The Hindu Business Line : Kolkata civic body's asset value goes up

THE asset value of the Calcutta Municipal Corporation has increased by 94 per cent to Rs 6,800 crore following a recent asset revaluation exercise. The civic body may now raise more funds or borrow from the financial institutions.

West Bengal Government sources said that Mr Subrata Mukherjee, the Mayor of Kolkata, is contemplating to borrow money from global financial institutions such as World Bank or Asian Development Bank for the different activities of the corporation.

According to the annual budget of the Calcutta Municipal Corporation, the asset value was fixed at Rs 400 crore in its schedule of properties. Any addition in the corporation's property was supposed to have been recorded in the asset register.

Maintenance of this register was stopped long back and no one in the corporation could say from when did it stop maintaining this register.

The revaluation of the Calcutta Corporation assets was done by Srei Capital Markets Ltd. The corporation mandated the firm with this job on January 30 this year and the initial report was submitted to on March 30.

According to the report, the total asset value of the Calcutta Municipal Corporation is about Rs 6,800 crore. It includes Rs 16 crore of movable assets and Rs 2,200 crore of immovable assets.

The water supply network of the corporation has been valued at Rs 1,180 crore and sewerage system at Rs 421 crore. Value of the total road network of Kolkata was Rs 1,750 crore and lighting system was valued at Rs 32 crore. Apart from these there were others lands and properties and it has been valued at Rs 1,150 crore.

The revaluation of asset will give the corporation more access to funds. In the Calcutta Municipal Corporation Act there was a provision where it stated that it can raise funds to the extent of 15 per cent of the total asset value.

So, going by the Rs 400 crore asset value it could have raised only Rs 60 crore. As a result last year the corporation could raise only Rs 50 crore when it issued bonds in the market.

More than 500 people from multiple disciplines were employed, including three well-known chartered firms, by Srei Capital Markets for this revaluation job. The company followed all the accounting norms laid down by the Indian Accounting Systems. To value the old buildings and structures, the Replacement Cost Method was followed.

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