Is Telangana’s Mahalakshmi scheme pushing L&T Hyderabad Metro into red? A quick look

L&T Metro has been reporting losses for FYs 2022-2023, 2022-2021, and 2021-2020. The Mahalakshmi scheme was launched in December 2023.

ByDeepika Pasham

Published Jul 09, 2024 | 9:00 AM Updated Jul 09, 2024 | 9:00 AM

L&T says Telangana government's Mahalakshmi scheme has been affecting its revenue. (iStock)

The Hyderabad Metro Rail Project has run into a controversy with the operator, Larsen & Toubro (L&T) finding it unfeasible to continue the operation after the state government rolled out the Mahalakshmi Scheme.

The scheme, one of the guarantees the Congress had made to the electorate ahead of the Assembly polls, allowed free travel for girls, women and transgender persons in state-run non-luxury buses.

An L&T official said the firm might exit the Metro operation since the Mahalakshmi scheme was eating into its revenue. During a Lok Sabha poll campaign, Prime Minister Narendra Modi, too, hinted that the scheme had impacted the Metro.

However, the state government seemed unperturbed with Chief Minister A Revanth Reddy saying the company was free to the exit the project, and the state would take up the Metro operations.

L&T has been running the Hyderabad Metro Rail Project in a Public-Private-Partnership mode.

Also Read: Empowering journey of women on TSRTC’s ‘Zero-ticket’ buses

State refutes PM’s statement

Responding to the prime minister’s comment, state Transport Minister Ponnam Prabhakar, on 18 May, said no scheme was adversely affecting the Metro.

He pointed out viral videos showing people facing difficulties at Metro stations and advocated for adding more coaches to trains due to overcrowding. He expressed confidence that the company was not suffering losses.

A quick look at the Metro’s ridership, income, and expenses revealed that the ridership increased in most quarters, except two in 2023, during which it dipped by 0.6 percent to 0.7 percent.

However the L&T Metro has been reporting losses for the financial years 2022-2023, 2022-2021, and 2021-2020. The Mahalakshmi scheme was launched in December 2023.

The Hyderabad Metro Rail statistics revealed that the average metro ridership had improved from 2,85,000 passengers a day in Q1 FY 2022-23 to 4,22,000 passengers per day in Q1 FY 2023-24. The average ridership between January and March 2023 was 408,000 passengers a day.

The ridership in June 2023 was 445,000 passengers per day, higher than the Q1 FY 2023-24 average. The ridership crossed per day crossed the 500,000 mark on July 2023 and touched a record high of 536,000.

The profit and loss, income, expenses charts showed a revenue deficit. Hyderabad Metro received financial support of ₹150 crore from the Telangana government in the third quarter of 2023-24.  The cumulative amount received under this facility till December 2023 stood at ₹900 crore.

The L&T Metro website revealed that project reported losses during the financial years 2021-2022 and 2022-2023. The profit or loss for the fiscal year 2022-2023 was ₹1315.94 crore compared to ₹1746.21 in 2021-2022.

Also Read: Mahalakshmi scheme hits auto drivers in Hyderabad

Exiting is not an option

Revenue from operations, construction contracts and other income were ₹703.20 crores in 2022-2023 and ₹475.37 crores in 2021-2022 whereas the expenses including construction contract expenses, operating expenses, employee benefit expenses, finance costs were ₹2019.14 crores for 2022-2023 and ₹2221.58 crores for 2021-2022.

The daily ridership touched an all-time high of 5.47 lakh passengers on 23 September 2023. The average metro ridership improved from 3.94 lakh passengers a day in Q3 2022-2023 to 4.44 lakh passengers per day in Q3 FY 2023-24.

Average ridership in the previous quarter was 4.62 lakh passengers a day, primarily due to the long holidays, vacations and also the Mahalakshmi scheme.

Satish Reddy, a Software Engineer, opined that the Metro falls short during rush hours. He felt the ridership would increase if more coaches were made available.

“L&T was promised ₹3000 crore soft loan by the previous BRS government and released only ₹100 crore so they should work with the government. Exiting the project is not an option,” he said.

(Edited by Majnu Babu)

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