The Center requested a report from the government of Andhra Pradesh on obtaining loans worth 960 crore from foreign agencies for various foreign aid projects (EAPs) that remain unused.

Departments that are supposed to get these funds to run projects have blanked out, while contractors have yet to be paid hundreds of crores for work done so far. The EAPs now remain at an impasse because the State can no longer borrow loans from external agencies due to the poor progress of the works and the non-clearance of payments (contributions).

Taking note of the same, the Department of Economic Affairs (DEA) under the Union Ministry of Finance wrote a letter requesting an explanation from the Andhra Department of Finance.

“The overall situation of the use of advances granted by various authorities is not so encouraging because a very large amount of advances is in the accounts of the government of Andhra Pradesh. As of September 7, the amount released as The advance amounts to US $ 124.65 million, roughly equivalent to 960 crore, ”the DEA noted in its letter to the Principal Secretary of Finance.

The DEA also noted that the use of the loan amount was “not that high”, indicating that the cost of interest was increasing but the execution of the project was at a slow pace. DEA officials also called senior officials from various state departments and “gave them ears” of the grim situation.

“We are bombarded with questions about the state of the work and the use of funds (put forward by foreign agencies), but our bulletin is only filled with blanks. They gave us money but we cannot tell them we don’t have it, ”one bureaucrat observed.

“On the one hand, the state government is struggling to get loans but, on the other hand, secured loans are not being spent for their intended purpose,” he told PTI.

DEA warns Andhra government

Currently, there are 14 EAPs active in Andhra Pradesh, with loans from foreign lenders like World Bank, Asian Infrastructure Investment Bank, International Fund for Agricultural Development (IFAD), Asian Development Bank ( AfDB), the International Bank for Reconstruction and Development (IBRD), Japan International Cooperation Agency, New Development Bank and KfW of Germany.

The DEA in particular referred to six such projects for which the AfDB, AIIB, IBRD and IFAD have already released $ 124.65 million in advance.

According to the DEA letter, $ 43.35 million (approximately 316 crore) is expected to be available to the state as the remaining advance out of the total disbursement of $ 71.13 million. The DEA has warned the state to ensure that EAPs are “completed at a faster rate” by liquidating advances since the closing date for four projects is approaching.

(With contributions from the agency)

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