Now, Palike to mortgage Johnson, Russel markets

After mortgaging the KR Market and Public Utility Building, the debt-ridden BBMP has decided to mortgage its two other important buildings - Johnson Market and Russel Market - in order to get a loan of Rs 200 crore from Canara Bank.

The decision was taken to generate resources for paying interest to the Housing and Urban Development Corporation (Hudco), from which the Palike has borrowed money. The BBMP had contemplated to mortgage the historic Sir Puttanna Chetty Town Hall, but the plan was dropped as Chief Minister Siddaramaiah objected to it.

“At any cost, Town Hall will not be mortgaged. The government can consider mortgaging any other Palike property,” said Siddaramaiah at a public function on Thursday.

Hudco loan

A year ago, the BBMP had borrowed Rs 200 crore from Hudco to clear dues to contractors through the ‘hundi’ system.

BBMP officials said the decision to shift the loan from Hudco to Canara Bank was taken in view of the 14.2 per cent interest rate in Hudco, which is 3.36 per cent higher than Canara Bank. Following the decision, the BBMP has started gathering records pertaining to the two important buildings.

The Russel Market is nearing a century of its construction.