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L&T to exit Hyderabad Metro project as Cong govt's free bus ride scheme hits passenger volume
Photo courtesy: Fly2Blue - Own work commons.wikimedia.org

L&T to exit Hyderabad Metro project as Cong govt's free bus ride scheme hits passenger volume

| @indiablooms | 12 May 2024, 08:56 pm

Hyderabad: Infrastructure and engineering firm L&T is mulling offloading its stake in the Hyderabad Metro project after 2026, citing the free bus rides offered by the Congress government, media reports said.

R Shankar Raman, the director of L&T, stated that the company, which holds a 90 percent stake in the metro project, finds the ridership levels "less interesting."

The Congress government in Telangana owns the remaining 10 percent of Hyderabad Metro.

L&T has a 65-year concession to run the metro system.

In an interview with Business Today TV, India Today's sister channel, Raman, also L&T's president and Chief Financial Officer (CFO), said women were travelling more on buses despite of no increase in the number of buses risen due to zero fare while men "were moving to the railway wagons".

"There is a gender distribution that is happening in the transportation system. Buses are being used by women who pay nothing and the metro is used by men who pay Rs 35 on an average per ticket," he said.

The Mahalakshmi bus scheme allows women and transgenders to take rides without paying any fare on government-run non-AC buses in Telangana.

He told Business Today TV that L&T has successfully secured a Rs 3,000 crore soft loan from the Telangana government, which will be repaid over time without accruing interest.

The company intends to generate revenue by monetizing certain real estate assets associated with the metro system.

"My own assessment is that when we sit down for the FY26-FY31 plan, this could be an asset to be monetised in that period because it would then be of interest to investors, particularly the pension funds and global funds given the 65-year concession," he said.

Asked about how the state government's free bus rides impacted footfalls, Raman said it made it less interesting, the report said.

"It has taken away the women from the compartments and since the women are occupying the buses and the number of buses has not increased, the men from the buses are moving to the railway wagons," he said.

Raman stated that government decisions made on promises could not help the state's finances. "There is no fun in doing that," he said.

Although he lauded the state government's initiative, he voiced concerns that a city like Hyderabad should not depend solely on vehicles prone to pollution, considering the move as "unpredictable".

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