The jinxed Phase-I of Godavari Drinking Water Project (Moulana Abul Kalam Hyderabad Sujala Sravanthi Scheme) has crossed a major hurdle with the state government agreeing to provide the required financial support for obtaining an additional loan of Rs 1,000 crore from the Housing and Urban Development Corporation (Hudco).
The project is conceived to supply 172 million gallons of water per day (MGD) to meet the drinking water scarcity in Hyderabad and surrounding municipalities. Nearly half of the work has been completed.
The GDWSS Phase-I was taken up at a cost of Rs 3,375 crore with source at the Pranahita with the funding share from central and state governments and GHMC. Due to non-materialisation of the funding pattern, the state government permitted the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) to avail a loan of Rs 1,000 crore from Hudco.
On December 27 last year, the government issued orders giving counter guarantee, subject to the condition that the budgetary support will not be provided throughout the currency loan and the guarantee will be given only for the principal part.
Hudco put a condition that the second loan of Rs 1,000 crore for GDWSS would be sanctioned only if the government provided a guarantee for repayment of the principal and interest.
HMWS&SB managing director J Syamala Rao, in a letter to the department of municipal administration and urban development (MAUD) three months ago, requested the government to arrange for repayment of the principal and interest for the entire loan repayment period for the second loan without which Hudco will not sanction the loan.
He said that Hudco wanted government guarantee as well budgetary support for repayment of the principal and interest for the entire loan repayment period. The water board was not in a position to meet the debt servicing of interest component due to severe financial crunch, he pleaded.
The government accepted the request and modified the previous order and issued new order last week for repayment of Hudco term loan of Rs 1,000 crore in the regular budget years. The loan to HMWS&SB will be met by the state government to meet the requirements of Hudco.
