Bhubaneswar: The Credit Rating process for the first time was carried out in the 9 Atal Mission for Rejuvenation and Urban Transformation (AMRUT) cities of Odisha to assess the creditworthiness and how to improve the status by overcoming the deficiencies so that a potential investor have confidence in making long term investment.
Since Urban Local Bodies (ULBs) plays a critical role in the delivery of social, economic and infrastructure services including public health, sanitation, water supply, and maintenance of road networks such credit rating processes have become necessary to eliminate deficit in the delivery of various services. The rapid pace of urbanization over the last few decades has led to an increasing pressure on ULBs to ensure adequacy of the above services. Considering the current level of urban infrastructure and sharp increase in urban population, the need for strengthening and augmenting urban infrastructure becomes critical and requiring a large amount of investment.
The population of more than 1 lakh was in consideration for the rating and 9 cities of Odisha which include Bhubaneswar, Cuttack, Berhampur, Sambalpur, Rourkela, Puri, Balasore, Baripada and Bhadrak were included under the AMRUT Mission which requires large amount of investment in infrastructure development. In order to raise the fund by issuing Municipal Bonds from the open market the Credit Rating process was initiated in these cities.
The Credit Rating of Urban Local Body (ULB) is a comprehensive tool for assessment of creditworthiness and reliability of its debt obligations and also allows the rated city to show potential investors to make long term investment.
According to sources, in order to determine the credit worthiness of the ULBs of AMRUT Mission Cities of Odisha, 2 Credit Rating agencies were engaged in all the 8 AMRUT cities. In package 1 for the cities Rourkela, Berhampur, Sambalpur and Puri, ICRA Limited was engaged as the credit rating agency while in Package-2 for the cities of Cuttack, Balasore, Baripada and Bhadrak, Brickwork Ratings India Private Limited was appointed Credit Rating agency.
Sources also revealed that the final Credit Rating report has already been received for 7 cities by the Government. As per the report received by the Housing & Urban Development Department rating for Rourkela Municipal Corporation is IrBB. Similarly the ratings of Sambalpur Municipal Corporation, Berhampur Municipal Corporation, Puri Municipality, Balesore Municipality, Baripada Municipality and Bhadrak Municipality are IrBB-, IrBB, IrB+, BWR B+, BWR B+, BWR B respectively.
Now necessary steps will be taken in the Urban Local Bodies level to improve the creditworthiness so that in long runs funds can be raised by issuing Municipal Bonds, sources added.
The final Credit Rating for Cuttack is expected to be submitted by the mid of December 2016. For selection of Credit Rating Process for Bhubaneswar Municipal Corporation is in progress.
The Credit Rating of Bhubaneswar City was made under the JnNURM scheme in 2013, where the city rating was BBB as stated by Housing & Urban Development Department.