Impact of metro on Hyderabad real estate

Hyderabad metro will be delayed due to land issues

The coming up of metro in Hyderabad will have a positive impact on all the micro markets consisting of the metro. It is predicted that the coming up of metro in Hyderabad will increase the property prices in areas having the metro routes. Also, after the completion and implementation of the outer ring road in Hyderabad, the real estate market of the city has increased along with the alignment of the outer ring road routes. Most of the areas have seen a significant increase in property prices double the times as compared earlier.

The impact of metro on property prices through various stages, i.e. three phases;

• The pre-construction phase: The pre-construction phase will witness a significant launch of projects in the metro connected areas.
• The under-construction phase: The under construction phase will witness a nominal increase of 2% in the metro connected areas with the increase in the launch of projects in peripheral areas.
• The post-construction phase: The post construction phase will see a significant increase in the property prices of about 25-30% in the areas connected to the metro routes in Hyderabad.

Link between the controversial metro development and the properties in Hyderabad.

The intact metro development in Hyderabad will be taken care by Larsen & Toubro, which is one of the most popular engineering firms. The Hyderabad metro rail project development will take some time as L&T prefers to have a re-look at the viability of the.141.3 billion ($2.8 billion) project because of hold-ups in acquiring land. Due to this the metro project in Hyderabad will be delayed further as well and L&T will require more amount of time. Also there is only 50% of the land along the 71.2-kilometre network which is acquired by the government of Andhra Pradesh.

Acquiring the land is one of the first steps which have to be taken in order to start the metro project. Due to a number of court appeals by the land holders against selling them, the metro project will be delayed to a greater extent. The Andhra Pradesh Government states that they are trying their best to get the land for metro development but are not sure about the timeline.

Apparently, the delays will be unavoidable as the lands have many issues. And if these issues aren’t resolved within a month the company will be unable to order railcars and other equipments because of uncertainty about the opening date. Also the company’s shares have declined by about 34% this year as compared to the Sensex drop of about 17%.

Further, L&T has also spent.4.5 billion of its own funds on the project, which also includes the engineering and studies. Perhaps, the company is yet to draw down the.114.8 billion, 15-year loan which it raised from local banks at 10.5% for the construction of this project.

The Hyderabad metro project planning:

The Hyderabad Metro Rail Limited (HMR) has appointed a Spanish consultancy firm, Eptisa Servicios de Ingenieria as consultants on safety matters related to the construction of metro. The firm named Eptisa Ingenieria quoted as Rs 1.30 crore for combined technical and financial scores. This firm was chosen by the HMR Tender Committee for Major Works headed by HMR managing director NVS Reddy in Hyderabad.

Eptisa Servicios de Ingenieria will transmit safety audit of the designs, drawings, design basis reports (DBRs) and other documents which will be prepared by the concessionaire, L&T Metro Rail Hyderabad Ltd (L&TMRHL) and their consultants. The preferred consultancy agency will also look after the safety aspects of the elevated viaduct, rail alignment, stations and other elevated structures and other components of the metro rail system. Further the development stages of the project and the recommendations by the consultant firm will be incorporated into the designs by L&TMRHL under the directions of incorporated into the designs by L&TMRHL; incorporated into the designs by L&TMRHL.

For further detailed information on the Hyderabad metro project follow the below link;

http://infrastructure.gov.in/pdf/5-Bidder/Hyderabad%20Metro%20Rail%20RFP.pdf