Finance Minister Nirmala Sitharaman advised the state government to award the project to another agency, or even bilateral or multilateral agencies if required.

Vizag Metro Rail in limbo again Korean bank backs out of extending loanImage: RK Beach (Wikimedia Commons/Ravikiran Rao)
news Controversy Thursday, July 11, 2019 - 09:14

In a major blow to the Andhra Pradesh government's plans of building a Metro Rail in Visakhapatnam, the Export-Import Bank of Korea (KEXIM) has conveyed their inability to extend Rs 8,300 crore in financial assistance for the project.

This came to light during an unstarred question in Parliament on Wednesday. Talking about the issue, Finance Minister Nirmala Sitharaman said that the state government was advised to award the project to another agency, even recommending bilateral or multilateral agencies if required.

According to reports, authorities may now approach other financial institutions like the Asian Infrastructure Investment Bank (AIIB) among others.

Just earlier this week, the TDP and the YSRCP had found fault with the Centre for refusing to extend help for the project, which found no mention in the Union Budget that was announced earlier this week.

It was in March this year that the KEXIM had come forward to extend a loan for the Visakhapatnam Metro Rail project as a team from the bank called on former Andhra Pradesh Chief Secretary A C Punetha in Amaravati and discussed the loan proposal and related issues.

The state government had earlier sent a proposal in this regard to the Central government, which in turn forwarded it to the Korea Exim Bank. Following this, the Bank deputed a team to Amaravati to hold talks with the state government.

It was in November last year that the state cabinet decided to go ahead with the Metro Rail in Visakhapatnam, a long-pending proposal, under the public-private partnership (PPP) mode, after the Centreā€™s refusal to come forward for the project.

According to its initial proposal, the three-corridor Vizag Metro was planned to be built over a stretch of 42.55 km at a cost of Rs 8,300 crore.

However, with the YSRCP government now taking charge and multiple delays plauging the project, it could witness a rehaul and the submission of a fresh Detailed Project Report (DPR).