Controversy Erupts Over Hyderabad Metro Rail: N.V.S. Reddy's Comments on Losses Trigger Government Concerns

Hyderabad Metro Rail Faces New Challenges After N.V.S. Reddy's Comments

Highlights:

• N.V.S. Reddy, Managing Director of Hyderabad Metro Rail, raises concerns over L&T's annual financial losses.
• His comments about Metro's struggles have caused tensions within the government.
• Officials contemplate replacing Reddy, who has led the project for over 15 years.

In a surprising turn of events, N.V.S. Reddy, the Managing Director of Hyderabad Metro Rail Limited (HMRL), has triggered a wave of controversy with his recent remarks about the financial situation of the Hyderabad Metro project. Reddy's comments have not only raised concerns about the future of the Metro project but also led to growing tensions between him and senior government officials.

Speaking candidly about the current state of the project, Reddy stated that L&T (Larsen & Toubro), the company responsible for operating the Metro, is incurring significant financial losses. According to him, L&T is losing around Rs 1,300 crore annually, which has accumulated to a staggering total loss of Rs 6,000 crore. His statements raised alarms, particularly given the state government’s ambitious plans for Metro expansion.

A Timing That Raised Eyebrows

Reddy made these remarks just as the state government, led by Chief Minister Revanth Reddy, was preparing to launch the second and third phases of the Metro project—an expansion that is expected to cost around Rs 25,000 crore. These comments were viewed as unsettling by several senior government officials, who expressed concerns over the timing and the impact of such statements on public perception and investor confidence.

One senior official, speaking anonymously, termed Reddy’s comments "shocking and unnecessary," especially as the project’s second and third phases had already been approved. The official further emphasized that the government had been working diligently to secure the necessary funding for these phases and that Reddy should have been more supportive in his public statements.

L&T's Struggles and Metro's Financial Troubles

Reddy’s comments have also cast a spotlight on the financial difficulties faced by L&T in managing the project. Reports indicate that L&T might be considering exiting the project due to its escalating losses. Some of these losses are attributed to delays that followed the bifurcation of the state of Telangana, which created significant hurdles for the project’s execution. The delays were further exacerbated when former Chief Minister K. Chandrashekar Rao demanded changes to the original route, ultimately pushing the timeline for completion.

An official close to the project mentioned that L&T has struggled to recover revenue from the land allotted for Metro development. The company, which had limited experience in real estate development, found it challenging to leverage the land effectively, thus impacting its profitability.

Government Considers Leadership Changes

Given the controversial nature of Reddy’s remarks, which have apparently caused friction between the project’s leadership and the state government, there is now speculation about a possible leadership change at HMRL. For over 15 years, Reddy has overseen the Metro project, helping it navigate the complexities of urban transport development. However, his recent comments, especially at a crucial juncture in the project’s expansion, have led to calls for a shift in leadership.

While the state government has not confirmed any decision regarding his replacement, it is clear that Reddy’s tenure at the helm of the Metro project may now be under scrutiny.

Future of Hyderabad Metro Rail: What’s at Stake?

The controversy surrounding N.V.S. Reddy’s comments on L&T’s financial losses highlights the fragile balance between ambitious infrastructure projects and financial sustainability. With the state government aiming to expand the Metro network significantly, the future of the Hyderabad Metro Rail hinges on securing both public trust and private investment. As the second and third phases move forward, stakeholders are closely monitoring how this situation will evolve and whether leadership changes at HMRL could affect the overall direction of the project.

As of now, the focus remains on resolving the current financial issues and ensuring that the Metro expansion proceeds smoothly, despite the controversies swirling around it. The coming weeks will be crucial in determining the future of both the Metro project and the leadership at HMRL.