A team of US officials Monday inspected Paigah Palace, a heritage structure, which will house the US consulate here.
The officials from US embassy and consulate in Chennai went around the building located in Begumpet near the airport and had discussions with officials from the external affairs ministry and the Andhra Pradesh government.
An advance team comprising two US officials had inspected the building last week and suggested some modifications to set up the consulate.
The fourth US consulate in the country after Mumbai, Chennai and Kolkata, is expected to begin functioning late next year or early 2008.
The decision to set up the consulate was taken during US President George W. Bush's visit to the city on March 3.
The state government has offered 10 acres of land at Gacchibowli on the city outskirts for building a permanent building for the consulate but the US officials have hinted that this could take eight to nine years.
During the past couple of months, the US officials had identified few buildings in the city as temporary arrangements. These included a posh building in Jubilee Hills, Dilkusha guesthouse near Raj Bhavan, the official residence of state governor and Paigah Palace.
The state government ruled out the first two choices on security grounds and agreed to lease out Paigah Palace, which currently houses the head office of Hyderabad Urban Development Authority (HUDA).
However, this choice was also not free from problems. The employees of HUDA, a government regulatory body, initially refused to give up the building but relented following assurance by Chief Minister Y.S. Rajasekhara Reddy that the HUDA office would later be shifted back to the building.
The Paigah Palace, built in the European style in the 1880s during Nizam's rule, has 20 spacious rooms and four huge halls with high ceiling that goes up to 26 feet.
The heritage structure was given a facelift recently by HUDA, and the interiors have been redesigned to make it more user friendly.
The US officials decided to have a consulate here as the number of visa seekers from the state was fast increasing. The visa seekers from the state have to travel to Chennai, New Delhi or Mumbai for visa interviews.
About 40 percent of the visas issued by the Chennai consulate are reported to be from Andhra Pradesh.
The state government officials said Hyderabad was preferred as a large number of IT professionals and students from this state are based in US and the city is also centrally located.