Minister rules out allegations on Amaravati bonds interest rate

Minister for Municipal Administration P Narayana said Amaravati bonds 2018 received good response and there was no truth in the allegations that the bonds were floated with high interest rate.

Replying to short notice question in AP Assembly, the Minister said the Amaravati bonds over subscribed within one hour and fetched Rs 2000 cr. He said that the bonds were issued for Rs 1300 cr and decided to retain Rs 700 cr additional subscription by exercising the green shoe option with an interest rate of 10.32 per cent. He said that arranged fee of .85 per cent was paid to the concerned agency for floating the bonds while several other states paid one to two per cent.

The Minister said that Amaravati capital would be developed at a stretch of 2017 km at an estimated cost of RS 48,000 cr. The state govt prepared DPR for capital development and sent to central govt, which released Rs 1500 cr so far. He said concerned utilisation certificates were submitted to the Centre and director of NITI Aayog officials inspected the ongoing works in Amaravati and accepted that UCs were issued for Rs 1632 cr. The NITI Aayog also recommended for release of Rs 662 cr and the amount was not released so far.

The Minister said that tenders were called for capital development works to a tune of Rs 26,000 cr and the works are going on. He said several banks came forward to extend financial assistance of Rs 10,000 cr and the state govt has to deposit 20 per cent of the shares.

Referring to rate of interest of Amaravati bonds, the minister said that it depends on the rating of the bonds. He said Amaravati bonds got a rating of A+ and the interest rate was fixed at 10.32 per cent as per the rating. He said the state govt paid .85 per cent as arranged fee to the concerned agency AK capital services.

Quoting that the Amaravati bonds floated for lowest interest rate, the Minister said that TIDCO of Orissa mobilised Rs 50 cr at 10.4 per cent, Gujarat state petroleum mobilised 1000 cr at 10.45 per cent, Gujarat state petroleum Rs 500 cr at 10.3 per cent interest by paying 2 per cent arranged fee, Rajasthan Vidyut Yojana nigam limited 323 cr at 10.25 per cent interest and Tamil Nadu Generation corporation RS 633 cr at 10.5 interest rate and UP infra mobilised 5400 cr at 10.15 interest rate.

The minister also said that the central govt is also encouraging the state to float bonds for development of infrastructure and providing Rs 13 cr as subsidy for every RS 100 cr.

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