Metro Train at Miyapur station in Hyderabad
Despite an initial assurance and the signing of an MoU, the IRFC subsequently backed out of the proposal to extend the ₹13,600 crore loan. The IRFC had reportedly offered financing at around 4% interest and in Japanese Yen, making it a far more attractive option. Because of higher interest rates, official sources said the govt was initially reluctant to opt for commercial borrowing.
Municipal administration department officials said the state government is now close to finalising a funding arrangement with a consortium of commercial banks to finance the takeover. Sources said discussions have advanced, and an agreement could be concluded around the Dasara festival. “L&T also took loans from the consortium of commercial banks earlier,” a senior Hyderabad Metro Rail official said.
Following this, chief minister A Revanth Reddy directed officials to explore alternative funding avenues, leading the govt to approach several commercial banks.
The delay comes after earlier efforts to secure funding through the Indian Railway Finance Corporation (IRFC) failed to materialise.