Hyderabad Metro Rail continues to report growing losses. L&T Hyderabad Metro posted a loss of Rs. 405.86 crore in the half-yearly results for the period ended September 30 of the current financial year. In the same half of the previous financial year, the loss was Rs. 380.46 crore.
The government plans to take over the first phase of the project from L&T and make it profitable. The takeover process, however, is stalled, and the financial deficit has widened during the deadlock.
Revenue from Metro Rail operations and other services between April and September was Rs. 524.78 crore. In the same period last year, it was Rs. 497.54 crore, a slight increase. Total expenditure, including operating costs, employee salaries, construction and management costs, interest on debt and depreciation, was Rs. 930.64 crore. It was Rs. 878 crore a year earlier.
Interest on loans is the main reason for the losses. Finance expenses in the half-year alone stood at Rs. 522.61 crore, and the income is just enough to pay this interest. Metro operations expenditure for the six months was Rs. 222.88 crore. Based on this year’s results, the interest burden works out to about Rs. 2.85 crore per day.
L&T Hyderabad Metro pays an average interest of 7 to 8 percent on loans taken for the first phase of the project. The government is expected to reschedule these loans when it takes over the Metro. A reduction of the interest rate by half could help lower the losses.
As part of this strategy, SBI has entrusted Caps with finding banks that offer interest rates of 3.5 to 4 percent on the rescheduled loans.
