Hyderabad, July 5 (IANS) Telangana Chief Minister A. Revanth Reddy on Sunday urged Union Housing and Urban Affairs Minister Manohar Lal to entrust SBI CAPS at the earliest with the assignment of valuing and financially examining Hyderabad Metro Rail Phase I for facilitating its takeover by the state government and examining the financial structure for Phase II.

In a letter to the Union Minister, the Chief Minister stated that the prolonged process for takeover of Phase I is creating operational uncertainty and day-to-day challenges for the project.

“At the same time, the delay is also affecting the sanction of the Phase II DPRs and the tying up of suitable funding arrangements. This is postponing project implementation and is likely to increase the cost of Phase-II due to avoidable time overrun and escalation,” he said in the letter.

The Chief Minister drew Manohar Lal’s attention to discussions held with him in the presence of Railways Minister Ashwini Vaishnaw and Minister for Coal and Mines G. Kishan Reddy in Delhi on June 24 regarding approval of Hyderabad Metro Rail Phase II and the takeover of Phase I by the state government.

The Chief Minister mentioned that during the meeting, it was agreed that SBI Capital Markets Limited (SBI CAPS) would be entrusted with the valuation and financial examination of Hyderabad Metro Rail Phase I for facilitating its takeover by the state government. SBI Caps would also examine possible options for refinancing of the existing high-cost debt of Phase I. Since Phase II will also involve raising substantial debt, it was agreed that the same agency may examine the financing structure for the phase, including suitable long-term debt options and funding arrangements.

CM Revanth Reddy wrote that the state government has already nominated the Special Chief Secretary, MA&UD Department, as the nodal officer for coordinating this exercise.

“It was further agreed that the assignment to SBI CAPS would be entrusted immediately, so that the integrated exercise relating to the Phase I takeover and Phase II expansion could commence without delay. Early appointment of the agency is essential, as the valuation of Phase I, the refinancing of its debt and the financial structuring of Phase II are closely interlinked and need to be examined together,” he said.

He noted that despite considerable time that has elapsed since the meeting, SBI CAPS has not yet been entrusted with the assignment, and the terms of reference have not been finalised and communicated to the state government.

Requesting the Union Minister to have the assignment entrusted to SBI CAPS at the earliest and have the terms of reference finalised and communicated to the state, CM Revanth Reddy stated that this will enable the decisions taken during the meeting to be implemented expeditiously to bring the Phase I takeover process to its logical conclusion, and allow the Phase II expansion to proceed without further delay.

The Chief Minister also wrote a letter to Kishan Reddy on the same issue and urged him to take up the matter with the Ministry of Housing and Urban Affairs and the Ministry of Railways.

–IANS

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