Q & A with Vasanth Rao, General Manager (finance), BMRCL: ‘Geology, not funds, the issue’
What is your take on the losses the metro is incurring?
The current services are fine for us to meet the operational cost. It is the debt services we have to figure out, for which we have time. In any large project like the metro, profits are not expected in the initial years. It is only after 6-7 years that we can look at profits. On Reach 2 we have new staff that have never been part of such projects, so opening the stretches partly gives an advantage for us to train them before we go big. We will be able to stabilize till it we open in a full-fledged way. They will have more awareness and be more prepared. Similarly, about 200-5,000 people visit these metro stations during weekends and most of them are first-timers. People will also get used to it in the meantime.
Are funds an issue for the metro?
Funds are not an issue for us at all. In phase 1, 55 per cent of the funds came from the government and 45 per cent from other agencies like AFD, HUDCO, JAIKA. For the remaining we floated bonds. We received about Rs 300 crores as bonds at Rs 8.97 interest which is quite good. This shows that the fundamentals of the company are very good. Foreign agencies would not have come up to invest if they have not seen viability in the project. After all, they invest after due diligence. For Phase 2 as well we are getting 200 million euros from the French agency.
What is the main problem for namma metro then?
It is not funds that are an issue; geology is the issue for us.
What is the status of the TBM in the north-south line which is encountering a number of hard rocks?
Yes, we have seen rocks, but all the three TBMs are moving. Due to rocks, the process has slowed down as frequent intervention is required and the cutter has to be changed, which is a very tough process.
