This can’t be a routine letter. The 8-page letter is provided in our blog. Those who are interested can download it. It is obtained from a friend in the media. After this letter, if the L&T continues with this project it has to explain how the Project will become financially viable hereafter. Because L&T thought that AP will not be divided, or, if divided GHMC made a UT. Now they feel the status of Hyderabad has changed and its capacity is reduced to attract investments. Its Subject is: Hyderabad Metro Rail: Project Takeover Proposal The letter by L&T Metro’s MD, Mr. Gadgil, to the MD of HMR is dated 10th September 2014. In the letter, Gadgil cites 7 letters of correspondence between L&T, HMR and Chief Minister of erstwhile AP between 6 February to 15 July 2014. He raises two main issues in the present letter. 1. Delay in providing Right of Way (ROW) to the L&T for execution of works faster as per the Concession Agreement. Providing ROW is the obligation of the Govt of AP/T. 2. He raises the changed circumstances due to division of AP and its adverse impact on the financial viability of the metro. In point 16, it is argued that “Prior to bifurcation of Andhra Pradesh, Hyderabad was the capital city of state which was well developed, espousing various eminent districts and port towns. However, now it is the capital city of a smaller state with lesser resources than the undivided Andhra Pradesh……Further, there is reduction in the strength of representation of the State in the Parliament. Thus, the position of Hyderabad in drawing investments, both the Central Government and private sector has altered. Consequently, the potential returns from its real estate will get reduced…The change in the status of Hyderabad has resulted in a significant change in the economic and political outlook of Hyderabad, thereby causing material adverse impact on the financial viability of the Project”. L&T did not think that AP will be divided. In point 22, he mentions that various agitations have been made, without any success, for creation of Telangana. So, we could not anticipate the bifurcation of AP till the AP Reorganisation Bill was introduced. L&T seems to have hoped that the GHMC will be made an UT. It is interesting to note that in point 23(iii) he mentions that the creation of Greater Hyderabad (i.e GHMC) in 2007 was viewed “as a precursor to converting the city into a Union Territory, if the state was split”. In point 24, he states …”it would be most appropriate that the GoT should take over the Project and the underlying contract from the Concessionaire. The GoT should do so by restituting the Concessionaire in a manner whereby the Concessionaire’s property and entitlements are returned to it”.
Posted on: Wed, 17 Sep 2014 11:05:11 +0000