Hyderabad: After chief minister A Revanth Reddy accused Union minister Kishan Reddy of blocking Indian Railway Finance Corporation (IRFC) loan for Phase I of Metro Rail project, the IRFC agreement clauses have resulted in claims and counter claims.While Kishan Reddy has claimed that the IRFC loan was stalled due to issues with the Centre over disbursement clauses and CM Revanth Reddy not agreeing to modify certain conditions, state govt sources said that it was the Union minister who was not aware of the conditions properly.Addressing a press meet in Delhi on Tuesday, Kishan Reddy denied the CM’s accusation and said: “The Centre wants the state govt to repay the IRFC loan of Rs 13,600 crore for taking over Phase I from L&T after meeting operational and maintenance (O&M) costs from its revenue like ticket and advertisement. But the CM wants to repay the loan amount first and use the balance amount for O&M. I even advised the CM to think about the sustainability of Phase I instead of repayment. The O&M costs have to be met first.”He said across the country, Metro systems do not immediately use revenue to clear loans first. Metro revenue must first meet the O&M expenses. Even Jaipur Metro is following Centre’s suggestion that they meet the O&M costs first and repayment next, Kishan Reddy said.Official sources said there is one clause in the agreement where the term used is ‘first charge’ IRFC, which means if Hyderabad Metro Rail Limited (HMRL) has to repay the loan to IRFC first. It does not mean repayment first and O&M later as mentioned by the Union minister, officials said.According to loan agreement clause 3.5 ‘Escrow account’, the borrower (the state govt) shall enter into and operate a single escrow account with an approved escrow bank.“The escrow agreement shall enable the routing of funds meant to be used during the operation of the project. The priority of the funds are, first all taxes and statutory dues payable by the borrower in respect of the rail system, all expenses relating to the project, O&M costs and expenses incurred by the Telangana govt in accordance with the provisions of the agreement and certified by the govt etc.,” a senior govt official said.If the state govt defaults on repayment of the loan, IRFC (lender) has the first charge on all funds in the escrow account and all other accounts to the extent of the dues payable. The lender shall have exclusive right on escrow account and other bank accounts without prior approval of the govt. The entire cash flows of the borrower including operating income, any subsidy, grant shall be pooled in the designated account, sources said.“This issue should be settled through dialogue, not public criticism. Both the Telangana govt and ministry of urban affairs have to sit and resolve it on conditions and No Objection Certificate for loan disbursement,” Kishan Reddy said at the press meet.He said earlier too, when BRS was in power, Metro Rail project got delayed by three years in over alignment changes. Now, Revanth Reddy is acting in a similar manner, he added.He said the CM met Union urban affairs minister Manohar Lal Khattar several times on this issue and was suggested changes in the IRFC agreement. But the state govt is not willing, said Kishan Reddy, adding he spoke to Khattar in the morning who clarified the issue.“CM Revanth Reddy has been making false accusations against me on Metro Rail project for the past few days. Making baseless accusations is unbecoming of someone holding the CM post. The BJP does not have the culture of blocking funds to states. PM Narendra Modi or Centre or me do not require any certificate from the CM on the commitment to development of Telangana. We are answerable to Telangana people, not to Revanth Reddy or Congress,” Kishan Reddy said.On Tuesday, state govt officials informed Union ministry of urban affairs secretary that the state was ready to clarify if there were any doubts.
