Hyderabad Metro Phase-I, the takeover of which is expected to be discussed at the Telangana Cabinet meeting on October 1. (DC Image)

Hyderabad: The Cabinet will meet on October 1 amid expectations of key decisions on the mobilisation of funds for the takeover of Hyderabad Metro Rail Phase-I from L&T, as well as on the distribution of Indiramma saris to one crore women ahead of the Bathukamma festival from October 11 to 18, official sources said on Tuesday.

The Cabinet is likely to discuss the modalities and timeline for the sari distribution.

Last year, the government had distributed the Indiramma saris from November 19, birth anniversary of former prime minister Indira Gandhi.

The distribution may be advanced in view of the festival being celebrated next month.

The Cabinet is also expected to discuss the future course of action on the long-delayed takeover of Hyderabad Metro Rail Phase-I from L&T, which is considered crucial for facilitating the expansion of Metro Rail under Phase-II.

The takeover of L&T Metro Rail Hyderabad Ltd. has run into further delay as the state government is yet to finalise the debt funding required for the transaction.

The takeover was initially expected to be completed by September-end, but the government is now likely to seek a further three-month extension.

In April, the Telangana government, through Hyderabad Metro Rail Ltd., signed a share purchase agreement with L&T Metro Rail to take over the Hyderabad Metro project.

Under the agreement, the state government agency has to pay around ₹14,600 crore to L&T Metro Rail towards acquisition of its equity in the project.

It has also agreed to take over the existing debt of around ₹13,600 crore by refinancing it through a fresh loan agreement with financial institutions.

SBI Capital Markets, which is advising the state government on mobilising funds for the takeover, is yet to finalise the financing arrangement. Indian Railway Finance Corporation Ltd (IRFC), which had initially agreed to fund the transaction, has raised objections to certain aspects of the proposed funding structure, resulting in further delay

Under the original share purchase agreement, the takeover was to be completed by June. However, owing to the delay in finalising the debt agreement with financial institutions, the deadline was extended to September 30.

With the revised deadline approaching, the state government is expected to seek another three-month extension from L&T, potentially extending the deadline to December 31.

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