By IANS,
Hyderabad : L&T Metro Rail (Hyderabad) Ltd (L&TMRHL), a subsidiary of L&T Infrastructure Development Projects, Tuesday announced that it has achieved financial closure for the Rs.16,375 crore Hyderabad Metro rail project, described as the largest ever fund tie-up in India for a public-private partnership.
L&TMRHL chairman Y.M. Deosthalee told a news conference here that the financial closure for the 71-km elevated Metro rail project was achieved in a record six months.
The firm has tied up funds from a consortium of 10 banks led by State Bank of India for the project, which includes Rs.14,132 crore for the Metro rail system and Rs.2,243 crore for the first phase of real estate development.
The Metro rail system cost is being financed through an equity of Rs.2,768 crore (20 percent), debt of Rs.9,906 crore (70 percent) and government grant of Rs.1,458 crore (10 percent).
Since the government has already frozen the Metro rail project cost at Rs.12,132 crore and the viability gap funding (VGF) at Rs.1,458 crore, the balance portion of the increased cost is being funded through debt and equity by L&T.
The real estate (phase-I) cost of Rs.2,243 crore is being financed with an equity of Rs.671 crore (30 percent) and debt of Rs.1,572 crore (70 percent).
Deosthalee said the construction work would begin soon and the commercial operations is likely to begin in 2016. He was confident of the firm breaking even in three years from the commencement of commercial operations.
The concession agreement for the project was signed on Sep 4 last year. L&T, which bagged the project in July this year, formed special purpose vehicle L&TMRHL for developing the project on design, build, finance, operate and transfer basis.
The concession period is for 35 years, including five years’ construction, with a provision of extension for another 25 years.
L&T can undertake real estate development up to a maximum of 18.5 million square feet through utilisation of air space over the 269 acres of land earmarked for rail facilities like depots and parking and circulation areas at 25 select stations.
Under the first phase, the firm will develop six million square feet of space. Unlike Delhi and Bangalore Metro rail projects taken up by central and state governments with loans from Japanese bank JBIC, Hyderabad Metro rail is a financial innovation with VGF grant from the Indian government and cross subsidies by lease rentals from property development and advertisement rights. The developer can enjoy lease rentals during concession period but cannot sell the property.
“The developed property along with the rail system will revert to the state government at the end of the concession period,” said K. Venkatesh, senior vice president, L&T.
The firm expects 60 percent revenue from ridership while the remaining 40 percent will come from property development.
The biggest PPP contract in Metro sector in the world involves construction of 71.16 km of elevated Metro rail in three high density corridors – Miyapur-LB Nagar (28.87 km); JBS-Falaknuma (14.78 km) and Nagole-Shilparamam (27.51 km).
A total of 66 eco-friendly elevated Metro stations would be developed with passenger access through staircases, escalators and lifts. The Metro rail is expected to carry 14 lakh passengers per day when it is commissioned in 2016.
Every train will have three coaches, with capacity of 300 passengers each. Every train will have a capacity of 900.
“This can go up to 6 coaches with total capacity of 1,800 passengers,” Venkatesh said. Hyderabad Metro Rail managing director N.V.S. Reddy said the single largest investment in Andhra Pradesh would create 50,000 jobs – 5,000 technical and 45,000 non-technical.
He said the project would transform Hyderabad into a global city. The city and outskirts have a population of over nine million. The international airport, outer ring road and metro rail can sustain a three crore population, he added.