Metro gives Larsen & Toubro monopoly over city transport

B V Shiv Shankar, Times of India, Hyderabad, Apr 27, 2012,

HYDERABAD: While Hyderabad metro rail is expected to be the panacea to the growing traffic congestion in the city, the urban rail services can sound the death knell to other public transportsystems already in place in the city due to a monopoly clause granted by the state to Larsen & Toubro, the private partner, through the concession agreement.

The clause in the concession agreement restricts the government from developing or improving the public transport system along the stretch of the three corridors- Miyapur to LB Nagar (corridor-I), Jubilee Bus Station to Falaknuma (corridor-II) and Nagole to Shiplaramam (corridor-III) - where the metro rail is taking shape. This would mean that there would be no scope for the improvement of the city bus service or MMTS (Multi-Model Transport System) that has emerged as a popular mode of urban rail transport.

The concession agreement says: "The government shall not construct any rail or road transport system between, inter alia, the three metro corridors" for a period of 35 years from the date the metro rail becomes operational. Further, L&T is entitled to an additional concession period of another 35 years. That means that the state government cannot develop any other public transport system for over 70 years without the consent of the private engineering company.

More startlingly, the concession agreement even restricts the government from revising the fare for the public transport or extending discounts or reductions in the fare and in the event of breach of these provisions, the government is liable to pay compensation to L&T under the latter's terms.

This clause can go against the state government and can end up acting against the interests of the commuter for whose benefit the metro rail has been conceived. This is because at a delay of Rs 5 crore per day in the construction of the project, keeping in mind the factors of the prevailing rate of inflation, insurance, currency fluctuation and rate of interest on the escalated project cost, the basic fare of the metro rail is expected to be around Rs 14 as of April 1, 2016. This would mean that the commuter would have to pay a high price for travelling on the metro rail even as the state would be helpless in improving the other modes of transport.

Charging that these provisions of the concession agreement are in violation of the Competition Act 2002, members of civil society, who have already petitioned the AP High Court against Hyderabad Metro Rail Limited (HMRL) on the charges of changing the alignment unilaterally, are now mulling moving the Competition Commission. "The provisions made in the concession agreement are monopolistic and are in defiance of the Competition Act. We are planning to complain to the Competition Commission," said Prof C Ramachandriah, who is spearheading the agitation against metro rail project.

While citing a similarity of the Hyderabad metro rail case with that of the Bangalore International Airport (BIA) that is facing a case under the Monopolistic Trade Practice Act after it insisted upon the closure of the government-run HAL airport in the city, Ramachandriah said curtailing the growth of public sector companies to suit the needs of private companies was unfair. A petition filed by Vivek Kulkarni, a former IAS officer, against BIA, is pending in the Karnataka high court.

However, authorities in HMRL said the metro rail service would only supplement the existing public transport system, and, hence, would not violate the Competition Act. "We are making use of the city buses as the feeder service for the metro rail. There is no question of treating it as our competitor," said a senior officer in the HMRL. An e-mail query to the L&T did not elicit reply.

HMR told to seek public opinion on metro rail

Seek public opinion on metro rail: High Court to Hyderabad Metro Rail Limited

Times of India,  Apr 18, 2012

HYDERABAD: A division bench of the high court on Tuesday asked both the authorities of Hyderabad Metro Rail Limited (HMRL), the state government and various other stakeholders including the owners of the properties which are being acquired for the project, to work out within a week a model through which the responsibility of eliciting public opinion is fulfilled and the project moves from its initial phase to the next stage.

The bench was hearing an appeal filed by HMRL against the order of a single judge staying the ongoing project work. The judge found fault with the authorities for not hearing the public before going ahead with the project work. The stay was granted following a petition filed by the owners of the properties.

The metro rail authorities showed the details of the project to the bench comprising Chief JusticeMadan B Lokur and Justice P V Sanjay Kumar on Tuesday through a power point presentation.

D V Sitarama Murthy, senior counsel for the property owners, said that the project was completely shrouded in mystery as the officials displayed a scant regard for a democratic approach. "Their arrogance in refusing even to listen to us is disturbing," he said. "Their attempt to describe it as a tramway is also not correct," he said and added that the project was very much a metro rail. The dangerous curves in the proposed line between Ameerpet and Shilparamam were a result of change of alignments. In crowded areas, the options of underground rail should be considered, he said. The chief justice asked both the authorities and the petitioners to work out a model through which public opinion on the project could be elicited. "It's not possible to hear half of Hyderabad now. Therefore, it would be better for each side to nominate experts to put forward their opinion during the public hearing," he said.

It's tramway, not metro rail

It's tramway, not metro rail

B.V. Shiv Shankar, Times of India, Apr 15, 2012.

HYDERABAD: Is Hyderabad going to have a metro rail or a glorified toy train chugging through the city at a snail's pace? In a surprising declaration before the AP high court, Hyderabad Metro Rail Limited (HMRL) Managing Director,  N V S Reddy said that though the project is named as metro rail, in reality, it is a tramway. This was stated in the writ petition filed in the high court on April 9 seeking the vacation of the stay imposed by a single bench of the court last month on the works on the stretch between Ameerpet and Jubilee Hills of corridor 3 (Nagole-Shilparamam) of the 'metro rail' project.

"Hyderabad Metro Rail project is a tramway and that merely the project is named as metro rail will not cease to be a tramway," N V S Reddy said in the petition. What Reddy meant was that instead of a rapid mass transport that is supposed to be a panacea for the city's growing traffic problem, what actually taking shape is a low potential tramway.
"With the advancement of technology, it is possible to bring a tramway at an elevated level and it was valid because the service is only meant for intra-city traffic unlike a rail system that is meant for inter-city long-distance traffic," N V S Reddy said in the writ petition. HMRL's appeal seeking the vacation of the stay is slated to be heard by the division bench of Chief JusticeMadan B Lokur and Justice P V Sanjay Kumar on April 17.

Experts feel a tramway can never match a metro rail in terms of handling traffic load and speed. While the metro rail - a rapid mass transit system -has a maximum speed of 120 km per hour and an average speed of 80 kmph, a tramway can travel at a maximum speed of 40 km per hour and will have an average speed of a mere 20-25 kmph!

As far as the traffic capacity is concerned, a metro train can handle 50,000 passengers per hour per direction (PPD) at peak hours, while a tramway's capacity is just 4,000 passengers per hour per direction. Normally, a tramway is suitable for short-distance public transport carrying low passenger load with low speed and coal mines where the services are used to transport workers from one side to other and in amusement parks.

L&T stays away from Metro site tour

L&T stays away from Hyderabad Metro Rail Limited site tour

Times of India,| Apr 7, 2012.

HYDERABAD: While Hyderabad Metro Rail Limited (HMRL) claimed on Friday that the project was well on course, representatives of Larsen & Toubro, the project contractor, were conspicuous by their absence when the site inspection was conducted. 

Sources in L&T said the company was insisting on addressing critical issues like getting the HC stay vacated on the works in the stretch between Ameerpet and Jubilee Hills, which is a part of Corridor-III between Nagole and Shilparamam, before claiming that all was well as far as the progress of the project was concerned. 

HMRL took the media on a tour to Miyapur where it acquired 104 acres of land for the project, recently, after the high court gave its nod to fresh notification for the land acquisition. Legislators Jayaprakash Narayan and Bhikshapathi Yadav, representing Kukatpally and Serilingampally, through which the metro rail passes, accompanied the team. 

A highly-placed source in the L&T said the company was not interested in being present at the event as it would convey a wrong message that the project work had begun when, actually, it was not the case. "Preparatory works are not the actual works and people must not be confused about it. Our participation would have created that confusion and, therefore, we stayed away," said the source. 

The sources in the L&T said the company was particularly concerned about the court stay on the works on the stretch between Ameerpet and Jubilee Hills as the court had made some serious observations about the modalities of dealing with the project when it gave the stay order last month. The court has said: "There is a serious lacuna in the very launching of the project, under the AP Tramways Act, although it is almost a full-fledged railway." 

While HMRL is taking time to file an appeal in the court asking for vacation of the stay in the backdrop of the court's scathing remarks, L&T is understood to have expressed its concerned over the delay. "HMRL's priority should have been to take efforts to vacate the stay instead of conducting the site visits that would not take us anywhere at this stage," said the sources in L&T.

Replying to media query relating to the issue at the site visit, NVS Reddy, managing director of HMRL, said the efforts were on to tackle all the legal issues pending. "I would not like to talk about the stay order at this juncture as it would be sub judice. But, I am sure that we can convince the court that we are on right track and there is no doubt in our mind that the project will face any hurdles on its way." 

Sources in the HMRL said they were studying the court's order and would take some more time before filing the appeal as it had to be done critically well considering the court's remarks. 

Apart from the stay order there are many issues to be resolved before handing over the entire Right of Way (ROW) to the L&T. While HMRL is yet to acquire 15.5 acres of land, earmarked for the project in Osmania University, the project evoked violent protests in Sultan Bazar area that comes in the. Besides, HMRL Road widening is yet to be done at various parts along the stretch of the planned alignment of the project.

High Court stays works on a key stretch of Metro Corridor-3

The Andhra Pradesh High Court on Thursday stayed the execution of all works of the Hyderabad Metro Rail (HMR) pertaining to corridor three between Greenlands and Shilparamam. The stay orders were given by Justice L. Narasimha Reddy, who was hearing a writ petition filed by a group of affected people who formed a Joint Action Committee. Their contention was that the metro rail alignment in respect of Ameerpet-Greenlands stretch was realigned without consulting the people whose properties would have to be demolished.

Some of the excerpts relevant points from the judgment are - 

- The effort of the HMR appears to be, to shield or immunise itself from any plausible objections, and unfortunately the State, in its anxiety to spread a red-carpet to a private agency, has chosen to violate and break the law, enacted by itself.

- It is not out of place to mention that the very purpose of enacting the A.P. Tramways Act was, keeping in view the present ‘Metro Railway Project’.  So much of urgency was felt that an ordinance was issued and later on, it became an Act.

- Metro Rail was granted on earlier occasion in favour of an agency, in a similar clandestine manner, keeping the entire project away from public scrutiny.  At least when its decision turned out to be a blunder, it ought to have been careful and followed the procedure prescribed under the relevant provisions of law.

- Acceptance of the contention of the respondents would lead to disastrous consequences.  A scheme, which involves transfer of vast extents of Government land, acquisition of large number of private properties, dislocation of the road transport system for a considerable time, conferring of the largesse of a high magnitude upon a private agency, cannot take place without reference to any public opinion.  

(Note: we will upload the judgment copy soon - C.R)

Metro rail cost overshoots estimates

Metro rail cost overshoots estimates

B.V. Shankar, Times of India, Mar 8, 2012.

HYDERABAD: The Hyderabad Metro Rail Project, plagued with initial hiccups, is poised to be the costliest urban rail service in India with each day's delay in commencement of construction work adding Rs 5 crore to the escalating project cost, now estimated at Rs 15,957 crore. Going by the calculations of Hyderabad Metro Rail limited (HMRL), the fare would be the most expensive in the country. The reason: escalation of project cost because of the tardy pace of work. 

In a counter affidavit filed before the high court, N V S Reddy, managing director of HMRL, has said he was concerned over the escalation of project cost due to delay in beginning of the construction work that is already a year behind schedule. As per the concession agreement, the construction work of the Hyderabad metro rail project should have commenced on March 3, 2011. The official estimated cost of the project at present stands at Rs 14, 132 crore but at an interest rate of 13%, a day's delay would increase the cost of the project by Rs 5 crore. 

Since the project has already been delayed by a year, the interest component has accumulated to Rs 1,825 crore. As a result, the final current cost of the project stands at Rs 15, 957 crore. N V S Reddy had said the HMRL would give right of way (ROW) to L&T executing the project this month so that works would start and stage I - an 8 km stretch between Nagole and Mettuguda - in corridor III would be operational in December 2014. But, till date, there has been no progress on this front and the possibility of the construction work starting in March has become virtually impossible. The escalation of project cost will only result in higher fares, as sale of tickets is a major component of cost recovery for the L&T, the concessionaire executing the project on a public private partnership (PPP) model. "The ticket rates are fixed according to the concession agreement and subsequent government order. It is true that the delay costs money, so we are as anxious as anyone that the project should take off at the earliest," said Vivek B Gadgil, chief executive and managing director of L&T Metro Rail Hyderabad. 

Among the three metro rail services of the country- Delhi, Kolkata, and Bangalore- Namma Metro of Bangalore is the costliest at present and Hyderabad Metro is all set to overtake it in terms of fare price. Now, the basic price of a metro ticket (minimum rate up to 2 km) in Bangalore is Rs 10, while the average basic prices are Rs 5.60 and Rs 5.00 in Delhi and Kolkata respectively. 

In Hyderabad, it would be a little higher than Rs 14, in case the metro rail is thrown open to service in 2016, the deadline as per the concession agreement signed between the state government and L& T in (Detailed Project Report) prepared in 2003, when the project was conceived with two corridors. Fixing the deadline at 2008, the DPR pegged the basic fare at Rs 5. The DPR said each day's delay would add Rs 35 lakh to the cost of project, considering inflation alone that would enhance the basic fare. 

A second DPR was prepared in December 2006 adding Corridor III, and the estimated project was revised upwards to Rs 7711 crore and the basic fare fixed at Rs 6 with 2011 as the deadline for the commissioning of the project. The second DPR also said that each day's delay would add Rs 35 lakh to the project cost.The cost of the project was estimated at Rs 4,206 crore in the DPR Project. 

"Tracing the footprints of the project since its conception, one can understand that the delay in starting the works is creating huge burden on the users of the service. The delay is caused due to ill conception of the project and we are not sure whether it would be commissioned before 2020. Even if that deadline is achieved, the fares will be so high that the service will not be affordable to the people for whom the public transport was aimed for," said Dr Chigurupati Ramachandriah, professor in urban studies, Centre for Social and Economic Studies. 

September 2010. As HMRL is unlikely to meet the deadline, the fare prices are destined to travel further north with each day's delay. A Government Order notified, on April 14, 2011, has said the basic fare of HMR ticket would be Rs 8 keeping April 1, 2014 as the date of commissioning of the project. The GO has authorized the concessionaire to increase the fare by 5% annually according to which the basic fare would be Rs 8.40 from April 1, 2015. Apart from this, the concessionaire is authorized to enhance the fare price based on the prevailing rate of inflation, insurance, currency fluctuation, rate of interest on escalated project cost. 

The concessionaire is allowed to revise the fare considering 60% of WPI (Wholesale Price Index, measuring inflation) and accordingly, the basic price would be Rs 9.40, on April 1, 2015. Considering other factors - insurance, currency fluctuation and floating interest rate - it would increase further and by April 1, 2016 the basic fare would be just a little more than Rs 14. And as per the BMRCL (Bangalore Metro Rail Corporation Limited) calculation, the basic fare for Bangalore Metro as on April 1, 2016 would be Rs 12.

Legal hurdles to Hyderabad Metro

Times View (box item)
     The main reason why the Hyderabad Metro Rail project is faced with opposition at every step is because it was thrust upon the city without consultations with people, the main stakeholders, as to what they wanted. Predictably then, the metro rail corridor alignments along bustling commercial stretches are being opposed tooth and nail with innumerable traders facing a loss of livelihood due to the project. The purpose of a public transport system like the metro rail is to ease commuters’ woes in the Greater Hyderabad region. But that cannot be achieved at the cost of inconveniencing the very people it aims to serve. The rail project will be riddled with problems unless the government revisits the blueprint with a fresh, people-friendly perspective.
Legal hurdles threaten to delay Metro rail project

Chances Of HMRL Making Dec. ’14 Deadline Look Bleak

BV Shiva Shankar TNN 
Hyderabad: The Hyderabad Metro Rail Ltd (HMRL) wants to kick off services with the first train plying between Nagole and Mettiguda some time in December 2014. 
    However, a series of roadblocks appear imminent which can only serve to delay the public transport project which has been designed to introduce muchneeded convenience to commuting in the city. 
    The HMRL is working towards a self-imposed deadline to ensure that Stage-1 — the 8km stretch between Nagole and Metiguda in Corridor III — is operational by December 2014 with plans afoot to commence work by March this year. 
    “Preliminary work including soil testing, identifying land for the depots and preparations for production of pre-cast slabs, have been completed. 
    “A few procedural issues exist but construction work should begin in March,” said a senior officer. Although HMRL is confident of meeting its deadline, the project is beset by all kinds of problems. 
    Having come together as Greenlands, Ameerpet, Madhuranagar, Yusufguda and Sri Krishna Nagar Joint Action committee (GAMYS-JAC), traders have moved high court on the charge that HMRL had unilaterally changed the alignment of Corridor III, between Nagole and Shilparamam. 
    The petition says that the alignment was changed to make the rail corridor pass through Ameerpet rather than Panjagutta, which was what had been envisaged in the original plan. The work cannot be taken up on the Ameerpet-Banjara Hills unless that issue is first sorted. 
    HMRL has now filed a counter affidavit arguing that the alignment has not been changed. The case is coming up for hearing Monday next and the fate of the work depends on its outcome. 
    The concession agreement signed between the state government and L&T, the project partner executing the works, stipulates five years to be the timeframe for the commissioning of the service. 
    The HMRL has yet to issue right of way to L&T but, as per the agreement, work should have started on March 3, 2011 and been completed by March 3, 2016. Needless to say, the current situation has made observers skeptical about the possibility of that deadline being met. 
    The HMRL is reportedly exploring the option of issuing right of way for those parts of Corridor III where there are no objections. “Going for piecemeal construction might be HMRL’s ploy to mislead the public on the progress of the work and silence the agitating traders. 
    “It is not fair on its part to go ahead with the work leaving issues unresolved,” said C Ramachandriah, an activist spearheading the agitation. 
    Even L&T, it is learnt, is not comfortable with right of way granted in bits and pieces and it could all add up to ensure that work is still to start in March. 
    Vivek B Gadgil, chief executive and managing director, L&T Metro Rail (Hyderabad), speaking from Dubai, told TOI that the company felt it imperative that the right of way notification is accompanied by no outstanding issues. 
    Apart from the alignment dispute, pending litigation on land acquisition, too, has hit the project. 
    Of the 269 acres of land earmarked for the project, 104 acres are tied up in litigation. Authorities said that they had got the high court’s nod to issue a fresh land acquisition notification which would deal with the legal hurdles. 
    However, many in the state government conceded that nothing short of a miracle could ensure that work on the metro rail project began in March this year.