Metro - Boon or Bane?

Metro conundrum By Kingshuk Nag (The Times of India, Hyderabad, 29 July 2011)

Will Hyderabad’s proposed metro be a boon or a bane? Opinion is divided on this issue. Though when the project was first conceived most people were enthusiastic and saw in the metro rail a symbol of development that Hyderabad was aspiring for, these days there are a lot who are apprehensive. “How many times will I have to give up land? First they took some land away from me for road expansion. Now they will want land for metro rail. Is this fair?” asked a businessman with an outlet on SP Road. “As it is, the traffic is bad on Begumpet road. What will happen when the metro works begins? How long will I take to reach office from home and vice versa” asks an executive who lives in Habsiguda and works in Banjara Hills. “The entire commercial area of Ameerpet will be destroyed apart from Sultan Bazar. The whole city will be disfigured. What we will have after metro rail will be Hyderabad in some other form,” says a heritage activist. These are all valid points. 

But equally troubled are the prime contractors of the project, the well known Larsen & Toubro. Though the financial closure of the project happened in early March and the company deposited a performance guarantee of Rs 360 crore, the land required for the project is not being made available to them. Naturally, the government is unable to persuade various agencies to part with land. L & T is worried because with each passing day its costs are escalating. The company has borrowed large sums from the market and will borrow more. The interest burden on the borrowed portion is increasing and with the rates hardening, future borrowings will be more costly. As per the concession agreement with L & T, the government has to pay a hefty penalty for every day’s delay in handing over the 269 acres of land at various places that it has to the company. A huge amount is already due to L & T on this account. But L & T knows that the state’s exchequer is empty and it is not a position to pay up. 
 

Kiran Kumar Reddy garu, when asked on this question, is very sensitive. “All decisions have been taken, we are going ahead,” he says a trifle aggressively. The aggression may be to cover up the realization that he has been put in a spot by predecessor K Rosaiah. With the Satyam scam and collapse of Maytas, the metro rail project went phut. It also became clear that Ramalinga Raju had conceived the metro rail as a real estate project than an urban transportation venture. This was a golden opportunity for Rosaiah. He could have realigned the routes of the project to take into account concerns now being raised. But instead of having a relook he blindly offered the same Maytas metro rail project to L & T (of course the financials changed). He obviously allowed himself to be persuaded by the same forces who were behind Raju. The result of the Rosaiah inaction is the mess we see. And this is just the beginning, what with the project now clearly taking a Telangana vs anti Telangana turn.