Hyderabad metro to have cost escalation of Rs 2,500-3,000 cr

Written by PTI | Hyderabad | Updated: Sep 3 2014, 03:02am hrs
L&T Metro Rail Hyderabad Ltd, which is developing a 72-km elevated metro rail here, today said the project is likely to see a cost escalation of between Rs 2,500 crore to Rs 3,000 crore.

It also said it was yet to get any communication from Telangana government on changing the alignment of tracks to avoid Legislative Assembly building and Sultan Bazar.

"The project presently is in a very very critical mode. On account of delay in initial date and high interest rate... today we are looking at almost Rs 2,500 crore to Rs 3,000 crore escalation," said V B Gadgil, Chief Executive and Managing Director, L&T Metro Rail (Hyderabad).

"L&T has spent Rs 4,800 crore on the project so far, including about Rs 1,500 crore in equity. Interest rates are ruling high at 12.5 per cent. We are working on swapping high cost debt to cheaper debt of about Rs 1,000 crore. It is in final discussion," Gadgil told reporters here.

L&T Hyderabad Metro Rail Pvt Ltd is an L&T subsidiary, which is developing the metro with an investment of Rs 14,132 crore. The total cost is Rs 16,375 crore, which includes Rs 14,132 crore for the metro rail system and another Rs 2,243 crore for the real estate development.

On Chief Minister K Chandrasekhar Rao's suggestion that the metro could consider realignment to avoid Assembly building and Sultan Bazar, Gadgil said, "We have no official communication on change of alignment so far."

"The project is at very precarious mode because in certain sections we have stopped the work for the last three months. Definitely it will have lot of impact. It may not be only the cost. We have to study the technical feasibility and on how much engineering we have to do re-work. Does it affect the work already which has done," he said.