First in its history, self-sustaining CMDA runs out of cash, seeks aid from Tamil Nadu government

CHENNAI: For the first time, the Chennai Metropolitan Development Authority (CMDA) has formally approached the State government seeking financial assistance to tide over its mounting liabilities.

"A lot of construction work has been carried out with CMDA money. They went ahead with those projects without looking at the finances," a senior CMDA official told DT Next, admitting that the authority is facing an acute cash-flow crunch after undertaking construction projects beyond its core mandate. The authority has sought assistance from the State government in the form of aid and grants to overcome the financial strain.

According to sources, the authority has never faced such financial constraints before and has sought Rs 200 crore from the State government to meet its immediate operational requirements, including payment of salaries and pending dues.

Officials said the CMDA's only major revenue source is planning permission fees, which are "very meagre" and "almost at par with whatever salary" expenditure is incurred by the authority. Against this backdrop, the senior official described the authority's financial stress as involving both liquidity and solvency issues.

The development comes at a time when the CMDA is estimated to be saddled with liabilities of around Rs 3,500 crore, including a negative balance of about Rs 1,500 crore. According to officials and earlier reports, nearly Rs 3,000 crore has been spent on construction works in recent years, including projects such as libraries, Mudhalvarin Padaipagams, bus termini and other civic infrastructure.

The senior official maintained that the CMDA had historically remained financially self-sustaining and had not previously required financial assistance from the State government until the present crisis.

With the authority reviewing its financial position, several proposed projects are now being dropped. "We are still working on the financial liabilities and finalising projects that are to be cancelled," the official said, adding that the final liability position is still being worked out.

Completed projects, including Mudhalvarin Padaipagams, marriage halls, badminton courts and swimming pools, will be handed over to the Greater Chennai Corporation, the Sports Development Authority of Tamil Nadu and the respective departments for operation and maintenance, officials said.

IN TIGHT SPOT

• Rs 3,500 cr: Estimated liabilities of CMDA

• Rs 3,000 cr: Expenditure on construction works in recent years

• Rs 200 cr: Financial aid CMDA has sought from the state government

• Constructions include libraries, Mudhalvarin Padaipagams, bus termini and other civic infrastructure