L&T Metro Rail (Hyderabad) Ltd., the special purpose vehicle implementing the elevated Hyderabad metro rail project, is likely to induct strategic equity partners as the project heads for completion, according to its Chief Executive, V.B. Gadgil.
“Though this is a possible option even now, we are not looking at it right now. But we may consider this at a later date, when the project is close to completion,” he said.
Gadgil said the project has gathered pace after nearly 18 months of preparatory work and most of the issues, including right of way and land are in place. He expressed confidence that the project will be ready for operation by the end of 2014 after trial runs and tests.
The SPV, which concluded financial closure of the mega public private partnership project, including Rs 11,480 crore of debt and Rs 3,440 crore of equity, is yet to draw funds from the banks. “We have thus far managed with internal resources and equity contribution and a Rs 500-crore bridge loan from YES Bank secured at an attractive rate,” he said.
The metro project expects to make its first withdrawal of debt later this month. The debt funding is led by a consortium of banks headed by State Bank of India and 10 other banks. So far L&T has invested about Rs 600 crore without having to access funds from lenders, he said.
Asked if there is any project cost escalation, Gadgil said such an exercise has not been done. In a project of such size and magnitude and spread across several years, the interest rate and currency fluctuations are by and large factored. In fact, even the biggest rail coach order awarded has been made in rupee terms, insulating against currency fluctuation, he said.
“Interest rate has been ruling high. But it has come down by 50 basis points. We expect it to soften further,” he explained.
rishikumar.vundi@thehindu.co.in