Korea EXIM bank backs off from Vizag Metro rail project

Government said that Amaravati Metro Rail Corporation has now decided to approach other global financial institutions like AIIB

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Vizag Metro Rail

VIJAYAWADA (Metro Rail News): The Korea EXIM Bank earlier came forward and offered to assist in establishment of Vizag Metro Rail by funding the infrastructure when the state government was facing a setback in their grand plans, the Korea EXIM Bank that had come forward to offer financial assistance to establish Vizag Metro rail has now backed off due to unknown reasons.

Highly placed sources in the government said that Amaravati Metro Rail Corporation has now decided to approach other global financial institutions like Asian Infrastructure Investment Bank (AIIB) and New Development Bank, formerly BRICS bank, seeking funds for the project.

As per the timelines fixed, AMRC was to award the contract to the successful bidder by March this year and the work was expected to begin immediately afterwards.

Already, five firms have been shortlisted and RFP has been issued to them.

These five firms will be submitting their technical and financial bids soon. The shortlisted firms are Adani Group, Tatas, Shapoorji Pallonji Group, Essel Group and IL & FS.

However, due to the polls and KEXIM Bank backing off, the project timelines have been disturbed. “KEXIM (Export-Import Bank of Korea) conveyed their inability to extend financial assistance for the project. The state government was therefore advised to propose the project for funding to other bilateral/multilateral agencies if so desired”, said a top source in the Union finance ministry.

Korea EXIM Bank earlier came forward to fund the infrastructure cost of Rs 4,200 crore which is the state government component of 51 per cent of the innovative PPP mode.

KEXIM Bank had offered to lend the money at an interest rate between 6.5 per cent to 7 per cent for a repayment tenure of 20 years with 5 years moratorium. AMRC had also appointed a financial advisor or loan arranger for the purpose.

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