Hyderabad Metro Rail's expansion from 69.2 km to nearly 122 km faces a big hurdle . Telangana's plans,which leaned on a Centre partnership for low-interest funds,now uncertain as Indian Railway Finance Corporation (IRFC) freezes a loan.
This snag also threatens state's move to take over HMR Phase I from Larsen & Toubro (L&T). A takeover deal last year involved a loan of about ₹13,527 crore and an equity payment near ₹1,462 crore. Tensions simmer between Chief Minister A. Revanth Reddy and Union Minister G. Kishan Reddy, but core problems remain murky.
Complications arose in late May when HMR officials got notice from IRFC stopping transaction progress. This shocker came after the government had already put equity payment into an escrow account for L&T. The sudden halt caught many off guard,especially since formal agreement had been celebrated days earlier,with an official even at public sector bank to push fund disbursement.
IRFC had earlier informed stock exchanges about the deal,sparking hopes for a good loan setup. Though exact rates weren't shared,expectations hinted at half the loan locked at around 4%,possibly with Japan International Cooperation Agency (JICA) backing. But issues are cropping up everywhere. Ministry of Housing and Urban Affairs (MoHUA) reportedly wants the loan shifted towards operations and maintenance,not debt repayment. Plus,a clash with Ministry of Railways over who should issue the No Objection Certificate (NOC) adds to the mess.
Unsettled agreements with various operations and maintenance vendors tied to L&T might have swayed IRFC's loan freeze. Without Centre's sovereign guarantee,state could find it hard to get low-cost funding from multilateral sources. Central nod is crucial for Metro or railway projects,showing the red tape that's still there.
For now,L&T likely continues running HMR Phase I until these government-level issues get sorted. The Hyderabad Metro expansion's future hangs uncertain as stakeholders try to untangle this knotty situation…
