Metro Rail cost to shoot up

Hyderabad: The cost of Hyderabad Metro Rail (HMR) project has escalated by Rs 2,500 crore to Rs 3,000 crore, said L&T Metro Rail Hyderabad Limited (LTMRHL), the developer of the elevated metro project in public private partnership.

l Officials say the project cost will escalate by `2,500 cr to `3,000 cr

LTMRHL chief executive and managing director VB Gadgil told reporters here on Tuesday that the project was in a “very very precarious mode”.

He attributed the cost overrun to high inflation and increase in interest rates by 13 to 14 times during last three years. The cost escalation does not include realignment on two corridors proposed by the Telangana State government.

He called for immediate addressing of all issues with regard to proposed realignment, saying the delay would further escalate the cost. He pointed out that work on some sections was stopped for three months.

NVS Reddy, managing director, HMR, had earlier stated that the realignment would lead to cost escalation up to Rs 400 crore. Gadgil said they completed 28 per cent of the project and were confident of overcoming all challenges.

The LTMRHL is building 72-km elevated metro project, said to be the biggest project in the world in public private partnership. Gadgil said they so far spent about Rs 5,000 crore on the project.

This includes Rs 1,500 crore from equity and Rs 3,500 crore from bank loans. To a query, he said the firm had dropped the proposal for external commercial borrowing (ECB). The project developer was also working on swapping high cost debts with low cost one to the tune of Rs 1,000 crore.