Hyderabad Metro Update

The Navabharat-led consortium has been recommended for the proposed Hyderabad Metro Rail project on the basis of their bids by an official committee. Surprisingly, the consortium did not seek any grant from the government for the project, which on the face of it, looks financially unviable. On the contrary, the consortium offered to pay Rs 30,311 crore to the exchequer during the concession period (34 years). A formal declaration awarding the Rs 12,132 crore project to the consortium, which includes Navabharat, city-based Maytas, Ital Thai of Thailand and IL&FS, to take up the purposed project under the public-private partnership (PPP) mode, has to be made after the state cabinet approves this recommendation made by a committee of officials.Most of the other bidders for the project sought viability gap funding for the heavily capital intensive project. The Reliance Infra-led consortium wanted Rs 2,811 crore grant from the government, while Essar-led consortium sought Rs 3,110 crore. The third Magna-led consortium too filed bids with ‘zero’ grants, but offered only Rs 250 crore. But public analysts thought that with the top bidder actually agreeing to give money to the government —instead of taking any— meant that it would become a real estate project from being a metro rail project. They pointed out that as per the bid of the lead consortium — which has been agreed to by the official commitee—they would be able to develop real estate in the 217 acres of the 269 acres earmarked for the project.The three-member committee, comprises principal secretary (Finance) N Ramesh Kumar, Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) managing director G Asok Kumar and HMRL managing director NVS Reddy. HMRL managing director NVS Reddy categorically said at a press conference that the committee chose Navabharat-led consortium because it would contribute Rs 30,311 crores to the government without seeking any grant. According to HMRL officials, the successful bidder will have to pay Rs 11 crore at the time of signing the agreement, Rs 50 crore on financial closure, Rs 200 crore in the fourth year (the year the project becomes operational), Rs 100 crore per annum from seventh to ninth year and Rs 1,750 crore per annum from 18th to the 34th year.The proposed project would have three corridors—Miyapur-L B Nagar, JBS-Falaknuma and Nagole-Shilparamam—with stations at every kilometre.“The successful bidder for the proposed project will be announced in the next 10 days after the cabinet approval,” the HMRL managing director said. The Hyderabad Metro Rail works are likely to be grounded in October.

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