Hyderabad: Hyderabad Metro rail has hit a new road block with the new Central Metro Act derecognising the concessionaire agreement between the state government and Larsen & Toubro to execute the project under a public-private partnership (PPP).
As there is no provision for the PPP model in the new Act, the Union urban development ministry now has to decide upon the Metro rail administrator (MRA) or owner of the project. While this has cast a shadow on the inauguration of the first stage between Nagole and Mettuguda on March 21, the state government has written to the Union urban development ministry and requested to expedite the process.
“In the first place, we have requested the Union urban development ministry to save our concessionaire agreement so that we can continue executing the Metro project under the PPP model,” said NVS Reddy, HMRL managing director.
While it takes a lot of procedural steps including an amendment to the Act, sources said that the Centre is unlikely to change the provision to include the PPP model to execute the Metro project. In such an event, there would be a big question mark about the position of L&T which has already invested more than Rs 6,000 crore into the project. The project cost was initially estimated at Rs 14,132 crore, but is now said to have reached Rs 20,000 crore.
While earlier, the Hyderabad Metro rail project was erroneously implemented under the provision of the Tramways Act, the Centre, in a bid to rectify the error, notified the project under the Central Metro Act last October which is applicable for all Metro rail projects in the country. The rectification, however, resulted in the ambiguity over the ownership of the project as the PPP model has no place in the new Act.
Interestingly, the development comes amidst the controversy over K Chandrasekhar Rao insisting on realignment of the project and L&T offering to quit complaining of harassment from the state government. The Centre’s decision to bring the project under the direct supervision of the project monitor group (PMG) which works under the PMO and notifying it under the new Central Metro Act is being viewed by some as steps leading to its eventual takeover by the state government
VB Gadgil, chief executive of L&T Metro rail (Hyderabad), however, ruled out the possibility of his company walking away. He said, “Naturally there are many procedural issues that need to be addressed when the governing Act is changed. It is up to the government to take a call and make a quick decision.”
The main concern, however, is about the slow nature of legislative procedures that could impact the project’s schedule. Officials in the state municipal administration and urban development department (MA&UD) said that they are worried that the project might not meet the March 21 deadline to commission the first stage, an 8-km stretch between Nagole and Mettuguda, timed with Ugadi.
“The train has completed the trial run on the Nagole-Mettuguda stretch and the Research Designs & Standards Organization (RDSO) has completed its mandatory tests for clearances. At this stage, the ownership ambiguity has come as a big dampener,” said an MA&UD official. As per norms, the MRA of the project has to apply for safety certification of the Commissioner of Railway Safety (CRS) after receiving RDSO clearance.
But, the hitch is that, the CRS will not accept the application unless it comes from the MRA. “If there is delay in deciding who the MRA is, then there will be delay in applying for CRS clearance. That means, there is a possibility of the project missing the March 21 milestone, while the bigger issue of the very ownership of the project stays,” said the official.