Amaravati Bonds best deal for state, says Kutumba Rao

Amaravati: AP Planning Board Vice-Chairman Kutumba Rao said that as the Centre has refused to help in construction of Amaravati Capital city, the state government was forced to depend on the Amaravati Bonds.

Kutumba Rao addressed a press conference held at Secretariat here on Monday. Reacting to criticism of opposition parties and other groups on Amaravati Bonds, he said that the bonds were the best and government will get benefit from them.

He said that there was no truth in the argument of opposition. Some newspapers were publishing wrong information regarding Amaravati Bonds, he said but did not mention the names of the news papers.

The Central government gave only Rs 1,500 crore for construction of Amaravati so far, he added. The World Bank also was delaying in sanctioning loans for the capital city construction. Hence, the state government decided to mobilise money through market to speed up the ongoing infrastructure works at Capital city, he said. 

Based on the ratings that the organisation got, the interest on these Bonds will be levied according to the present market. The financial resources of organisation, interest paying capacity, actual loan repaying capacity and other parameters would decide the rating of a given organisation. The interest will vary based on the ratings like, AAA, AA, A and A+ and so on,’’ Rao stated.

AP Capital Region Development Authority has got A+ rating and it has to pay 10.48 percent interest, he said. But, the CRDA is paying only 10.32 per cent interest, which is a best deal in this regard, he informed. He explained that various state governments have been releasing such bonds for their financial needs. 

If the government will take money from banks, then along with the surety by state government they demand for mortgage of land or other property, but in this Bonds, there was no such condition on CRDA, he said.