KR market offered as collateral to HUDCO

Palike has availed of a loan of Rs 500 crore from the housing corporation

The Bruhat Bangalore Mahanagara Palike has offerred the KR Market as collateral to the Rs 500-crore loan it has borrowed from Housing and Urban Development Corporation (HUDCO).

The disclosure was made at the Council meeting on Tuesday after Opposition leader M Udayashankar sought to know whether the prime property had been mortgaged as security.

Commissioner M K Shankaralinge Gowda clarified that the property had not been mortgaged, but offered as a collateral to the Corporation.

He also disclosed the Palike’s plans to offer several other properties as collaterals.

The members were displeased at the revelation since the decision had been taken without taking them into confidence.

“How long will you keep on mortgaging the BBMP properties and what would be the fate of the Palike if the poor financial situation continues” questioned Udayashankar.

JD (S) floor leader Padmanabha Reddy was also critical of the move. He said he had raised the issue time and again and the earlier commissioner had promised the Council that it was a mere formality to avail of the loan from the financial institutions.

Gowda defended the move saying that offering property as a collateral need not be considered as matter of disgrace and that it was a common practice.

The Public Utility Building and Jayanagar Market were offered as collaterals in the past to secure loans, he said.

Corporators protest

An unruly scene was witnessed during the meeting when the JD (S) corporators staged a protest by beating drums in the House.

The protest, a direct violation of the Karnataka Municipal Corporations Act, was staged to draw the attention of the ruling BJP as well as the commissioner to the non-implementation of any of the projects mentioned in the 2011-12 budget.

The protesters accused the Palike’s legal cell of not challenging court orders in connection with the seizure of chairs and tables for defaulting payments.