Due to the lockdown period, there have been massive losses in business as well as for the transport services also. When the Hyderabad Metro officials decided to halt its operations on May 22, little did they know that it would take so long for operations to resume again. Metro operations across the country continue to remain suspended owing to the COVID-19 pandemic. However, Hyderabad Metro officials are eagerly waiting for the Centre’s nod to begin operations.

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L&T operates the Hyderabad Metro Rail project. According to the annual report of L&T Metro Rail (Hyderabad) Limited, the revenue from operations and other income for the financial year 2019-2020 under review stood at Rs. 598.20 crores (including fare and non-fare revenue). This clearly means that Rs 1.63 crore was the daily revenue produced in the 2019-2020 financial year. Until Saturday, L&T has its operations suspended for a total of 160 days and counting, which counts to an estimated loss of more than Rs 260 crore.

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In the annual report, it is also mentioned, “The impact of the lockdown owing to COVID-19 pandemic currently can’t be assessed as on the date of closing of the books of accounts as the lockdown is still continuing and there is no clarity on the resumption of operations and amidst with what restrictions. Also, the consequent impact on the financial position and results of the Company for future periods cannot be assessed at present.”

While the losses are scaling, it is important to point out that it is likely that L&T Metro Rail (Hyderabad) Limited may request the force majeure clauses of the Concession Agreement.  In the annual report, it is mentioned that the company is protected by the force majeure clauses of the Concession Agreement.

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