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The Telangana State Government has a major challenge ahead as it needs to arrange nearly ₹15,000 crore to fully take over the first phase of the Metro Rail project from Larsen & Toubro (L&T).
Hyderabad Metro Takeover
The takeover is expected to happen at a discount of over 20% for the government. Currently, the total value of the Metro network is estimated to be between ₹19,000 crore and ₹22,000 crore. The decision to take over the project was made after L&T expressed its unwillingness to handle the second phase of the Metro expansion. The Centre has also made it clear that for Phase-II to move forward as a joint venture between the State and Central Governments, the entire Metro network must be controlled by a single agency.
Arranging of Funds
However, arranging ₹15,000 crore is not easy. The government is close to reaching its borrowing limit for the current financial year. In addition, it still has to deposit ₹9,000 crore into the bank accounts of over 73 lakh farmers under the Rythu Bharosa scheme. Because of these financial commitments, it may be difficult for the government to raise the required funds before the March 31 deadline.
Slow Progress in Sourcing Funds
A senior official admitted that it is a tough task, but said some progress has been made in finding financial sources. So far this financial year, the government has borrowed around ₹70,000 crore from the open market. This is very close to the ₹71,400 crore borrowing limit set by the Ministry of Finance until February 11. This amount also includes ₹9,000 crore raised through bond auctions conducted by the Reserve Bank of India on February 10.
The government's financial pressure is clear. In December, it used special drawing facilities from the RBI for all 31 days and also took ways and means advances of ₹624 crore for 16 days. It even used an overdraft of ₹942.91 crore for two days to manage urgent expenses.
