Housing & Urban Development Corporation Ltd is planning to enter the financing of corporate housing and area development.

Hudco finance director S Sundresan said the board will be meeting within the next fortnight to re-define `infrastructure development' so that Hudco can undertake these projects.

"We have been receiving project proposals from corporates for financing housing schemes for their employees, area development for factories and building offices. Similar proposals are also coming from other giant sectors," Sundresan said.

However, Hudco has decided to keep a clause for financing the housing projects.

"When the corporates will be building housing for the extremely weaker section and lower income group, then they will get loans for 9 per cent and 13 per cent respectively and the houses will be distributed through a public agency, like the state housing board. Otherwise the cost of loans will be 15 per cent," Sundresan said.

Hudco is also eager to take up financing of area development projects, in addition to its involvement in solid waste management, drinking water supply, sewerage and drainage systems.

Sundresan said area development projects will be more remunerative and "we wish to take up more of these schemes because indirectly it will help to build more houses for the lower strata of the society."

"We have already received a project proposal from the West Bengal government for the area development of the Sagar Islands. The project will be executed by the West Bengal Surface Transport Corporation Ltd."

"Another project, an industrial park in Bangalore, is also in the waiting. All these urban infrastructure development projects do not fall in our usual line of work. So we are trying to give a fresh look into the definition of this term," Sundresan said.

The new definition is likely to include transport, airport, seaport and industry related activities as infrastructure development activites.

Sundresan said collecting a toll is not a very effective instrument for financing a bridge or a raod. "The area around that road or bridge must be developed so that is frequented most."

He also noted that the government must allow the toll to be treated as security, otherwise in case of a default, the non- performing- assets (NPA) position of Hudco will suffer.

"Recently, we sanctioned a loan to the Transport Corporation of India for a bypass project in Pali, Rajasthan. There also, we have advised them total area developement," Sundresan said.

Hudco is aiming to mobilise Rs 1,845 crore in the current fiscal 1997-98. Loan santions will around Rs 2,200 crore, of which releases will be around Rs 2000 crore.

Hudco has launched a public deposit scheme to mop up around Rs 400 crore. It will follow up with an issue of tax-free bonds of Rs 100 crore and taxable bonds of Rs 400 crore. The Union government will also be providing Rs 46 crore as equity. For non-resident Indians, Hudco will be floating a Rs 100-crore rupee bond issue.

Sundresan said Hudco had sought permission for a Rs 420-crore issue of tax-free bonds. This was reduced to Rs 100 crore.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.