HYDERABAD: The Centre's gazette taking over irrigation projects on the Krishna and the Godavari rivers issued on Thursday creates 'loan trouble' for certain projects being built by the TE government.
The government is heavily dependent on loans for construction of irrigation projects. It has formed separate corporations to mobilise loans for projects and entered into agreements with consortiums of various banks. However, the Centre's gazette declared several Telangana state projects on the Krishna river, which are under various stages of construction, as 'unapproved'
Prominent among them are the Palamuru-Ranga Reddy, Kalwakurthy Dindi and Tumilla lift irrigation schemes and the Srisailam Left Bank Canal (SLBC).
Two days after issuance of the gazette, banks have conveyed to the state government that they would not be able to lend to unapproved projects, according to official sources in finance department.
Irrigation official sources say it is practically impossible to secure approvals for unapproved projects within six months as mandated in the gazette. The fate of these projects now hangs in the balance.
The Centre's Power Finance Corporation and Rural Electrification Corporation remain lenders to irrigation projects besides a host of commercial PSU banks. Sources say the lenders and PSU banks which function under the under the control of the Centre cannot flout the gazette on projects and extend loans to unapproved projects.
The state government accorded administrative approval for Palamuru-Ranga Reddy project in June 2015 with an outlay of Rs 35,200 crore. However, the cost went up as the project got delayed due to court cases.
The government has spent nearly Rs 7,000 crore for land acquisition for the project. The works on packages 1 to 18 of the project are in progress. There is also uncertainty over the fate of Alimineti Madhava Reddy, Bhakta Ramadasu and Nettempadu lift irrigation projects which were completed and are in operation currently as they have been included in the list of 'unapproved projects'.