For Hyderabad Metro, Larsen and Toubro may raise Rs 1500 cr; first phase to be inaugurated by PM Modi

L&T Metro Rail Hyderabad (LTMRHL), which is building the 72-km elevated Metro project in Hyderabad, is in talks to raise fresh funds to complete the second phase of the Hyderabad Metro Rail project. The company wants to raise about Rs 1,000-1,500 crore to lower the cost of debt. The first phase of the 30-km route of Hyderabad Metro Rail project will be inaugurated by Prime Minister Narendra Modi on November 28 and the remaining stretch is expected to be completed by the end of next year. The erstwhile Andhra Pradesh government had signed the concession agreement with LTMRHL, a special purpose vehicle, for the development of this project under the Design, Build, Finance, Operate and Transfer (DBFT) basis. Billed the largest Metro rail project in the PPP mode, it was taken up in 2010 for Rs 14,132 crore. “Since this is a unique project, it is likely to attract both foreign and domestic equity partners on board. We are looking at funds or long-term loans. We are seeing a lot of attraction for this PPP project and hope to have a few equity partners on board, though not immediately, may be during the time of completion. This is being worked out by the holding company, L&T IDPL,” a top official from LTMRHL said.

An email sent to L&T IDPL did not elicit any response. L&T has reportedly sought an additional amount of Rs 3,756 crore from the state. The original construction period for the 72-km elevated Metro ended in July this year, but the project could not be completed due to various reasons. So, the developer was granted a 17-month extension. Owing to technical challenges and changing alignments, the project saw cost escalations and the revised project cost is estimated around Rs 17,000 crore. “The state government has not committed to bear the cost overrun of the project. The government has not confirmed cost escalation or committed itself to bear the additional expenditure,” IT and municipal administration and urban development minster KT Rama Rao had earlier said in the state assembly.

Larsen & Toubro Limited