Cost over-runs could make Hyderabad Metro unviable, while Fare Hike has its Limitations

Cost over-runs could make Hyderabad Metro unviable, while Fare Hike has its Limitations

Hyderabad: Challenges posed by an urban environment are no excuse for getting stuck during project execution — this seems to have been the guiding principle for L&T Metro Rail Hyderabad Limited (LTMRHL), which has in three years never faced a work stoppage on the 72-km three-corridor metro rail project in spite of recurring problems on the ground as well as at the government level.

Cost overruns could make the entire project unviable while increase in fares to make up the difference has its limitations as was evident by public protest against a Rs 100 fare for a one-way ride on the Mumbai metro. “We did not stop work. That was the basic direction of our execution strategy. We opened multiple fronts and if we had come across a roadblock at one place we resumed work on other front,” LTMRHL chief executive V B Gadgil told.

The state government had set July 2017 as the dead-line for completion of the Rs 14,700 crore project in five years. The appointed date was fixed as July 5, 2012 after taking into account the initial hiccups. The concession period is for 35 years with an entitlement to extend it for further 25 years.

Now this dead-line is an impossible task for the company as it would take at least 30 months to build the three 2-level interchange stations that link the three metro corridors at Ameerpet, MG Bus Station and the Parade Grounds, in addition to other issues ” It is in our interest to complete the project early as we are the concessionaire of the project, but this is something which is not entirely in our hands” he said.

The company had spent more than Rs 7,000 crore while accomplishing about 55 per cent of the work on all the three corridors by following the ‘no stopping of work’ strategy. Delays are manageable as long as the work is progressing. The second important strategy that worked well for the project was the adoption of precasting mode to the maximum possible extent. In fact, the overhead metro stations are being completely built with precast structures.

Next year the citizens of Hyderabad are likely to start riding Metro Rails in a limited distance. The company hopes to begin commercial operations on a 10 km stretch between Miyapur and Ameerpet of the most viable corridor and as well as the least viable 7 km long Nagole-Mettuguda stretch by March-April, 2016.

These two stretches were chosen together as opposed to the original idea of operationalising the Nagole-Mettuguda stretch in 2015 itself, only for the sake of operational viability from the start, according to the metro rail company chief executive.

For instance, the rider ship on Chennai Metro was yet to achieve critical mass and a similar situation would end up in serving the tourist interest by Hyderabad Metro. Which means the company has to bear higher operational costs compared to passenger revenues.

Coinciding with this initial phase, the L&T Metro is planning to complete around 1.3 million sft of transit oriented commercial space, including malls, at Erramanjil, Hitech City and Ameerpet.

While it took 11 years for completion of the first 7 kms of Mumbai Metro and 5 years for Delhi Metro, it was no mean achievement if the Hyderabad Metro developers will be able to operationalise close to 20 kms in over 3 years against all odds, the government officials say.

The Metro Rail execution was a difficult task as two projects-construction of metro rail and road expansion in metro rail routes as it is being built in the middle of the existing road- were happening simultaneously. Shifting the utilities including sewer and water pipelines, demolition of structures coming in way of the project were some of the other big problems the company faced on an ongoing basis.

Three rail over bridges (ROBs) near Secunderabad railway station, three alignment changes proposed by the Telangana government, the right of way and other issues that still exist in at least 10 km stretch are the other major issues still to be sorted out. The work got stuck at the Assembly complex, Sultan Bazar and on the entire stretch of MG Bustation-Falaknuma due to the alignment changes proposed by the government. This would involve another 10 kms of distance.

” We had given reports to the government explaining the pros and cons including the consequences pertaining to the changes three months ago. The authorities are yet to tell us what we should do,” Gadgil said. Hyderabad Metrorail Limited, the state government’s nodal agency, recently said the government is willing consider bearing the additional costs arising out of these changes.

On the whole things have changed considerably over the past three months with the chief secretary reviewing the problems on ground every Tuesday resulting in better coordination and cooperation from the government agencies, according to Gadgil.

There is a larger contentious issue that requires to be resolved at some point between the two parties of this PPP project was the claim of the cost escalation to the extent of around Rs 3,000 crore due to delays in facilitation by the government agencies. ” It is in that range and an independent assessment of the same has to be made to arrive at an ultimate figure,” he said.

The company has asked the government to take responsibility for the cost escalation while the government was yet to respond as it has to first constitute a committee to look into these claims.

“The criticality at this point of time is to get the matters of alignment and other field level issues sorted out to quickly start work on the remaining stretches. Other issues come later ,” says L&T MRHL chief.

Except for the cost overruns, the project is perfectly viable and even the fares will be lower compared to all other metros as the concessionaire here is dealing with a much larger size of a metro unlike in other cities, according to him.