Chandigarh: Flagging lack of progress for nearly four years, French development agency Agence Française de Développement (AFD) has written to the department of economic affairs (DEA), Union ministry of finance, seeking an early meeting to discuss cancellation of the proposed pan-city 24×7 water supply project in Chandigarh.In its communication, AFD said the move would trigger cancellation of the loan agreement and entail a cancellation fee of about Rs 4.58 crore, calculated as 2.5% of the cancelled amount. AFD India country director Lise Breuil has written to DEA joint secretary Sakshi Mittal, stating that the formal cancellation process would begin following the MC’s decision to close the project.The agency’s letter comes after the MC general house decided against pursuing the 24×7 water supply project. Referring to the civic body’s stand, AFD said it received information via e-mail that the matter was deliberated upon in the 355th and 356th general house meetings of the MC, which approved project closure under the AFD loan framework.Explaining the procedure, AFD told DEA that the cancellation would be triggered under relevant clauses of the Credit Facility Agreement (CFA), leading to termination of the loan agreement. This would also result in cancellation of the associated grant agreement linked to the loan’s implementation. AFD added that its partner, the European Union (EU), was aware of the situation.“As per clause 8.2 of the CFA on cancellation indemnity, cancellation fees would be 2.5% of the cancelled amount. This works out to be 2.5% of Euro 47,899,527, amounting to Euro 1,197,488,” the agency said in its communication.The MC’s decision to scrap the project was taken during a recent monthly general house meeting, where councillors from both the ruling BJP and the opposition opposed the 24×7 water supply agenda. The house also resolved that rusted and worn-out pipelines should be replaced or repaired using the civic body’s own resources, without burdening the city with long-term debt.The MC rejected the pan city 24X7 water supply project citing the 24X7 pilot project in Manimajra, which was not successful. Councillors said the pilot project did not serve the purpose. It had been planned at a cost of over Rs 70 crore.MSID:: 130979872 413 |
