Hyderabad Metro update

The Andhra Pradesh government granted Rs 500 crore for the Hyderabad Metro Rail project and said Larsen & Toubro, the private promoter of the project, will begin ground works by January 2011. The state cabinet at its meeting on Wednesday formally awarded the Rs 12,132-crore metro rail project to L&T which won the bid. The company has sought a viability gap fund of Rs 1,458 crore from the government.
The cabinet meeting chaired by chief minister K Rosaiah approved the three-member expert committee’s recommendation to award the project to L&T. The development of elevated metro rail system is being done on a design, build, operate, finance and transfer (DBFOT) basis in the publicprivate partnership (PPP) mode. Announcing details of the cabinet meeting, information minister J Geeta Reddy said the cabinet had decided to release Rs 500 crore as first installment of the VGF in the current financial year to the company. She said the cabinet was apprised of the salient features of the draft concession agreement, which would govern the elevated metro rail project in three high density traffic corridors of Hyderabad viz., Miyapur-L B Nagar (28.87 km), JBS-Falaknuma (14.78 km) and Nagole-Shilparamam (27.51 km).
The viability gap fund would be released by the Government of India, while the state government would spend another Rs 1,980 crore for acquiring 204 acre of private land and carrying out relief and rehabilitation measures.
She said L&T would form a special purpose vehicle to implement the project and enter into a concession agreement with the government within a month after the Letter of Award. It would have to provide bank guarantee for Rs 360 crore as performance security and achieve financial closure within six months, the minister said. The ground works for the 70-km project would start in January 2011 and the project would be completed in five years, she added.
The traffic demand per day is estimated to be 15 lakh passengers in 2014 and 22 lakh in 2024, Metro Rail MD N V S Reddy said.