Hyderabad: The Telangana government will formally take over the Hyderabad Metro rail project over from L&T Metro. It was agreed in principle that state government will take over the existing phase one of the metro rail by taking over the debt of the project which now stands at about Rs 13,000 Cr. The state has also agreed to pay about Rs 2,000 crore to L&T towards its equity investment as a one-time settlement.
The decision was taken after negotiations were held between both sides with an objective to expedite the phase 2 of the metro rail for approval by the Government of India (GoI). Until now, it was only speculated that L&T would exit the project due to the debt burden and the project not running on profits. It comes after L&T reiterated that it will not be able to participate in the phase 2 of the Hyderabad Metro rail project as an equity partner since it has exited the business of ownership and operation of transportation concession assets.
According to a statement from the Telangana government, Hyderabad has also slipped to the ninth position in India in terms of metro network length. The state government has also submitted proposals for the sanction of 8 lines as part of the phase 2A and 2B expansion for the Hyderabad Metro rail totalling about 163 kilometres of additional metro network.
“The primary concern expressed by Government of India is that the proposed phase 2 is being executed by a government agency while phase 1 metro in Hyderabad is a private entity and insisted on a definitive agreement with L&T for operational integration of phase 1 with the proposed phase 2 to process the proposal further,” said the Telangana government in a statement on Thursday, September 25.
The central government also requested L&T Metro to participate in the phase 2 Hyderabad Metro rail project as a joint venture. However, In response, L&T conveyed that it will neither be able to participate in phase 2A and phase 2B as equity partner nor sign the definitive agreement and expressed their willingness to offer their equity stake in LTMRHL to state or central government.
L&T says no in spite of Telangana CM’s intervention
Telangana chief minister Revanth Reddy and senior government officers also held meetings with the L&T officials to try and convince L&T to stay and participate in the phase 2 of the Hyderabad Metro rail project. However, L&T ‘reiterated’ that it will not be able to participate in the phase 2 of the metro project as an equity partner, stating that it has ‘exited the business of ownership and operation of transportation concession assets’.
The company also stated that it would not sign the “Definitive Agreement” for operational integration of phase 1 and phase 2 corridors of the Hyderabad Metro rail, which would also incorporate the revenue and cost sharing mechanisms etc., as insisted upon by Government of India, in order to process the phase 2 proposal.
L&T also reportedly informed the Telangana government that it is unable to sign the definitive agreement as it has major concerns regarding seamless train operations between the two phases and regarding revenue and cost sharing mechanisms. “As an alternative solution, and in order for Government of India to process the proposal further, he reiterated the offer to divest their complete stake in Phase 1 metro to the State government, that will make the phase 1 as a state government entity,” added the statement from the Telangana government.
Finally, discussions were held on financials, asset valuation etc., of the phase-I project. “The conditions of the take-over shall be worked out with mutual discussions and the process will be carried forward in a carefully calibrated and mutually agreeable manner, duly ensuring all legal and statutory compliances,” added the Telangana government’s statement.
Old City Hyderabad Metro rail work gains pace
As of now, the state is also focussing on expanding the Hyderabad Metro rail project in the Old City. The MGBS to Chandrayangutta stretch of the project City has gained pace, with pillar marking and road widening now in progress.
The 5.5-km corridor, part of the metro expansion into the Old City, has been carefully planned to reduce property acquisition while ensuring smooth connectivity. The number of affected properties has been brought down from 1,100 to around 900 through engineering redesign and route realignment.
Till now, 412 properties have been compensated and 380 are fully demolished. Rs 360 crore has already been released to the owners.
Groundwork for construction has commenced, with pillar locations, approximately 25 metres apart, already demarcated. Geotechnical investigation is in progress to determine the strength of soils at station and viaduct sites. A Differential Global Positioning System (DGPS) survey has been conducted to finalize pillar and station locations in a manner that ensures historical and religious buildings are not disturbed.
Temporary Benchmark (TBM) points have been established to assist the construction phase. Further, movement of underground utilities like water pipes, sewerage lines, stormwater drains, and overhead electrical lines has begun.
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