Irked L&T threatens to press exit button

September 17, 2014 11:07 pm | Updated November 16, 2021 11:35 pm IST - HYDERABAD:

Vexed over the delays in providing right of way (ROW), confusing signals about proposed change in alignment and expressing doubts about the Hyderabad Metro Rail (HMR) project’s viability after the State bifurcation, L&T Metro Rail Hyderabad (concessionaire building the project) has suggested the Telangana Government take over the project “since its completion is in public interest”.

At the same time, L&TMRH Chief Executive and Managing Director V.B. Gadgil said they were open to discussions for an amicable resolution of the issues and concerns raised. In a strong letter addressed to HMR MD N.V.S. Reddy last week with copies marked to the chief secretary and principal secretary of Municipal Administration & Urban Development Department, he demanded the presence of Mr. Reddy to meet with the lenders (SBI led public sector banks) to inform them about the “true state of the project.”

Claiming that the concessionaire, from the inception of the project, has been acting diligently, he said though timely progress was made, several difficulties and issues in executing the project is leading to significant cost escalations. While formation of Telangana State and change in status of Hyderabad has led to adverse economic conditions making it difficult to continue with the project, non availability of adequate space for building piers and other construction activities for RoW or right of way has led to delay in works.

Elaborating more on the bifurcation, Mr. Gadgil explained that the project was bid based on the economic, political and geographical importance of Hyderabad. Now, it is capital of a smaller State with lesser resources and its position in drawing investments, both from the Central Government and private sector has altered, affecting the potential of real estate returns based on which the bidding was done.

The role of the Government too was not “reasonable” post-birfucation despite it being a public, private partnership project (PPP). HMR, the special purpose vehicle of the TS Government, instead of assisting the concessionaire to tide over the changed circumstances, was denying any responsibility, he charged. It was also pointed out that the issue of bringing the project under the Central Metro Act has been pending for the last two years with talks showing no sign of any progress.

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