalent
to US $ 46.50 million) under the TNUDP-III into Grant Fund-I
(GF- I). The interest from investments and any other income
earned or accruing to GF - I shall form part of its corpus
and shall be applied for the purposes for which the fund is
created. The balance available in existing Grant Fund shall
be merged with GF-I. A set of guidelines and procedures for
sanction of grant, out of the GF-I are also prescribed by
Government.
The Chief Executive Officer of TNUIFSL shall sanction the
Grant to Urban Local Bodies from GF- I based on the guidelines
and procedures prescribed by the Government. The GF –
I would be part of the Tamil Nadu Urban Development Project
III.
OBJECTIVES:
The Grant fund –I will be used to assist urban local
bodies toward,
- Financing projects which directly benefit urban low income
populations such as water supply, sanitation, storm water
drain, street lighting, sewerage systems, etc., financed
under TNUDP III.
- To provide project Viability Gap funding of sub-projects
financed under TNUDP-III
- Meeting the cost of resettlement and Rehabilitation related
to sub-projects to be financed by the Tamil Nadu Urban Development
Project.
FUND SIZE, SOURCE & ALLOCATION
- IBRD loan will finance approximately Rs.209 crores (equivalent
US$46.5 million) on a reimbursement basis. In addition to
this, the GoTN will contribute an amount equivalent to US
$ 48 million.
- The existing balances available in the Grant Fund established
under the precursor project TNUDP II shall be merged with
the GF I under the TNUDP III.
OPERATIONS & PROCEDURES
The Grant Fund I will be operated by Tamil Nadu Urban Infrastructure
Financial Services Limited based on the Grant Fund I guidelines
and Grant Fund Management contract between Government of Tamil
Nadu and Tamil Nadu Urban Infrastructure Financial Services
Limited and as per the procedures prescribed by GoTN, from
time to time.
ELIGIBILTY CRITERIA
The quantum of capital grant shall not exceed 30% of the
cost of the sub-project being financed under the TNUDP-III
subject to a maximum of Rs.10 crores per project (or) the
grant towards viability gap funding shall not exceed Rs.10
crores per project. This will also be used to assist the ULBs
to put in place the institutional mechanism for tariff administration
in the first three years.
The sanction of capital grant is subject to the following:
- For bus stand, commercial projects and other revenue earning
schemes financial assistance under the Grand Fund will be
subject to the following conditions:
- The financial resource of the Local Bodies and financial
assistance given by Government should be in the ratio
of 3:1.
- 80% of property tax should have been collected in the
past three years prior to the project investment year.
- The local body should have repaid all loan dues for
two years prior to the project investment year.
- For basic services such as water supply, sewerage removal,
roads, streetlights, solid waste management grant assistance
will be available if more than 20% of project beneficiaries
are people living below the poverty line.
APPRAISAL
The ULBs prepare a grant proposal that meet the objects
stipulated in the grant guidelines. The grant proposal should
contain the details of the projects and such other details
as prescribed in the guidelines and procedures. Tamil Nadu
Urban Infrastructure Financial Services Limited will, on receipt
of the proposal from urban local bodies, satisfy itself that
the purpose of grant meet the objectives of the Grant Fund
I Guidelines and the following:
- The project uses the most appropriate process and cost
effective technology and technical specifications;
- The project is adequately funded;
- The total quantum of capital grant shall not exceed 30%
of the cost of the sub-project being financed under the
Tamil Nadu Urban Development Project subject to a maximum
of Rs.10 crores per project or the grant towards viability
gap funding shall not exceed Rs.10 crores;
- The sponsor demonstrates the financial and institutional
capacity to operate and maintain the facilities constructed;
and
- The project meets the requirements stipulated in the Environment
and Social Framework.
For this appraisal by Tamil Nadu Urban Infrastructure Financial
Services Limited, Tamil Nadu Urban Infrastructure Financial
Services Limited can call for information from Urban Local
Bodies and Commissionerate of Municipal Administration conduct
site inspections, etc. Based on the appraisal, the Chief Executive
Officer of Tamil Nadu Urban Infrastructure Financial Services
Limited will approve the project and the Capital Grant.
PROCUREMENT
The sub-projects to be financed by the Grant Fund shall
follow IBRD procurement guidelines.
PERFORMANCE DURING 2005-06
A sum of Rs.34.48 crores was available in the existing grant
fund account as on 01.04.2005. During the Financial year 2005-06,
a sum of Rs.42.00 crores was released by GoTN under TNUDP-III
as Grant to GF-I. Further, a sum of Rs.0.61 crores has been
transferred by GoTN to GF-I being a portion of the return
on GoTN’s contribution in the Tamil Nadu Urban Development
Fund. A sum of Rs.1.11 crores being the excess of income over
expenditure for the financial year 2005-06 has been transferred
to Grant Fund.
During the financial year 2005-06, a sum of Rs.105.40 crores
was sanctioned as grant to various projects like, Solid Waste
Management, Under Ground Drainage Schemes, Roads and Water
Supply Schemes. Based on the progress of the work, a sum of
Rs.16.00 crores has been disbursed. The major disbursements
were made to Madurai Corporation, Tiruppur and Erode Municipalities
for Solid Waste Management Project; Salem and Tirunelveli
Corporations for Water Supply Project; and Ambattur, Kancheepuram
& Pallavaram Municipalities for Under Ground Sewerage
Scheme. The balance of grant fund as on 31.03.2006 is Rs.62.20
crores.
PERFORMANCE DURING 2006-07
A sum of Rs.62.20 crores was available in the existing grant
fund account as on 01.04.2006. During the Financial year 2006-07,
a sum of Rs.50.00 crores was released by GoTN under TNUDP-III
as Grant to GF-I. Further, a sum of Rs.1.47 crores has been
transferred by GoTN to GF-I being a portion of the return
on GoTN’s contribution in the Tamil Nadu Urban Development
Fund. A sum of Rs.5.16 crores being the excess of income over
expenditure for the financial year 2006-07 has been transferred
to Grant Fund.
During the financial year 2006-07, a sum of Rs.159.43 crores
was sanctioned as grant to various projects like, Solid Waste
Management, Under Ground Drainage Schemes, Roads and Water
Supply Schemes. Based on the progress of the work, a sum of
Rs.16.08 crores has been disbursed. The major disbursements
were made to Tirunelveli Corporation, Kurichi, Kuniamuthur
and Krishnagiri Municipalities for Water Supply Project; and
Cuddalore, Kancheepuram, Ramanathapuram, Virudhunagar, Namakkal
& Sivaganga Municipalities for Under Ground Sewerage Scheme.
The balance of grant fund as on 31.03.2007 is Rs.102.75 crores.
PERFORMANCE DURING 2007-08
A sum of Rs.98.88 crores was available in the Bank Accounts
of GF-I as on 01.04.2007. During the Financial year 2007-08,
a sum of Rs.50.00 crores was released by GoTN under TNUDP-III
as Grant to GF-I. A sum of Rs.7.40 crores
being the excess of income over expenditure for the financial
year 2007-08 has been transferred to Grant Fund. A sum of
Rs.52.90 crores has been disbursed based on the progress of
works. The balance of grant fund in the Bank Accounts as on
31.03.2008 is Rs.99.20 crores.
PERFORMANCE DURING 2008-09
A sum of Rs.99.20 crores was available in the Bank Accounts
of GF-I as on 01.04.2008. During the Financial year 2008-09,
a sum of Rs.50.00 crores was released by GoTN under TNUDP-III
as Grant to GF-I. A sum of Rs.9.67 crores being the excess
of income over expenditure for the financial year 2008-09
has been transferred to Grant Fund. A sum of Rs.39.43 crores
has been disbursed based on the progress of works. The balance
of grant fund in the Bank Accounts as on 31.03.2009 is Rs.114.43
crores.
PERFORMANCE DURING 2009-10
During the Financial year 2009-10, a sum of Rs.70.00 crores
was released by GoTN under TNUDP-III as Grant to GF-I. A sum
of Rs.88.72 crores has been disbursed based on the progress
of works.
PERFORMANCE DURING 2010-11
A sum of Rs.150 crores has been released by Government to
GF I during the financial year 2010-11. A sum of Rs.153.50
crores has been disbursed to the ULBs based on the progress
of the project.
|
