World Bank Resumes Aid For Karnataka Irrigation Project

The World Bank has agreed to resume its financial aid to Karnatakas rehabilitation and resettlement component of the upper Krishna irrigation project, which it had suspended for not fulfilling its benchmarks.

Announcing this in Bangalore yesterday, Karnataka deputy chief minister Siddaramaiah said this assurance was given by World Bank managing director Gautam Kaji at a meeting during his visit to the US early this month, as part of his five-nation tour to study the value added tax (VAT) system.

Siddaramaiah, who is also the states finance minister, said the World Bank suspended the aid for the second time due to some communication gap over meeting its yardsticks but had now agreed for resumption after being convinced of Karnatakas explanation.

 

The Karnataka deputy chief minister said the state would receive Rs 50 crore as the second instalment of aid and the World Bank had agreed for total reimbursement of the money expended by Karnataka so far.

The World Bank, he said, had also agreed to assist power projects, laying of roads, health scheme and urban water supply scheme in Karnataka and would send a study team in this regard before October.

Meanwhile, the World Bank said yesterday that it was lending $350 million to Andhra Pradesh for a highway project. The project will allow the government of Andhra Pradesh to reduce operating costs and travel times for local and commercial road users, a bank statement quoted Chris Hoban, World Banks India highway specialist, as saying.

The project will widen and upgrade important roads, support road maintenance and strengthen the states ability to manage its road programmes and assets, the statement said. The loan, provided on standard IBRD terms, has a maturity of 20 years, including a five-year grace period, and includes a commitment fee of 0.75 per cent.

The Andhra Pradesh government will contribute $135.5 million to the road project, whose total cost is estimated at $485.5 million.