Published Online:September 2024
Product Name:The IUP Journal of Case Folio
Product Type:Article
Product Code:IJCF030924
Author Name:P Hanumantha Rao
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:35-41
The Metro Rail Project of Hyderabad has been the biggest public-private partnership (PPP) project in the metro area globally. In large cities with a high population (about 8 million), metro projects are seen as important for infrastructure development. After the Metro Rail Project was completed, Hyderabad was expected to be the most popular city in India due to its integrated urban transport planning, which envisioned the use of convenient skywalks and multimodal connectivity. However, since the inception of the project, there have been several hurdles like division of the state of Andhra Pradesh, delays in land acquisition and differences between the government and L&T (the company which was awarded the project). This resulted in time overrun and cost overrun. In 2023, L&T expressed its desire to exit the project due to continuous losses. The present case aims at examining the financials of the Hyderabad metro, the consequences of its exit plan and the policy support required for the sustainability of such projects under PPP mode in India in the future.
Ram, a bright student pursuing a postgraduate program in management at a reputed B-School in Hyderabad with specialization in business economics and finance, read, on May 13, 2024, a newspaper article, “L&T May Exit Hyderabad Metro as Free Bus Rides Hurt Biz” published in the Times of India. This raised several questions in his mind like “Was the metro at all needed in India?” “How would metro projects be viable to sponsors?” “What business the government has in business?” “What would be the effect of free bus rides on government revenues?” “What would be the effect of all this on the environment?” “What could make metros profitable?” “Whose money was involved in funding metro projects?” “How link could be established between government policy and business economics?”