The Telangana Government and Engineering giant Larsen & Toubro to stare at another faceoff over the execution of the Rs 16,375-crore metro rail project in Hyderabad. L&T Metro Rail has suffered time and cost overruns even before and after the formation of Telangana State. July 2017 is the deadline for the company to complete the 72-km metro rail project.
Hyderabad Metro Rail project is designed with three corridors in the city. According to the reports, the Telangana Government officials and L&T officials confirmed that the infrastructure firm has sent a fresh request to the state government seeking an extension of construction deadline by at least 18 months and compensation for various impediments.
A concession agreement was signed in July 2012 which has seen cost overrun of Rs. 3,000 crores taking the projected cost to Rs. 20,000 crores. L&T has reportedly raised concerns with the state government in the past. After requesting to make the project financially viable, L&T Metro Rail’s chief executive officer VB Gadgil said, “the government is currently looking into our request and the discussions are going on”.
“The state government has given the right of way for most portions of the metro rail project except a stretch of 4-km in the old city and hence L&T’s request for compensating for time and cost overruns was rejected. We have asked them to expedite the works and complete the project on schedule,” said a senior Telangana official.
A bureaucrat said that the state government won’t accept the L&T’s request as it could culminate the complications on penalties and modifications to viability gap funding. Another State government official claims that the Telangana government did not refuse L&T’s request but asked to review the request with the detailed report.