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TRS Playing Havoc With L&T Plans!

TRS Playing Havoc With L&T Plans!

The initial assessment for the Metro Rail Project in Hyderabad was Rs 14,470 crore. It has now crossed Rs 20,000 crore.

L&T is understandably worried at the huge cost overruns and keen on recouping its investment as quickly as possible.

The first stage of the train service between Nagole and Mettuguda was supposed to be launched on March 21, in which case L&T would have started earning revenue from both fare collection and transit-oriented development (TOD), which includes leasing out retail spaces and selling advertisement spaces in seven stations on that stretch.

But the TRS government has postponed the launch to next year, L&T is desperately seeking other options to raise revenues.

The company is now focusing on speedy construction of malls and multiplexes to as part of the ‘TOD’ allowed in the concession agreement.

Since the TOD is designed to fetch 50 per cent of the total revenue, L&T is hard selling the commercial and office spaces in malls and over 1,000 retail outlets across the 64 stations that are to come up along the three corridors of the metro rail project.

L&T is expecting not less than Rs 500 crore from the TOD. The company has already hired around 500 people for its marketing team to aggressively sell retail space. However, given the drastic dip in the brand value of Hyderabad, it might not find takers that easily.

But these stop-gap solutions wouldn’t have been necessary if the TRS hadn’t postponed the launch. And why did they do that?

The TRS wants the launch to coincide with the ‘Greater Hyderabad Municipal elections,’ I which votes of Seemandhras will play a crucial role. KCR wants to use the Metro Rail Project as a showpiece for his development agenda and woo the Seemandhraites and other voters to his Party fold which barely has a presence in Hyderabad. But the Metro Rail Project is by no means KCR’s brain child. And it is L&T that is suffering due to KCR’s politics.

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