HYDERABAD: With delays threatening to escalate costs and stall expansion plans, Chief Minister A Revanth Reddy has urged the Union government to immediately initiate the financial evaluation of Hyderabad Metro Rail’s Phase-1 takeover and Phase-2 expansion.
In separate letters to two Union ministers, the chief minister warned that prolonged inaction is creating operational uncertainty and delaying funding arrangements for the next phase of the project.
On Sunday, Revanth wrote to Union Housing and Urban Affairs Minister Manohar Lal Khattar and Union Coal Minister G Kishan Reddy, seeking the immediate appointment of State Bank of India Capital Markets Limited (SBI CAPS) to undertake the valuation of Metro Phase-1 for its proposed takeover by the Telangana government and to examine the financial structure of Phase-2.
The letters follow discussions held in New Delhi on June 23 and 24 with Union ministers Ashwini Vaishnaw, Khattar and Kishan Reddy on issues affecting Hyderabad Metro.
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According to the chief minister, it was agreed during those meetings that SBI CAPS would undertake the valuation and financial examination of Phase-1 to facilitate its takeover by the state government.
The agency was also expected to explore options for refinancing the existing high-cost debt of Phase-1. Since Phase-2 will require substantial borrowing, Revanth said it was further agreed that SBI CAPS would examine its financing structure, including long-term debt options and funding arrangements.
“The prolonged process for takeover of Phase-1 is creating operational uncertainty and day-to-day challenges for the project. At the same time, the delay is affecting the sanction of the Phase-2 DPRs and the tying up of suitable funding arrangements. This is postponing project implementation and is likely to increase the cost of Phase-2 due to avoidable time overruns and cost escalation,” the chief minister said in his letter.
He requested the Centre to finalise the Terms of Reference in a manner that comprehensively covers Phase-1 valuation, debt refinancing and funding requirements for Phase-2. The Telangana government, he said, has already nominated the Special Chief Secretary, Municipal Administration department, as the nodal officer for coordinating the exercise.
The chief minister pointed out that despite the understanding reached during the meetings, SBI CAPS has not yet been formally entrusted with the assignment and the Terms of Reference have not been finalised or communicated to the state government.
He stressed that early appointment of the agency is critical as the valuation of Phase-1, refinancing of its debt and financial structuring of Phase-2 are interlinked and need to be examined simultaneously.
In a separate letter to Kishan, Revanth requested him to personally intervene with the Ministries of Housing and Urban Affairs and Railways to expedite the process.
