Daijiworld Media Network – Mangaluru
Mangaluru, Sep 29: A loan obtained from the Asian Development Bank (ADB) nearly two decades ago for improving water supply and underground drainage infrastructure in Mangaluru has now ballooned to a staggering Rs 1,375.17 crore, including principal and interest.
According to information obtained under the Right to Information Act, the principal loan amount initially released to the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC), the implementing agency for the project, was Rs 380.34 crore. However, due to accumulating interest and a 2.5% penal interest, the amount had increased to Rs 1,375.17 crore by April 2026. Although the loan period ended in 2026, the Mangaluru City Corporation (MCC) has reportedly not paid even a single instalment so far.
KUIDFC has already issued more than 24 demand notices asking the MCC to repay the loan, but the corporation is said to have ignored them.
Former convener of the NGO task force related to the ADB loan, Harsha D'Souza, has questioned where the money collected from the public through sewerage cess and other taxes went if the corporation has not paid even a single instalment. He also questioned whether the funds were diverted for other purposes.
Responding to the issue, MCC officials said there was no adequate proof that the works under the Karnataka Urban Development and Coastal Environment Management Project (KUDCEMP) had been completed. Therefore, a letter has been sent to KUIDFC seeking a complete waiver of the loan, and the corporation is awaiting the government's directions, an official said.
Former mayor Shashidhar Hegde said the state government generally acts as the guarantor for such loans. Since the amount involved is substantial, no one in the MCC had taken steps to repay the loan in the past, he said.
Another former mayor, Premananda Shetty, said budgetary allocations had been made for repayment of the ADB loan for a few years, but the amount was not actually repaid. It was also stated that grants from the State Finance Commission would be reduced and used for loan repayment.
Given the huge amount involved, the government would ultimately have to take steps to repay the loan, he said.