Hyderabad metro shows why development infrastructure should not be mixed up with politics

The Hyderabad Metro Rail, the country’s first elevated metro rail on PPP (private public partnership) is finally ready to chug after a roller–coaster ride of a decade. “It will not only change travel patterns but also behavioural patterns of people in the Nizam’s town,” said NVS Reddy, MD of HMRL, as it gets ready for launch on 28 November.

This comes as a great relief for the core management team of L&T MRH, its chairman SN Subramanyam and MD Shivanand Nimbargi who, over almost a decade, went through several ups and downs caused by successive political interventions, social activism leading to delays, PILs and cost hikes. “Thank God, we are rolling finally,” said a representative of the L&T MRH, which is the concessionaire, spending almost 90% of the project cost of Rs 16,375 crore at Rs 13,000 crore.

The L&T MRH, which is implementing the project with Hyderabad Metro Rail (HMR) (a Telangana government entity) and the Government of India, enjoys the concession for 35 years. The company laments that it has already lost two years since the appointment date of June 2012 set during Congress Chief Minister Kiran Kumar Reddy as the real work picked up only after the formation of Telangana in 2014. Even after resolving the issue of diversion and re-routing with the current Telangana Rashtra Samiti (TRS) government, they have been able to complete only 30 km of the 72 km route for which they originally inked the PPP deal and need an extension of 2 more years.

The TRS Roadblock

The scene changed in 2014 after the TRS government took over the reins of the project and its Chief Minister K Chandrasekhar Rao declared that Hyderabad would have a 200 km metro and that it would not be allowed to pass over historic locations like the Assembly and Sultan Bazaar. As if on cue, its political ally MIM also raised its voice against the Metro crisscrossing 12 historical locations in the Old City and sought realignment of the route.

L&T group chairman AM Naik wrote several detailed letters to KCR in a bid to resolve the issues and also called for caution about the legal aspect. The letter of February 2017 was part of a huge correspondence with the government to resolve challenges in execution of the project. The letter of Naik sought to relieve L&T from the project as there were “unusual” terms from the Telangana government and adverse economic conditions contributed to unforeseen cost escalation which made the project incapable of performance.

“The letter seeking termination of the project was wrongly highlighted by the newspapers, it was only a “gesture” and not final,” said VB Gadgil, Chief Executive of L&T Hyderabad Metro Rail in a media interaction in September.

L&T had allegedly lashed out at the government interference and delay in finalisation of routes and corridors. Politically, the Centre which had put in 10% of the cost at Rs 1458 crore was also wary of the Telangana government’s unsteady approach. It is alleged that the Centre finally cautioned that such an unclear approach by the Telangana government would only cause setbacks to other projects and subsequent central support cum guarantees. “We kept mum and Telangana finally saw the light, and GoI intervention also helped,” said a spokesman of the L&T HMR requesting anonymity.

The issue was discussed at a cabinet meet and finally the CMO which had initially leaked the letter of the ‘L&T threat to walk out’ worked out a compromise and dropped its demand for realignment and re-routing and asked the concessionaire to complete the project as scheduled. But the builder had lost two precious years already and the Telangana government kept dismissing L&T’s demand for an extension of the deadline by a year or two, insisting instead on completion of at least the first phase by hook or crook. “We wanted to showcase the Metro during the Global summit at Hyderabad,” said the CM who also holds the industry portfolio.

A Tunnel of Woes

The Metro Rail, Outer Ring Road and PV Expressway were part of the ‘Vision 2020’ document released by the Chandrababu Naidu government as urban infrastructure initiatives to support the IT explosion that began in early 2000. The Naidu government had done its homework on land acquisition from Wakf and endowment departments for development, and also the estimated Metro Rail cost at around Rs 10,000 crore. But his successor, YS Rajashekhara Reddy, with his focus on welfare schemes, put the Metro project in cold storage. After his 2008 electoral victory for a second innings, YSR finally brought the Metro Rail project out for bids.

The first bids of the PPP project took place in 2008 and was awarded to the consortium of Maytas, a wing of Satyam group. This was cancelled after the unraveling of the massive Satyam scam involving its founder Ramalinga Raju and the failure of Maytas to raise funds. YSR died in a chopper crash the following year and the Metro Rail project was back in cold storage in the political anarchy that followed.

The last Congress Chief Minister of undivided Andhra Pradesh N Kiran Kumar Reddy relaunched the process and awarded it to L&T in 2010 for Rs 12,132 crore and after preparatory work the launch date was set as June 2012 with a deadline for 2017 to complete the project. The Telangana agitation then intensified and work was hit once again. When the project was finally flagged off in 2014, after the creation of the new Telangana state, the government wanted the project to be completed in three years.