The Memorandum of Understanding (MoU) between Amaravati Metro Rail Corporation (AMRC) and Delhi Metro Rail Corporation (DMRC) has reportedly been cancelled.
The Deccan Chronicle reported that the AMRC has allegedly refused to pay Rs 75 crore in capital expenditure, as the works for the project did not make any progress.
Despite the DMRC's proposal for a medium metro rail, the AMRC has proposed a light metro rail, reportedly in line with the Centreās suggestion.
The Vijayawada Metro Rail project took shape in June 2014 as a Special Purpose Vehicle (SPV) was formed.
Earlier this month, coming forward on the invitation of the AMRC, eight international consultants submitted an expression of interest (EOI) to prepare a detailed project report (DPR) for the Vijayawada Metro Rail, while German Development Bank Kfw had come forward to fund the project, TOI reported.
AMRC Managing Director NP Ramakrishna Reddy earlier said that the Union government did not approve any mass rapid transit system.
This is not the first setback that the project has faced, as in May, 2017, the Union finance ministry refused to approve the Vijayawada Metro Rail, stating that the Centre did not find it financially viable.
This also comes two months after India's 'Metro Man' E Sreedharan, who was working as an advisor to the Andhra Pradesh government on metro rail projects, had submitted his resignation to Chief Minister N Chandrababu Naidu.
Confirming the same to The News Minute, 85-year-old Sreedharan had earlier said, "I tendered the resignation because of my old age, which has made it difficult for me to travel to Andhra Pradesh frequently. Besides that, the work pressure was also more."
Sreedharan, who was Principal Advisor, Delhi Metro Rail Corporation (DMRC), was in 2015 called in to oversee the Visakhapatnam and Vijayawada metro rail projects.
Reports suggested that Sreedharan resigned due to differences with the state government choosing the light metro rail. However, he denied it.
EAS Sarma told TNM, "While the government can fund the project to a certain extent, they will also look at potential agencies to fund it. The viability and estimated traffic of the commuters will influence banks to invest as well."