Companies

L&T secures extension of repayment deadline from lenders for Hyderabad metro project

V Rishi Kumar Hyderabad | Updated on September 10, 2018 Published on September 10, 2018

In talks with State on project cost escalation

With the Hyderabad metro rail project poised for completion by March 2019, a year and a half after the initial programmed schedule of July 2017, the lenders have given construction major L&T more time for commercial operation up to July 2019, with a corresponding increase in loan period.

As per the revised schedule, the metro rail project, being implemented by concessionaire L&T, the loan repayment will start from September 30, 2020.

However, the corresponding cost implication due to delays in securing right of way to implement the project is being assessed for claiming compensation, according to L&T's annual statement to its shareholders.

The ₹16,375-crore elevated metro rail project under implementation covers 72 km rail and 6 million sq ft of transit oriented development. This is being funded by a term loan of ₹11,478 crore, equity share capital of ₹3,439 crore and a Viability Gap Fund from the government of ₹1,458 crore.

In addition, the State government has invested more than ₹2,000 crore in facilitating construction and right of way.

Investment, VGF

L&T has as of March 2018, invested ₹14,723 crore in the project, including ₹2,241 crore during 2017-18. While a 30-km stretch was commissioned in November 2017 by the Prime Minister Narendra Modi, two other stretches, which will mark the completion of two of the three corridors, are expected to be commissioned by September and October-November. The other stretch minus the Old City segment, where there are right of way challenges, will be ready by March-April 2019.

Referring to the Transit-Oriented Development, L&T stated that commercial, operations at two locations including at the IT hub of Hitec city have commenced, and at two other locations are close to completion.

Efforts are on to develop a couple of other locations.

The metro concessionaire is exploring non-fare revenue generation through cross selling of products to commuters. This is seen to further get strengthened by metro expansion, which will result in higher ridership.

The Telangana government has plans to implement phase II of the metro project, covering 85 km, including providing an airport link. This will enhance the average ridership on the metro system significantly.

Outlook

Providing its outlook for metro, L&T states that once two corridors get fully commissioned during the calendar year, its operations would span 56 km and expand the ridership to about 6.15 lakh per day. Recently, the metro ridership crossed 20 million since its commissioning in November 2017.

The metro concessionaire has tied up with a solar power developer for 10 MW for captive use.

L&T is also exploring the possibility of offering consultancy services to other metros.

Published on September 10, 2018

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