HYDERABAD: The Andhra Pradesh and Telangana governments have again locked horns, this time over sharing of foreign loans taken when the state was united.

Prior to June 2014, united Andhra Pradesh took loans to the tune of Rs 8,928 crore from different foreign financial institutions, including World Bank, Asian Development Bank and Japan International Cooperation Agency (JICA).

While the Telangana government wants the loan burden to be divided on the basis of population, AP wants the sharing to be based on the location of the projects for which the loans were raised. If the loans are divided on the basis of population, AP would have to take responsibility for repayment of 58 per cent of the total loans.

Finance officials in AP pointed out that most of the money raised were for specific projects such as cleaning of Hussainsagar (Rs 199 crore), construction of Outer Ring Road around Hyderabad (Rs 1,953 crore) and developing a power distribution network in Hyderabad (Rs 776 crore).

"Most of the development projects taken up were in and around Hyderabad city. So, we want the loans to be divided project-wise. If the population criteria is applied, then it would hurt AP's interests," AP finance principal secretary, PV Ramesh, told TOI.

The Comptroller and Auditor General (CAG) was given the task of dividing the assets and loans taken by united AP between the two states. Now, the chief secretaries of the two states have been asked to sort out the issue. If Telangana's argument is accepted, AP would have to pay Rs 5,096 crore and Telangana Rs 3,641 crore. On the other hand, if AP's point of view prevails, Telangana will have to pay Rs 5,222 crore and AP Rs 3,705 crore.

With the two states at loggerheads on the sharing of foreign loans, payment of installments to the principal has been defaulted for almost six months. While AP has already paid Rs 650 crore as its instalment, the Telangana government is yet to pay its share. Meanwhile, the foreign lenders have represented to the Union finance ministry and sought its intervention.