L&T Metro Rail (Hyderabad) Limited, the special purpose vehicle (SPV) incorporated to implement the Hyderabad Metro Project has achieved financial closure for the project. Achieved in six months, the financial closure is the largest fund tie-up in India for a PPP (public private partnership) project.
A consortium of banks led by State Bank of India has sanctioned the entire debt requirement of Rs.11,480 crore for the project. The equity component for the project, expected to be around Rs.3,440 crore, would be infused primarily by the L&T group. The project will get a viability gap grant of Rs.1,458 crore from the Central Government through the Andhra Pradesh Government.
A total of ten banks have participated in the funding for the project. Hyderabad Metro Project was announced by the Andhra Pradesh Government on PPP mode under the design, build, finance, operate and transfer (DBFOT) basis. L&T emerged the lowest bidder and signed the concession agreement through its SPV, L&T Metro Rail (Hyderabad) Limited, with the Andhra Pradesh Government in September 2010.
L&T Metro Rail (Hyderabad) had already submitted a performance guarantee for Rs.360 crore to the Andhra Pradesh Government and as per the provisions of concession agreement, construction will have to be completed in five years. The concession period for the project is 35 years (including five years of construction period) and is extendable by an additional 25 years.
The project involves construction of 71.16 km of elevated metro rail in three corridors criss-crossing the city of Hyderabad.
The project allows the right to develop 18.5 million sq. ft. of transit-oriented development and is also expected to trigger economic activity in and around the city and provide employment to about 50,000 people including 1,200-1,500 technical professionals during construction.
Pre-construction works for the project had already commenced with soil testing and topographical surveys having been completed in most locations The alignment of the corridors of the project is being finalised in a manner that the heritage structures of the city are least affected.
Louis Berger Consulting, a major U.S.-based consultancy company has been appointed as the independent engineer for the project.
