The Hindu Business Line : Hyderabad Metro: What clinched it for Maytas consortium

The emergence of Maytas-Navabharat-Ital Thai (Thailand) and IL&FS as the lowest bidder for the prestigious Rs 11,814-crore Hyderabad Metro Rail project had raised many eyebrows.

This was not without any reason. The other three consortia (excluding GVK-led consortium that opted out of the bidding process) included global majors Siemens of Germany, Bombardier of Canada and Alstom of France. These three global majors have a role in about 90 per cent of the 130 odd metro projects in the world.

But what went in favour of the Maytas-Navabharat consortium that was short-listed as the lowest bidder?

Revenue to Govt

“The consortium has committed a whopping Rs 30,311 crore to the State Government thru the 34-year concession period,” Mr N.V.S. Reddy, Managing Director of Hyderabad Metro Rail Ltd, said.

This seemed to have played a major role for the consortium clinching the project, which seeks to construct an elevated metro rail covering 71 km.

Mr Reddy is among the three-member committee set up to short-list the bidders for the project. The other two members were Mr N. Ramesh Kumar (Principal Secretary, Finance) and Mr G. Asok Kumar, Managing Director of Hyderabad Metro Water utility.

Addressing a press conference here, Mr Reddy has said Magna Allmore-led consortium comprising Siemens (Germany, Emirates Trading Agency (Dubai) and Nagarjuna Constructions) offered to pay Rs 250 crore (that meets the State’s equity of 11 per cent in the project.)

Both the consortia had not sought any grant (though eligible) from the Government. On the other hand, the other two consortia (led by Reliance Infra and Essar) expected an assistance of Rs 2,811 crore and Rs 3,100 crore.

“The fact that we (the Govt) are getting money disproves the criticism that the Government was going for wasteful expenditure on building the elevated transport system,” he said.

The Navabharat consortium would pay Rs 11 crore on signing the pact (which is expected to happen in a week or two); Rs 50 crore on achieving financial closure (which should happen in six months; Rs 200 crore in the fourth year and Rs 1,750 crore from 18 to 34 years.

The Government, however, would take a final call on the recommendations made by the three-member committee.

Revenue model

Asked how the consortium would generate money to pay to the Government, he said income from ticket sales was just part of the story. “A lot of commercial activity would take place at the terminal points (100 acres each at Miyapur and Nagole; 17 acres at Falaknuma) and also the spaces abutting the 33 stations,” he said.

He stated that the city population, which stood at 7.7 million, was expected to touch 1.36 crore by 2021. “The city roads can’t handle the traffic pressure after a point. We need to have this alternative model ready,” he said.

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Hyderabad Metro: What clinched it for Maytas consortium