By Paul Hemsley
New South Wales local governments have been invited to apply for funding under a state government plan to subsidise interest payments for commercial loans intended to reduce a backlog of infrastructure projects that councils have difficulty raising capital for on their own.
The state government is hoping to take the financial pressure off councils through rollout of the Local Infrastructure Renewal Scheme (LIRS) which pays the first four per cent of bank interest for approved projects that are prioritised as backlogged.
For the second round of the LIRS scheme, the interest rate subsidy has been reduced to three per cent.
The subsidy to clear the infrastructure bottleneck a big deal for councils because it allows them more financial freedom to borrow to fund the maintenance of roads, community halls, libraries, paths, sports fields and water facilities.
There have been 84 projects approved in the first round for 64 councils at a total cost of $439 million, including road renewals, bridge replacements and swimming pool rejuvenation and airport reconstruction works.
The circular to councils from the NSW Division of Local Government said the state government has committed $30 million for the second round in the 2012-13 Budget.
The document asks councils to identify appropriate projects under the round two guidelines and apply online between 1 November 2012 and 31 December 2012.
According to the guideline document, any council in NSW can apply for the funding but projects with a value of at least $1 million will be given preference.
In June, Local Government Association of NSW, Keith Rhoades applauded the extra subsidy for councils but said more funds were required for the program to make “significant inroads” to cut the infrastructure backlog.
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