L&T may exit Hyd metro as free bus rides hurt biz

MUMBAI/HYDERABAD: Telangana govt’s free bus ride scheme for women has impacted Hyderabad Metro Rail‘s ridership, causing its promoter L&T to consider exiting the project.
The metro project’s financials have been a concern for L&T, prompting it to list Hyderabad Metro as a non-core asset in its books from 2021. The metro ridership has fallen to 4.6 lakh people a day from 5.5 lakh in Nov 2023.The state introduced the free bus ride scheme for women on Dec 9, 2023.
For the project to be viable, the metro’s ridership should remain at over 5 lakh per day and its debt should come down to Rs 8,000 crore from Rs 12,000 crore.
L&T, which bagged the project in 2010, experienced costs rising to Rs 20,000 crore from an estimated Rs 14,000 crore due to multiple delays that saw the 69km line getting completed in 2020. Though some parties had shown an interest in Hyderabad Metro, L&T, which has a 65-year concession to run the project, didn’t go ahead with the sale as the price quoted didn’t meet its expectations.
While L&T praised the Congress-led Telangana govt’s initiative, it said the scheme has made metro ridership “less interesting” and will look to exit the project after 2026. The engineering giant owns 90% in Hyderabad Metro, while the Telangana govt owns the remaining 10%.
“There is a gender distribution that is happening in the transportation system. Buses are being used by women who pay nothing and the metro is used by men who pay Rs 35 on an average per ticket,” L&T’s CFO Shankar Raman was quoted as saying to Business Today TV. He added that govt’s move would not help the state’s finances.
“Our assessment is that when we sit down for the FY26 to FY31 plan, this could be an asset to be monetised in that period,” he said.


Leave a Reply

Your email address will not be published. Required fields are marked *

GreenLeaf Tw2sl