Our Bureau

Hyderabad, July 16

L&T Ltd., which has bagged the Rs 12,132 crore Hyderabad metro rail project by seeking the lowest viability gap fund (VGF), will be handed over 269 acres of land earmarked for the project when the contract was initially awarded to Maytas Infra Ltd. in 2008.

The State Cabinet, which met here today, after a thorough review of the project, decided to acquire the land all by itself and then hand over the possession to L&T to facilitate its developing and use for the metro rail project.

As against 40 per cent of the project cost cap for the metro rail project, with 20 per cent contribution from Centre and State, the L&T's aggressive bid seeking merely 12 per cent VGF of Rs1,458 crore, has clinched the deal in its favour.

The Union Urban Ministry's recent approval to treat Hyderabad metro rail project as an ‘ongoing project' has helped it garner a VGF allocation with a cap of Rs 2,363 crore, working out to 20 per cent of the project cost.

The Government has set apart 61 acres of land along three major road corridors for the development of the project.

This will be supplemented by a 104 acre block sites at Miyapur and Nagole respectively, which are terminal stations for two vital stretches. These two blocks of land will be acquired from private owners in the course of the project implementation, sources said.

The State Cabinet took on record the L&T's offer being listed L1 in the financial bid stage.

Once the technical committee screens all the documents, it will be formally approved by the Cabinet in the next meeting.

As against L&T's 12 per cent VGF claim, Transstroy India consortium sought 18 per cent of the project cost and Reliance Infrastructure (ADGAD) consortium 25 per cent.

The Government decided that the developer will be given six months to achieve financial closure for the project and commence the work by January 2011.

While the developer will be given five years to complete all the three stretches of 71 km, the Government is keen that the project is completed within four years.

The previous concessionaire awarded to Maytas Infra was terminated by the State Government in July 2009, as the company failed to raise funds for the project in site of time extensions.

(This article was published in the Business Line print edition dated July 17, 2010)
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