Centre summons Telangana CS for meeting on Hyderabad Metro imbroglio in Delhi

हैदराबाद Hyderabad: In an apparent bid to rein in the TRS government that has threatened to create hurdles for the Hyderabad Metro Rail project, the Centre has summoned Telangana chief secretary Rajiv Sharma for a meeting in Delhi on Friday in which representatives of the concession partner Larson & Toubro and authorities of Hyderabad Metro Rail Limited (HMRL) would also take part.

Sources said the Centre has taken a serious note of the developments in Telangana. Chief minister K Chandrasekhar Rao had stated recently that the alignment of corridor from LB Nagar to Miyapur should be changed so that the rail line goes underground near the assembly building. After KCR’s statement, sources said the TRS regime has been mounting pressure on L&T to stop the works following which the concessionaire partner suspended the construction activity near the assembly building four days ago.

After the threat from the TRS government, L&T complained to the Centre and Friday’s meeting of all concerned parties in Delhi is an outcome of that. Sources said the Union finance ministry called for the meeting because the state government did not comply with its direction issued a few days ago that it must cooperate with the concessionaire partner and ensure that the work schedule was not disturbed. While confirming the meeting, officials in the Telangana municipal administration and urban development department (MA&UD) said principal secretary S K Joshi is also likely to take part in the meeting. “We have received the notice for the meeting, it is yet to be decided as to who are all going to represent the state government,” Joshi told. NVS Reddy, managing director of HMRL, and V B Gadgil, chief executive and managing director of L&T Metro Rail (Hyderabad) Limited, are likely to attend the Delhi meeting.

This is the first time that the Centre is intervening after the Hyderabad Metro Rail project was cleared and the works started in July 2012. “It is significant to note that the Union finance ministry is intervening at a time when finance minister Arun Jaitley highlighted his government’s priority to encourage public private partnership (PPP) in infrastructure development. The Hyderabad Metro Rail project is being executed under the PPP model and the complaint is that the TRS government is harassing the concessionire partner and delaying the project which will make it unviable,” said the sources.

Apart from asking L&T to take the rail underground near the assembly building, KCR wants to save the Sultan Bazar traders from eviction and has asked the concessionire partner to change the alignment of corridor 2 from the original plan so that the shops in the bazar are saved from demolition.

The MA&UD officials said the CM’s insistence of changes in the alignment could lead to L&T invoking the ‘force majeure’ clause and claim a hefty penalty of approximately Rs 6,000 crore. L&T’s contention is that a change in design would result in further delay resulting in escalation of the cost of project which has already gone up from the original Rs 14,132 crore to over Rs.20,000 if inflation, currency fluctuation, and fluctuation in the rate of interest are factored in. According to the sources, per day’s delay would increase the cost of the project by Rs 5 crore. Incidentally, the metro rail project construction took off on July 4, 2012, almost two years behind schedule.

“It is alarming that the cost of project is escalating due to various factors. That is the reason why the Union finance ministry has convened the meeting. Otherwise, it is related to the Union urban development ministry,” said the official. Interestingly, Union minister M Venkaiah Naidu, who holds urban development portfolio, is mum on the issue and the sources said he is nudging the finance ministry to take the initiative for local political reasons. The officials said the Centre was intervening in its capacity as a stakeholder as it has invested Rs.1,458 crore in the form of viability gap fund.

Waking up to the seriousness of the issue, the CM has called a meeting of officials on Thursday to explore the avenues to convince the Centre on his government’s stand. Officials from HMRL, MA&UD, GHMC, HMDA, and other departments concerned are likely to attend the CM’s meeting.