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Bangalore, May 13

THE Asian Development Bank (ADB) is likely to fund a development project in north Karnataka costing around $400 million.

The Karnataka Urban Infrastructure Development Finance Corporation (KUIDFC) Managing Director, Mr K.P. Krishnan, told newspersons on Friday that an ADB team will soon visit the State to discuss the issue with officials from the State Government.

Mr Krishnan, addressing a workshop on "Sharing best practises on urban sector projects in India," said the eight- year project would need the Centre's approval before implementation.

Mr Krishnan said about 25 towns will benefit from the project. The ADB has recently funded projects like the $145-million project in 10 towns in coastal Karnataka and a $107-million project in Mysore, Mandya, Maddur, Channapatna, Ramnagaram and Tumkur.

Mr Krishnan said the ADB is trying to streamline its project processing norms to reduce the lead time from conception to loan approvals.

ADB India's Head for Urban Development, Mr Alex Jorgensen, said urban local bodies should be able to fund their own infrastructure projects through commercial banks and through floating bonds.

These bodies should also be able to raise user charges within five years so that they can breakeven on operations and maintenance costs. Once this target is fulfilled, user charges should be levied to sustain the project.

He said some 230 urban local bodies in Karnataka have not been able to breakeven because they have a poor record of revenue collection.

(This article was published in the Business Line print edition dated May 14, 2005)
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