L&T Plans facing trouble with delay from TRS Government

With Metro Rail Project’s initial assessment considered to be Rs 14, 470 crore has now crossed Rs 20,000 crore worrying L&T at the huge cost overruns. L&T is now keen on recouping its investment as quickly as possible.

L&T was supposed to start earning revenue with the first stage of the train service between Nagole and Mettuguda launch on March 21 from both fare collection and transit-oriented development (TOD) that includes selling advertisement spaces in seven stations and leasing out retail spaces on that stretch.

But with the launch postponed by TRS Government to next year, L&T is seeking other options for revenue including speedy construction of malls and multiplexes to as part of the ‘TOD’ allowed in the concession agreement.

As TOD will be fetching 50 percent of the total revenue, L&T is selling commercial and office spaces in malls and 1,000 retail outlets across the 64 stations that are to come up with the metro rail project and is expecting Rs 500 crore from the TOD. With over 500 people hired for the marketing team to sell retail price aggressively, the brand value of Hyderabad has taken a drastic dip.

The TRS government’s intention to postpone the launch to coincide with the Greater Hyderabad Municipal elections has resulted in L&T suffering.