L&T Metro Rail Hyderabad (L&TMRH), which has built and runs the Hyderabad Metro Rail, has been earning ₹40 crore a month including ₹30 crore from passenger fares and ₹10 crore from property development, which enables it to ‘break even’ in terms of running operations and maintenance currently.
But, having invested ₹12,674 crore in the project, including about ₹12,000 crore loan from State Bank of India-led consortium of banks, L&TMRH has to pay ₹1,300 crore interest annually. Hence, it could take anywhere from seven-eight years for the project to break even, said HMR MD N.V.S. Reddy on Tuesday.
In an interaction with presspersons at the Metro Rail Bhavan, he disclosed that while the Centre had disbursed ₹1,200 crore from the ₹1,458 crore Viability Gap Funding (VGF) made available for the Public, Private Partnership (PPP) project; the rest of the money is yet to be sanctioned even though the Law Ministry has given clearance.
“Unlike other metro projects across the country built with Centre-State government funds with low interest loans from agencies like JICA – Japanese International Cooperation Agency (JICA) of 1.5%, HMR was built with commercial bank loans taken at 11% interest and even now vested interests have been lobbying against the project preventing further funds infusion,” he charged.
The overall project cost is ₹21,000 crore since ₹14,132 crore is meant only for metro works, ₹2,500 crore was spent by State government for properties acquisition and utilities shift and L&TMRH sunk in ₹3,500 crore in equity and ₹2,243 crore for property development but it could spend ₹900 crore of the latter having used the rest for other works, said Mr. Reddy.