When the Hyderabad Metro officials decided to suspend its operations on March 22, little did they know that it would take so long for operations to resume again. Metro operations across the country continue to remain suspended owing to the COVID-19 pandemic. However, Hyderabad Metro officials are eagerly waiting for the Centre’s nod to begin operations.
L&T operates the Hyderabad Metro Rail project. According to the annual report of L&T Metro Rail (Hyderabad) Limited, the revenue from operations and other income for the financial year 2019-2020 under review stood at Rs. 598.20 crore (including fare and non-fare revenue). This means Rs 1.63 crore was the daily revenue generated in the 2019-2020 financial year. Until Saturday, L&T has its operations suspended for a total of 160 days and counting, which translates to an estimated loss of more than Rs 260 crore.
In the annual report, it is also mentioned, “The impact of the lockdown owing to COVID-19 pandemic currently can’t be assessed as on the date of closing of the books of accounts as the lockdown is still continuing and there is no clarity on the resumption of operations and amidst with what restrictions. Also, the consequent impact on the financial position and results of the Company for future periods cannot be assessed at present.”
With around 160 days having passed since the Metro operations were suspended in Hyderabad, the L&T staff are eagerly waiting for the Centre’s nod for operations to begin. Speaking to TNM, a Metro official revealed, “We are waiting for the required permissions to begin operations. Even if asked to resume operations from tomorrow, we are ready.”
While the losses are mounting, it is important to point out that it is likely that L&T Metro Rail (Hyderabad) Limited may invoke the force majeure clauses of the Concession Agreement. In the annual report it is mentioned that the company is protected by the force majeure clauses of the Concession Agreement.
The report said: “The company is protected by the force majeure clauses of the Concession Agreement to claim extension of concession period equal in length to the period during which the Concessionaire was prevented from collection of fare and reimbursement of force majeure costs. The management of the Company will study the impact and will lodge appropriate claims within reasonable time once the operations are resumed.”
According to the report, the concession period of the project is 35 years, from the appointed date of July 5, 2012 including the initial construction period of five years. This is extendable for a further period of 25 years, subject to fulfilment of certain conditions.
Hyderabad and Mumbai are the only two cities in the country where Metro Rail is operated by private players under the public-private partnership mode.
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