Larsen & Toubro (L&T), India’s biggest engineering firm, may face difficulty in executing it’s biggest-ever build, operate and transfer project, Hyderabad Metro Rail, Andhra Pradesh. With issues like land acquisition for constructing key infrastructure and politics over protection of heritage structures along the road still remaining unresolved. The delay in implementation has increased the budgets set for the metro. Adding further was the delay in land acquisition. The over Rs16,000 Cr, 71km, metro rail has been going through several hurdles ever since it was conceived.
To undo the financial fiasco L&T Metro rail may raise cheaper foreign currency loans of up to Rs. 5740 Cr ($ 1.8 Bn). Over burdens of the reasons cited above has led the biggest Indian engineering company to foray for external funds.
L&T Metro Rail, CEO and MD, Vivek B Gadgil said, `as against the initial estimation of achieving break-even and operational profits within 7-8 years of operations. Now we may have to stretch the period by another 2-3 years.’ Another feeling is that due to the present scenario, even financial institutions might not pump-in funds, so the entire budget burden falls on the company. To avoid the foreseen fiasco the company had planned to garner the funds from international sources.
