The State Government has accorded permission to the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) to obtain an additional loan of `1,000 crore from Housing and Urban Development Corporation HUDCO with government guarantee (for principal part only) as security for early completion of Godavari Drinking Water Supply Project to meet the drinking water scarcity in Hyderabad and surrounding municipalities,
The government has issued orders giving counter guarantee subject to the condition that the budgetary support will not be provided through out the currency loan and the guarantee will be given only for principal part only.
The GDWSP Phase-I (Moulana Abdul Kalam Hyderabad Sujala Sravanthi Scheme - MAKHSSS) is taken at a cost of `3,375 crore with source at Pranahita with the funding share from State Government, Greater Hyderabad Municipal Corporation and Central Government.
Due to non-materialisation of the funding pattern, State Government permitted HMWS&SB to avail loan assistance (non-recourse loan) of `1,000 crore from Housing and Urban Development Corporation (HUDCO) without government guarantee for the project.
Accordingly, Water Board has concluded the loan agreement with HUDCO and the funds are being drawn from HUDCO as per progress of works and also Government is releasing its share amount to the HMWS&SB for early completion of the project.
For the ongoing works, government has released an amount of `1,287 crore through budget and HUDCO provided `750 crore out of `1000 crore loan for the project and against which an expenditure of `1,978.05 crore was incurred including Land Acquisition and the works are in brisk progress and that of connected two ring mains are also grounded and are in progress.
HMWS&SB further submitted that it was necessary to avail the additional loan of `1,000 crore from HUDCO to have full financial closure for the project apart from government budgetary support for completion of all the components in the project.
The Board has informed that the HUDCO has in principle accorded sanction of the additional loan of `1000 crore for completion of the project and one of the conditions stipulated for the second loan is to obtain counter guarantee from the government with budgetary support for repayment of principal and interest to this second loan, as already all the assets of HMWS&SB have been mortgaged with HUDCO towards the first loan of `1,000 crore.