Dec 27, 2016

AMRC to borrow Rs.1,859 crore to pool govt. share

No clarity on repayment of the loan

The Amaravati Metro Rail Corporation (AMRC) will avail a loan of Rs.1,859 crore to pool the State government’s share in the Vijayawada Metro rail project.

The State government equity is Rs.1,163 crore in two corridors of Metro rail estimated to cost Rs.7,212 crore. The government will have to bear additional burden towards land cost, R&R cost, and the State government taxes taking the total equity to Rs.2,159 crore. Of this, the government had already released Rs. 300 crore.
Sovereign guarantee

The AMRC will borrow loan to the tune of Rs.1,860 crore towards the government equity. The government will give sovereign guarantee to the loan borrowed by the AMRC.

The G.O. 339 accorded permission to the AMRC to avail bank loan from either Hudco or any other banking institution which offers said loan at lesser rate of interest.

The State government’s investment towards equity contribution of 20 per cent is Rs.1,163 crore. The land acquisition and R&R is Rs.550 crore. The establishment and other charges of AMRC are Rs.100 crore. Consultancy charges of the DMRC (with 15 per cent service tax) are Rs.346 crore. The total cost to borne by the government is Rs.2,159 crore.

The AMRC estimates that the land acquisition (LA) cost will be Rs.300 crore during 2016-17 and Rs.200 crore in 2017-18. Likewise, the LA expenditure will be Rs. 40 crore in 2018-19 and Rs. 10 crore during 2019-20. The equity contribution will be Rs. 400 crore each during 2017-18 and 2018-19. And, it will be Rs. 350 crore during 2019-20 and Rs. 13 crore during Rs. 2020-21.

The GO, however, lacks clarity on repayment of the loan. It merely says, “The Managing Director AMRC., Vijayawada, has also requested for according State sovereign guarantee for repayment of the loan amount.... Government also here by convey sovereign guarantee for repayment of loan of Rs. 1859 crore.”

It is not clear whether the AMRC has proposed that it would repay the loan or the government will have to repay the loan borrowed by it. The AMRC is a Special Purpose Vehicle (SPV) incorporated in 2015 for implementation of the Vijayawada Metro Rail project.
Source - The Hindu