Hyderabad: The Indian Railway Finance Corporation (IRFC) loan agreement for Phase I of the Hyderabad Metro Rail project has sparked a political row between Chief Minister A Revanth Reddy and Union Minister Kishan Reddy. The disagreement centers on the terms of the Rs 13,600 crore loan, with both sides presenting conflicting interpretations.
Kishan Reddy's stance
Addressing a press conference in Delhi on Tuesday, Union Minister Kishan Reddy refuted the CM's allegations that he had blocked the loan. He stated that the central government wants the state to repay the IRFC loan after covering operational and maintenance (O&M) costs from the metro's revenue, such as ticket sales and advertisements. However, CM Revanth Reddy reportedly prefers to repay the loan first and use the remaining funds for O&M. Kishan Reddy emphasized that metro systems across India prioritize O&M expenses over loan repayment, citing the example of Jaipur Metro.
State government's counterclaim
State government officials, however, argued that the Union minister misinterpreted the loan agreement. They pointed to Clause 3.5 of the agreement, which pertains to the escrow account. According to this clause, the priority of funds is: first, all taxes and statutory dues; second, all project-related expenses, including O&M costs; and third, other expenses certified by the government. The term 'first charge' for IRFC applies only in case of default, meaning the lender has the first claim on the escrow account funds if the state fails to repay the loan. Officials clarified that this does not imply that loan repayment must precede O&M costs.
Call for dialogue
Kishan Reddy urged both parties to resolve the issue through dialogue rather than public criticism. He noted that the Telangana government and the Ministry of Urban Affairs need to sit together to settle the conditions and the No Objection Certificate for loan disbursement. He also criticized CM Revanth Reddy for making false accusations and compared the delay to the previous BRS government's handling of the Metro project, which he claimed was delayed by three years due to alignment changes.
Background
The dispute has been ongoing for several days, with CM Revanth Reddy accusing Kishan Reddy of blocking the IRFC loan. On Tuesday, state government officials informed the Union Ministry of Urban Affairs secretary that the state is ready to clarify any doubts regarding the agreement. The row highlights the tension between the state and central governments over the funding and operation of the Hyderabad Metro.
