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Hans India

Kaleshwaram & Water Resources Infra Loans Default: REC slaps notice on TG govt

Hyderabad: In a significant development, the Rural Electrification Corporation Limited (REC), a Central government agency which extends finance to power projects, has issued a notice to the state government for not paying the installment amount of Rs 1,393 crore towards loans borrowed by the Kaleshwaram Irrigation Project Corporation Limited (KIPCL) and Telangana State Water Resources Infrastructure Development Corporation (TSWRIDC). The REC also warned that loans availed by both the corporations would be declared as NPAs (non-performing assets) if the state government failed to clear the dues before June notices served by the REC have come as a bolt from the blue at a time when the state government is going through a financial crunch. In a letter to Irrigation Secretary Rahul Bojja, REC Executive Director Jithin Kumar stated: 'As on date, there is a total overdue of Rs 1393.65 crore of which Rs 319.74 crore and Rs 292.75 crore are critical dues of TSWRIDC and KIPCL, respectively, for the last three months. If not cleared on or before June 28, it will lead to slippage of both accounts into the NPA category.' Furthermore, Jithin Kumar said both the borrower accounts were already classified as Stage-2 category under the Reserve Bank's NPA norms. This delay in serving the dues will have a negative impact on the financial record and rating of the utilities and the state, he remarked. It may be mentioned here that the state government borrowed Rs 27,500 crore from the REC for the construction of the Kaleshwaram Lift Irrigation Project in 2018. At the time of availing the loan, the state government has agreed to repay the loan amount in monthly installments. Officials said that the REC already expressed serious concerns over the poor condition of the project after three barrages – Medigadda, Annaram and Sundilla – suffered damages. The delay in repayment will create more problems, they added. Officials said that the issue would be sorted out by seeking the help of the state Finance wing which is supposed to release the funds for the payment of the dues. 'The recent release of massive Rs 9,000 crore under the Rythu Bharosa scheme dented the state's financial position and the government will need more time to mobilize funds to pay such dues,' sources told Hans India.