Larsen & Toubro (L&T), a leading Indian multinational conglomerate, has announced significant contract wins, including multiple grid infrastructure orders across India, the United Arab Emirates (UAE), and Oman. The company has secured a large contract valued between ₹25.00 billion to ₹50.00 billion, in addition to the previously announced grid infrastructure orders worth ₹25.00-50.00 billion.

Newly Announced Large Contract

L&T has secured a large contract valued between ₹25.00 billion to ₹50.00 billion. While the company has announced this significant contract win, specific details about the project scope, timeline, or client were not disclosed.

Grid Infrastructure Projects

Domestic Projects: Modernizing India's Power Distribution

In India, L&T will undertake the revamping of power distribution systems in two towns. The scope of work includes:

• Integration of SCADA (Supervisory Control and Data Acquisition) and smart technology
• Upgradation of distribution transformer stations
• Conversion of overhead electrical lines to underground cabling

These initiatives aim to enhance the efficiency and reliability of power distribution networks in the targeted areas.

International Ventures: Enhancing Grid Stability in the UAE and Oman

UAE: Advanced STATCOM Systems

L&T has secured a contract in the UAE for the design, delivery, and construction of two ±300 MVAr STATCOM (Static Synchronous Compensator) systems. These systems will be installed at existing 400 kV substations, offering several benefits:

• Dynamic reactive power compensation
• Automated and instantaneous response to system fluctuations
• Real-time injection or absorption of reactive power
• Improved power quality and voltage stabilization

Oman: New Grid Station and Transmission Line

In Oman, L&T will establish a new 400/132 kV grid station along with an associated 400 kV transmission line segment. This project will contribute to the expansion and strengthening of Oman's power infrastructure.

Strategic Importance and Future Outlook

These orders underscore L&T's commitment to building future-ready grid infrastructure that supports energy transition and sustainability goals. The company's expertise in delivering complex power projects positions it well in the evolving energy landscape.

Mr. Subramanian Narayan, Company Secretary & Compliance Officer of L&T, commented on the orders, stating, "These orders reinforce L&T's commitment to building future-ready grid infrastructure that supports energy transition and sustainability goals of its valued customers."

L&T's continued success in securing large-scale projects across multiple countries demonstrates its strong market position and technical capabilities in the power transmission and distribution sector. As countries focus on modernizing and stabilizing their power grids, L&T is well-positioned to capitalize on these opportunities and contribute to the development of robust energy infrastructure globally.

Larsen & Toubro (L&T), one of India's leading engineering and construction conglomerates, has formally requested to withdraw from the Hyderabad Metro Rail project, citing significant financial losses and lack of support from the Telangana government. This development marks a potential turning point for one of the country's largest public-private partnership (PPP) infrastructure projects.

Financial Strain and Government Support

L&T has approached Union Housing and Urban Affairs Minister Manohar Lal Khattar with a proposal to sell its substantial stake in the project. The company currently holds over 90% equity in the venture and has suggested the creation of a new Special Purpose Vehicle (SPV) to facilitate the transfer of ownership to either the state or central government.

The financial performance of L&T Metro Rail, the subsidiary overseeing the project, has been deteriorating:

This data reveals a 21% decline in revenue and a 13% increase in losses year-over-year, underscoring the project's financial challenges.

Multifaceted Challenges

L&T has outlined several structural, financial, and regulatory hurdles that have contributed to the project's difficulties:

1. Land Acquisition Delays: Prolonged processes in acquiring necessary land have impeded progress.
2. Alignment Changes: Modifications to the original plan have caused disruptions and increased costs.
3. Utility Shifting Issues: Complications in relocating utilities have further delayed construction.

These challenges have led to a significant escalation in claims for delays, rising from ₹3,756.00 crore in 2017 to approximately ₹5,000.00 crore by 2020.

Impact of COVID-19

The COVID-19 pandemic exacerbated the project's financial stress:

• A 169-day shutdown during the peak of the pandemic
• Reduced ridership due to widespread adoption of work-from-home arrangements

These factors have contributed to the weakening financial position of the metro project.

Future Expansion Plans

In light of its current financial situation, L&T has expressed its inability to participate in the proposed expansion plans for Phases II-A and II-B of the elevated rail corridor. This stance puts the future growth of the Hyderabad Metro system in question.

The potential exit of L&T from the Hyderabad Metro Rail project raises significant questions about the viability of large-scale PPP infrastructure projects in India. As stakeholders await the government's response to L&T's proposal, the outcome of this situation could have far-reaching implications for urban infrastructure development in the country.