India’s first PPP Metro Project facing financial crises, seek help of Telangana govt.

L&T Metro Rail had met the chief minister K. Chandrashekar Rao and apprised him of the losses suffered by the company and requested him to extend help to overcome such losses

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Hyderabad Metro
Hyderabad Metro
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HYDERABAD (Metro Rail News): The financial losses for the Hyderabad Metro Rail continues to increase as losses amounting to INR 400 Crores was incurred during the first quarter (between April and June 2021) of the current financial year itself which may further increase to INR 1500 Crores at the end of this year.

Hyderabad Metro is India’s first public-private partnership (PPP) Metro Rail project. It is built and operated by L&T Metro Rail Hyderabad Ltd.(L&TMRH) which has now sought help of the State government to overcome the losses.

According to annual report of L&TMRH, the losses for the financial year 2020-21 have increased to INR 1766.74 Crores as the metro services remain closed for about six months from March 22 to Sept. 8, 2020 due to the COVID-19 pandemic. The losses for the financial year 2019-20 were INR 382.20 Crores.

The revenue from operations and other income for the financial year 2020-21 was INR 227.95 Crores including fare and non-fare revenue as against INR 598.20 Crores for the previous financial year. Revenue from fare collection revenue stood at INR 83.98 Crores and from other segments, it was INR 143.97 Crores.

In the annual report, the losses are mainly attributed to disruption in the metro rail operations due to low ridership and real estate operational activities, due to fall in revenues as a consequence of revenue sharing model of lease rentals in the place of fixed rentals due to fall in footfalls and additional costs required to ensure the health and safety of all employees of the Company.

According to sources, the other reasons for low ridership of Hyderabad Metro are poor last mile connectivity and higher Metro fares in comparison to other public transport like RTC buses.

As per L&T officials, Hyderabad Metro is suffering losses at INR 5 Crores per day while its total daily income is not more than INR 1 Crore. About INR 300 Crores is required yearly to run the service.

Before the Covid-19 pandemic, Hyderabad Metro daily ridership was around 4 lakhs and revenue of INR 40 Crores per month. As the pandemic struck, Metro services remain closed for 169 days. When services resume this year, the footfall was around 2 lakhs in February. As the third wave of the pandemic arrived, the Metro services were again disrupted and then began to operate with limited timings resulting in further decline in daily ridership which at present is around one lakh.

Recently, officials from the L&T Metro Rail had met the chief minister K. Chandrashekar Rao and apprised him of the losses suffered by the company and requested him to extend help to overcome such losses. According to sources, L&T had submitted their financial details to the State government regarding the same.

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