War of words over Hyderabad Metro financing intensifies between CM and Union Minister
The tussle between Chief Minister A Revanth Reddy and Union Minister G Kishan Reddy over the Rs 13,500‑crore IRFC loan for Hyderabad Metro escalated on Tuesday, with the CM penning an open letter accusing the Minister of blocking funds.
Hyderabad: The war of words between Union Minister G Kishan Reddy and Chief Minister A Revanth Reddy over the disbursement of the IRFC loan for Hyderabad Metro continued on Tuesday, with the Chief Minister writing an open letter to Kishan Reddy urging him facilitate a meeting with the Union Minister for Railways and to get all necessary approvals for Hyderabad Metro Phase-II.
The open letter comes in the backdrop of the allegations of the Chief Minister that Kishan Reddy had influenced the Centre to withhold the disbursement of the Rs.13,500-crore IRFC loan sanctioned for the Telangana government’s takeover of Hyderabad Metro from L&T Metro Rail Hyderabad. However, Kishan Reddy responded that the delay was due to technical reasons and had no political motive.
Stating that metro rail corporations across the country do not prioritize debt servicing over operations and maintenance (O&M), he said metro revenues should first be utilized to meet O&M expenses before loan repayments.
“However, Revanth Reddy wanted loan repayments to be prioritized using the revenue earned by the Metro. The Chief Minister, however, did not agree to this,” Kishan Reddy said at a press conference in New Delhi.
Interestingly, the Chief Minister chose not to respond to these observations on the proposed repayment structure. Instead, he reiterated that the decision to refinance Hyderabad Metro’s existing debt through IRFC was based on sound financial considerations.
Revanth Reddy maintained that refinancing through IRFC would provide a longer repayment tenure and lower interest rates backed by sovereign-level repayment safeguards and the RBI’s Direct Debit mechanism. The arrangement, he said, was intended not only to facilitate the takeover transaction but also to place Hyderabad Metro on a sustainable financial footing and ensure its long-term viability.
The Chief Minister recalled that, as per IRFC’s conditions, the Telangana government had already paid an upfront fee of Rs.84.32 crore for the release of the first tranche of financing. In addition, the State had deposited Rs.1,461.47 crore towards the equity component of the transaction in an escrow account.
“The drawdown date was June 15. Despite fulfilling all the conditions stipulated by IRFC, the disbursement did not take place,” Revanth Reddy said in his letter.
He further stated that the Telangana government had addressed concerns relating to the operational integration of Metro Phase-I and the proposed Phase-II project. The State had requested the Centre to sanction Phase-II as a 50:50 joint venture. However, if approval for the joint venture model was delayed, the Telangana government was prepared to execute Phase-II using its own resources and institutional financing arrangements, provided the Centre grants the required approvals without delay, he said.
“The Telangana government and the people of the State are not asking for charity or any special favour. We are only seeking the disbursement of a duly sanctioned IRFC loan,” Revanth Reddy stated.
The Chief Minister also urged Kishan Reddy to arrange a meeting with Union Railway Minister Ashwini Vaishnaw to resolve the pending issues concerning the Metro project.
