Hyderabad: A cold war is on between Hyderabad Metro Rail Limited (HMRL) and Larsen & Tubro (L&T), the concessionaire of Hyderabad metro rail project, over the payment of compensation due to change of alignment.
L&T managing director and chief executive officer Shivanand Nimbargl has lodged a complaint on the issue to the state government. Due to the change of alignment on some routes of Hyderabad Metro Rail, the cost of the project has reached Rs 18,829 crore from Rs 15,073 crore.
L&T has asked the state government to pay an additional amount of Rs 3,756 crore due to ‘change in law’ (change of alignment). HMRL said the amount is payable post-commercial operations, while L&T maintains that according to the agreement, it should be paid on yearly basis.
When this newspaper contacted L&T and HMRL on this, no one responded. L&T officials asked us to send a mail to Shivanand Nimbargi, but even after five days, the MD failed to respond to the mail. HMRL officials, too, did not respond on this issue.
In a letter to the state government, the L&T MD said: “HMRL, for reasons best known to them, have brought in a new interpretation stating that change in law is payable post commercial operation”.
“The restrictive interpretation of HMRL is in clear violation of the terms of concession agreement as the article 41.1 of concession stipulates for settlement on yearly basis,” the letter read.
It requested the state government’s intervention to direct the HMRL to pay the amount due at the earliest and honour the provisions of the concession agreement.
After the TRS came to power in Telangana in 2014, it changed some alignments in Hyderabad metro rail route. Due to this, the cost of the project has increased.
L&T had written to the state government on August 17 last year, requesting to pay additional amount as the cost of the project has increased. On March 24, 2017, TS chief secretary S.P. Singh held a review meeting with HMRL and L&T officials on metro rail project.
In this meeting, L&T officials asked the chief secretary to pay additional amount. Responding to this, the chief secretary asked L&T officials for a cost break-up of the additional financial support, which was complied with.
L&T MD Nimbargl told the government that delay in the right of way beyond March 2017 would lead to additional cost impact and the Raidurg extension will be at additional cost as per change of scope, adding that this increased cost of the project was as of March 31, 2017.
The cold war
- L&T sought the state government’s intervention.
- Rs 3,756 cr L&T says Hyderabad metro rail Project cost increased by Rs 3,756 crore due to change of alignment.
- Change of alignment on some routes of HMRL has increased the cost to Rs 18,829 crore from Rs 15,073 crore.
- The change in alignment was made after the TRS government came into power in 2014.
- L&T sought additional amount on yearly basis.
- HMRL says additional amount is payable post commercial operations only.
- L&T complain to the government saying HMRL decision violates the agreement.
