By IANS,
Hyderabad : The concession agreement for the Hyderabad Metro rail project was Friday signed by the Andhra Pradesh government and Maytas Metro Rail Ltd, the concessionaire company to implement the project.
A Maytas-led consortium will build the modern rail system at an estimated cost of Rs.121.32 billion on build, operate and transfer (BOT) basis in public private partnership (PPP) mode.
B. Teja Raju, managing director, Maytas Metro, presented a cheque of Rs.110 million to Chief Minister Y.S. Rajasekhara Reddy as advance towards Rs.303.11 billion the BOT developer would pay to the state over the concession period of 35 years.
Maytas, a leading Hyderabad-based infrastructure development company, claimed it was the only project of its kind where the government started earning on the day when the conession agreement was signed.
The Maytas-led consortium will hold 52 percent and the state government 16 percent equity in the project. Within the consortium, Maytas will hold 26 percent, Navabharat 16 percent, Ital Thai (Thailand) 5 percent and IL&FS 5 percent.
“During construction and five years after commercial operation, they (consortium) will have to hold up to 52 percent of equity. Afterwards they can bring it down to 26 percent,” said N.V.S. Reddy, managing director, Hyderabad Metro Rail.
The metro rail system is expected to carry about 1.7 million passengers per day by 2012 and 2.8 million passengers by 2021.
The state government will be investing Rs.2.5 billion not exceeding 11 percent of the equity.
Teja Raju told reporters that the financial closure would be completed in six months. He expects the project to break even in the third year of operation.
Billed as one of the largest projects of its kind in the world and India’s first two-track elevated transit system, it is expected to be completed in four years.
The chief minister said work on the project would begin in March 2009.
The metro rail will run on three high traffic-density corridors with a total length of 71.16 km. It will have 66 railway stations.
The consortium is not taking any grant from the Indian government though it has sanctioned Rs.23.63 billion or 20 percent of the project cost under Viability Gap Funding (VGF) scheme. This is the first PPP metro rail project to be sanctioned in India.
The state government is giving 269 acres of land to BOT developer on lease and the company will make revenues through real estate development.
Said the chief minister: “This is a very good agreement. The central government is asking all other states to follow a similar model.”