Exchange rate volatility not to hit Hyd metro: L&T

L&T Metro, the concessionaire of Hyderabad metro rail, today said the rupee depreciation would not have any major impact on the project cost.

Though the project has a heavy overseas technology component, including supply of rolling stock, major orders were signed on a condition of payment in Indian currency and all the contracts were finalised before the ongoing volatility in exchange rates set in, according to the company.

"For instance, the Rs 1,700-crore rolling stock contract had been signed in rupee terms so there is no impact of dollar appreciation on that front," VB Gadgil, chief executive and managing director of L&T Metro Rail, said.

However, a Rs 700-crore signal and telecommunication equipment order could be impacted as it requires more money to buy the same amount of dollars for payouts to the vendors, he added.

According to Gadgil, the increase in raw material prices, including steel and cement, continues to remain a cause for concern in addition to the manpower costs for the Rs 16,375-crore project, which was awarded to the company on a build, own, operate and transfer (BOOT) basis.The company has so far drawn about Rs 700 crore from the Rs 11,478-crore debt being tied up with a consortium of lenders led by State Bank of India.

The first phase will be opened for commuter traffic in March 2015.