Hyderabad: The Telangana govt’s plan to take over Hyderabad Metro Rail is facing fresh uncertainty, with the crucial Rs 13,000 crore loan from the Indian Railway Finance Corporation (IRFC) yet to materialise and the financial evaluation process still not taking off.As delays mount, the state is reportedly exploring alternative funding options even as its interest burden on the project continues to rise.Officials in the municipal administration department remain hopeful that the IRFC loan will eventually come through but are simultaneously working on a contingency plan. The delay has significant financial implications, with the state expected to bear an interest burden of about Rs 2.5 crore a day on the debt linked to the takeover.Sources said the Centre and IRFC are reluctant to extend the loan to Hyderabad Metro Rail Limited (HMRL) or a special purpose vehicle (SPV) and have instead advised the Telangana govt to borrow directly. However, the state is said to be wary of that option because of the borrowing limits imposed under the Fiscal Responsibility and Budget Management (FRBM) Act.According to officials, Telangana has already neared its FRBM borrowing ceiling and is seeking relaxations from the Centre, making direct borrowing an unattractive proposition.Sources also indicated that chief minister A Revanth Reddy is unhappy with the continued delay despite discussions with Union ministers Ashwini Vaishnaw and Manohar Lal Khattar a few weeks ago, in the presence of Union coal minister G Kishan Reddy.“The state govt has written to the IRFC and the ministry of housing and urban affairs (MoHUA) to share the terms of reference (TOR) for the financial evaluation by SBI Caps. The Centre has neither issued the SBI Caps appointment orders nor shared the TOR,” a senior state official said.The delay has also pushed back the timeline for the govt’s acquisition of HMR from L&T. Recently, L&T informed the National Stock Exchange that it had extended the expected timeline for the sale of its entire stake in L&T HMR to Sept. The transaction was originally expected to be completed by April 29.“According to the share purchase agreement between L&T and HMRL, after April, the interest burden of the Rs 13,000 crore loan would be on the state govt. The state must pay Rs 2.5 crore interest daily on the debt which was taken at 7% interest. From May 1, for two months, the state govt must pay Rs 150 crore interest to banks and this will further go up if the loan disbursement from the IRFC is delayed,” a senior HMRL official said.Officials pointed out that alternative funding options are also not straightforward. Even if the state opts to raise funds from institutions such as the Power Finance Corporation or multilateral agencies like the Asian Development Bank, approvals from the department of economic affairs and the MoHUA would still be required.One option being examined is to secure Rs 13,000 crore for the phase-I takeover through one funding route while exploring separate financing arrangements for the proposed phase-II expansion. However, with key approvals and funding commitments still pending, the timeline for the metro takeover remains uncertain, sources said.
