Mayo Hall released from mortgage by repaying HUDCO

From ET Realty

BENGALURU: The BBMP on Saturday got back the Mayo Hall from HUDCO, with whom the 125-year-old iconic structure had been mortgaged. The state government helped the fund-starved Palike by repaying Rs 435 crore to the financial institution.

The Mayo Hall and nine other pieces of property, including the KR Market complex and Kempegowda Museum, were mortgaged by BBMP to raise funds at low interest rates during 2011-2013 when the BJP was in power in the council.

BBMP still has to repay Rs. 1,854 crore to HUDCO, Canara Bank, Corporation Bank and Syndicate Bank to get back the other buildings. Only the Vijaya Bank account was closed after repaying loans taken from it. BBMP has to repay Rs.1,200 crore to HUDCO in 15 years and it is paying about Rs. 25 lakh as interest every day .

A source in the corporation said the Palike had to take loans for several infrastructure works in the 110-odd villages that were brought under BBMP when the city corporation was expanded in 2007-08. “There was a need to create infrastructure to bring these areas on par with the core areas of the city and political reasons too motivated councillors to benefit contractors. We were already getting loans at 13% interest. HUDCO offered us loans at lower interest rates and swapping loans was cheaper so the safest option was to mortgage these few property,”he said. The khata certificate of these buildings were given to the financial institutions.

Then, the state government had put down its foot saying it would not be a guarantor for the Palike and it would have to repay the loans. But the cash-strapped civic body failed to do so. On Saturday , Mayor B Manjunatha Reddy said, “We will repay all the loans and get back the other properties during our tenure.”

HUDCO returned the khata certificate of Mayo Hall to the chief minister and mayor. “We had all other documents of these buildings but mortgaging them hurt the sentiments of Bengalureans for which BBMP was vehemently criticized,” said the official.

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