Telangana to keep metro moving
The Telangana government is seeking to extend metro rail services from Raidurg to Rajiv Gandhi International Airport at Shamshabad. Still, there is no definite clarity on the financial viability of the project. Operating the Hyderabad Metro Rail (HMR), L&T Metro Rail (Hyderabad) Limited (L&TMRHL) has written to the Telangana government but has yet to get any assistance from the state about the severe financial stress amid the lockdown.
Sources have hinted that instead of it being a PPP project if the state government completely takes over the project, the functioning of the services would be efficient.
It also projects a cumulative loss amounting to Rs 12,000 crore over the next 10 to 12 years and almost equivalent to the capital cost of the project, a combined cash gap snowballing to Rs 18,000 crore over the corresponding period and a loss of Rs 1,900 crore in the FY 2020-21 which are the highlighted key conclusions of expected financial stress in the coming years.
The letter added that unless the Telangana government steps in and provides the best possible financial support through a combination of measures (sic), it would become impossible to continue operations under such circumstances.
According to L&TMRHL’s 2019-20 annual report, while its total revenues stood at Rs 1,370 crore the company had suffered a net loss of Rs 382 crore in the last fiscal. Till the resumption of services, L&T had incurred a loss of Rs 300 crore a month during the lockdown period.
On 28 May 2020, L&T wrote to chief secretary Somesh Kumar about the severe financial stress in the letter accessed by the media from government sources.
An official spokesperson of L&TMRHL said that HMR operations were suspended for 169 days due to Covid-19. This situation caused severe financial loss to their business, even though it was inevitable. Presently, the company’s prime focus is to continue operations to keep their passengers safe and healthy by adhering to safety norms directed by the government. However, the company has requested help from the government and financial institutions to overcome the enormous financial burden on them. With all related stakeholders, L&TMRHL are exploring different options.
Source: The Times Of India