Hyderabad: PFC drops bombshell

Hyderabad : The Kaleshwaram mega project, touted as the world’s largest lift irrigation project and the flagship programme of the previous BRS government, stands on the verge of being declared as a non-performing asset (NPA).

The state government has continuously been faltering on the payment of the EMI of the loan it had taken from the Power Finance Corporation (PFC). According to the corporation, the government owes Rs 1,400 crore now. It had missed three installments. Following this, the PFC has demanded the government to either clear the dues or else it would have to declare the Kaleshwaram lift irrigation project (KLIP) as NPA.

Top officials said the government could not pay the installments due to the financial challenges it was facing in the last quarter of 2023-24 financial year.

The Congress which came to power in the state in December has been struggling hard to meet the financial requirements as the previous government had spent all available financial resources before demitting the office in the last month of 2023. “We have no money to pay the interests as well as principal amount to the funding agencies for the last three months, official sources told Hans India.

The previous government took loans liberally from the central financial institutions like the Rural Electrification Corporation and PFC. The REC has already sought a report from the government on damage of three barrages -- Medigadda, Annaram and Sundilla -- recently and expressed concern over the repayment of the loans taken.

Top officials said Power Finance Corporation officials had met the top officials of Irrigation department and enquired about the delay in the payment of the monthly installments. The previous government borrowed nearly Rs 25,000 crore as institutional loan to construct the Kaleshwaram lift irrigation project. The non-payment of loans would attract action against the government.

The government took loans from the PFC by assuring the revenue generation from the Kaleshwaram project. The non-payment of loan amount would be against the agreement entered by the government with the corporation,” the officials said. Officials also said the delay in the payment of the loans would add to the financial burden on the government as interest would be added to the dues along with penalty as per the agreement. The repayment of loans has been spread over a period of 25 years.