Conceived on the lines of the regulatory bodies for power, port and telecom sectors, the commission would handle a variety of tasks related to urban infrastructure projects covering water supply, sanitation, roads, bridges, solid waste management, area development and commercial and social infrastructure.

It will have the responsibility of identifying the right people for the projects, deciding on appropriate tariffs to be levied, and ensuring the maintenance of quality in the upcoming projects. The question of whether the authority is to be constituted at the local, state or at the national level is yet to be decided, said Hudco chairman and managing director V Suresh.

Announcing Hudco's foray into the international capital market, Suresh said that the company has decided to raise $10 million in the formof bonds to be subscribed by the US investors for a period of 30 years. The bonds will be guaranteed by the US government through USAID (United States Agency for International Development) under the Housing Guarantee Programme. The final agreement for the bond issue will be signed next week, he said.

This is a follow-up of the 1995-MoU signed for the development of debt market in India for municipal finance between Indian and the US governments. Under the deal, a sum of $125 million has to be raised over a period of five years for lending to municipal corporations and municipal bodies for infrastructure projects.

Highlighting the over subscription of its recent bond issue, Suresh said that Hudco has allotted bonds of Rs 235.38 crore as on September 8, 1999. The bonds with seven year maturity (Rs 178.38 crore) carry an interest of 12.25 per cent while those of 10 years maturity (Rs 57 crore) have an interest rate of 12.5 per cent.

On other resource mobilisation initiatives, Suresh said Hudco will shortlyreceive about $90 million from the Asian Development Bank (ADB) under the Urban Environment Infrastructure Fund.

Further, it also hopes to get about $100 million from ADB under the second phase of India Rural Housing Project (IRHP-II). Earlier, under the first phase, it received a sum of $100 million for rural projects last year.

To make the personal housing loans more affordable to the middle-income segment, Hudco on Wednesday, announced a reduction in the interest rates on retail housing finance.

Dwelling on its infrastructure initiatives, Suresh said that Hudco had sanctioned a loan of Rs 84.25 crore to the Chennai Metropolitan Development Authority (CMDA) on Thursday for the development of Chennai Mofussil bus terminal at Koyambedu. The total cost of the project is estimated to be Rs 103.49 crore. Hudco, so far, has sanctioned a sum of Rs 176.74 crore loan during the current financial year for different projects in Tamil Nadu, he added.