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Important two-day meetings between Telangana Chief Minister A. Revanth Reddy, Union Coal Minister G. Kishan Reddy, Railway Minister Ashwini Vaishnaw, and Urban Development Minister Manohar Lal Khattar appear to have moved the Hyderabad Metro project forward. These discussions may have helped create a new funding plan for both the state
government's takeover of Hyderabad Metro Phase-I and the expansion of Phase-II.
State Bank of India to Become the Lender for Hyderabad Metro Project
According to sources, the State Bank of India (SBI) is likely to become the main lender for the project. This is seen as a major advantage because the Centre's expected involvement in the project could help arrange funding at a very low interest rate of around 2%. This is much cheaper than the nearly 9% interest rate the Telangana government might have had to pay if it arranged the loan on its own. As a result, the state could save a large amount of money while moving ahead with this major infrastructure project.
Sources also stated this new funding arrangement has almost ruled out the possibility of the Indian Rail Finance Corporation (IRFC) financing the metro project. The Railway Ministry reportedly made it clear that IRFC is mainly meant to fund railway infrastructure and not metro projects of this kind.
Hyderabad Metro Developments
The recent developments have also helped reduce political tensions between Revanth Reddy and Kishan Reddy. Earlier, the Chief Minister had accused Kishan Reddy of not supporting the metro expansion and of blocking the project. However, Kishan Reddy is now said to have played an important role in arranging meetings with key Union ministers and helping discussions move in a positive direction.
Although the state government's takeover of Metro Phase I may still take some time because of official procedures, the latest talks have created a positive atmosphere for both the takeover and the Phase-II expansion.