L&T Metro Rail gets ₹100 crore ‘soft loan’ from Telangana Govt

Telangana govt granted ₹100cr interest-free loan to L&TMRH, concessionnaire of Hyderabad Metro Rail. Loan to be repaid in 16th year. Losses reduced to ₹1,315.95cr in FY 2022-23. Revenue from metro rail ops & others ₹682.53cr. Fixed assets ₹16,766.30cr. Loan to tide over COVID losses. L&T in race for Airport Metro Rail project.

Telangana Government had granted an interest free soft loan of ₹100 crore as financial assistance to L&T Metro Rail Hyderabad (L&TMRH), the concessionnaire which has constructed and is running the Hyderabad Metro Rail (HMR) project following a ‘Supplemental Concession Agreement’ signed between them.

The “soft loan” is repayable on the 16th year by the company and the money has been utilised towards repayment of the outstanding loan and debt reduction. The firm had had also stated it had been able to reduce the loss to ₹1,315.95 crore in the last financial year of 2022-23 as against ₹1,745.85 crore the previous financial year of 2021-22, according to official sources on Monday.

Revenue from metro rail operations and others has been ₹682.53 crore as against ₹357.14 crore for the previous financial year year. The income for the firm is obtained from fare collection, real estate development as part of the Transit Oriented Development (TOD), advertising, retail at stations, right of way for telecom towers, etc.

The revenue from metro rail system and others for the financial year ended March 2023 was ₹478.87 crore (including construction revenue of ₹20.67 crore. In the financial year 2022-23, the Covid-19 situation had eased leading to more ridership which has now touched to five lakh passengers a day. The fixed assets of the company stand at about ₹16,766.30 crore

L&TMRH has been seeking financial assistance from the government citing cost overruns during the construction of the project due to delays in getting permission in completing the work and later heavy losses it had suffered on account of the commercial services being shut down following the outbreak of the COVID pandemic for close to five months.

The total loss was put around ₹3,000 crore and following a meeting with the Chief Minister K.Chandrasekhar Rao, a high level committee of officials were tasked to find out a solution for the firm to tide over the crises. The committee proposals or decisions taken are not yet public, they pointed out.

Incidentally, the parent company L&T is in the race for the 31 km ₹6,250 Airport Metro Rail project along with NCC for constructing it under the EPC mode unlike the first phase of metro rail built across three traffic corridors under the Public Private Partnership (PPP) mode.