The Kaleshwaram mega project in Hyderabad, known as the world’s largest lift irrigation project, is at risk of being declared a non-performing asset (NPA). The state government has been struggling to pay the loan it took from the Power Finance Corporation (PFC), with Rs 1,400 crore in dues and missed installments.
Due to financial challenges in the last quarter of the previous financial year, the government has been unable to make payments. The new Congress government, which took office in December, inherited financial difficulties from the previous administration.
The previous government borrowed heavily from institutions like the Rural Electrification Corporation and PFC to fund the Kaleshwaram project. The PFC has warned of consequences if payments are not made, adding financial burden to the government.
The delay in loan repayment could lead to penalties and interest accruing, as per the agreement made with the corporation. The loan repayment period is set for 25 years, with the government relying on revenue generated from the Kaleshwaram project to cover costs.
