TG seeks lower interest rates on REC loans
Irrigation Minister N Uttam Kumar Reddy met REC Managing Director Jitendra Srivastava in New Delhi and explained the mounting financial burden on the state government due to high interest rates on the loan availed by the previous government for KLIP. The then BRS government had borrowed Rs 16,000 crore from REC at high interest for irrigation projects, the irrigation minister said, adding that the Congress government has been facing a big difficulty to repay the loans with high interest rates.
In some instances, the government could not repay loans due to paucity of funds and received notices from the REC, Reddy explained.
REC, a Central government agency, has recently 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 NPAs (non-performing assets) if the state government failed to clear the dues. In a letter to Irrigation Secretary Rahul Bojja, REC Executive Director Jithin Kumar stated: 'There is a total overdue of Rs 1,393.65 crore of which Rs 319.74 crore and Rs 292.75 crore are critical dues of TSWRIDC and KIPCL, respectively. If dues are not cleared on or before June 28, it will lead to slippage of both accounts into the NPA category'.
Furthermore, Jithin 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.
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.
Responding to the Irrigation Minister's plea, the REC CMD said that the Centre will consider the state government's request and provide a relief from the burden of the payment of loans with high interest rates.
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