Finance Department Raises Objection to HUDCO Loan

The loan file prepared for the Telangana Cabinet meeting regarding funds taken by the Road Development Corporation from HUDCO for HAM road works has reportedly hit a hurdle over the interest rate. The state had decided to borrow Rs. 9,161 crore from HUDCO to provide mobilisation advances to contractors undertaking road projects under the Hybrid Annuity Mode in the Roads and Buildings Department. Recent reports confirm that HUDCO has sanctioned the loan for the HAM road projects.

According to the proposal, HUDCO fixed an interest rate of 8.6% for the portion repayable over five years and 9.12% for the loan repayable over 15 years. While Cabinet approval is required for the loan agreement between HUDCO and the Road Development Corporation, the Finance Department has reportedly raised objections to the different interest rates and sought an 8.6% rate for the entire loan. As a result, the file is not expected to be placed before the Cabinet meeting.