Friday, 26 March 2010

CWG OC seeks $500 million loan waiver

The organising committee of the Commonwealth Games has asked the government to write off its Rs 2,307-crore debt, saying its earnings from sponsorships and television rights may not be enough to pay back the amount. This is a significant turnaround from Organizing committee's earlier stance that the games will be revenue neutral.

The Union government extended loans to the committee for developing competition and training venues for the Games to be held in New Delhi in October this year. The amount includes the Rs 687 crore the Cabinet sanctioned last week.

The organising committee has requested that at least some part of the loans should be turned into a grant as the funds are being used for preparatory activities, a finance ministry official said.

“We understand that the committee has already started earning some revenue. So we feel that it should start paying off the loans now as it could be difficult to pay the entire amount after the Games are over,” he said, requesting anonymity. The government may look into the case of fresh loans later on, he added.

Sports and youth affairs minister MS Gill has thrown his weight behind the committee on the issue. He has written to finance minister Pranab Mukherjee asking for at least a partial waiver.

The finance ministry is not in favour of the proposal and is keen that the committee starts paying off the loan. The ministry has tightened the government spending in an effort to bring down fiscal deficit to 5.5% of the gross domestic product. Finance ministry officials said the latest tranche of Rs 687 crore might be waived off, depending on the actual revenue earned by the organising committee that is expected to earn Rs 1,780 crore from the Games. It has already got commitment of about Rs 700 crore from sponsorships and television rights.


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