Larsen & Toubro Ltd., India’s biggest engineering company, will start drawing on loans worth 114.8 billion rupees ($2.1 billion) by “mid-November” as construction of a rail network in the southern city of Hyderabad picks up pace.
Delays in the project due to hold-ups in land acquisition stalled off-take of the money, comments V.B. Gadgil, managing director, L&T Metro Rail (Hyderabad) Ltd. Gadgil spoke in an interview in Hyderabad.
“We will start withdrawing the loans by the middle of this month for sure. Till now, L&T has invested roughly about 6 billion rupees to 6.5 billion rupees of its own funds. That’s a little more than what we had expected by around this time.
“Financial closure was done quite some time back. So the bankers needed to revalidate our proposal again, which has been done already. The first withdrawal would be anything around 5 billion rupees to 6 billion rupees. Our civil contractor payments are to be done. Rolling stock advances are to be given. Very soon, we would be giving the contract for signaling and telecommunication. All these vendors will need their payments.
“We had appraised our bankers with the difficulties we faced at the start of the project. They too understand the problems that come up during the execution of such large-sized projects and were ready to help.
“We expect to start operations on the first route by mid-2015. It would take another couple of years after that for all three tracks to become functional.”