Thaindian News

Hyderabad, April 5 (IANS) L&T; Metro Rail (Hyderabad) Ltd (L&TMRHL;) Tuesday announced that it had achieved financial closure for the Rs.16,375 crore Hyderabad metro rail project, described as the largest ever fund tie-up in India for a public private partnership.

L&TMRHL; Chairman Y.M. Deosethalee told a news conference here that the financial closure for the 71-km metro rail project was achieved in a record six months.

The firm has tied up funds from a consortium of 10 banks led by State Bank of India for the project, which includes Rs.14,132 crore for the metro rail system and Rs.2,243 crore for the first phase of real estate development.

The metro rail system cost is being financed through an equity of Rs.2,768 crore (20 percent), debt of Rs.9,906 crore (70 percent) and government grant of Rs.1,458 crore (10 percent).

Since the government has already frozen the metro rail project cost at Rs.12,132 crore and the viability gap funding (VGF) at Rs.1,458 crore, the balance portion of the increased cost is being funded through debt and equity by L&T.;

The real estate (phase-I) cost of Rs.2,243 crore is being financed with an equity of Rs.671 crore (30 percent) and debt of Rs.1,572 crore (70 percent).

Deosethalee said the construction work would begin soon and the commercial operations likely to begin in 2016. He was confident of the firm breaking-even in three years from the commencement of commercial operations.

The concession agreement for the project was signed on Sep 4 last year. L&T;, which bagged the project in July this year, formed special purpose vehicle L&TMRHL; for developing the project on design, build, finance, operate & transfer basis.

The concession period is for 35 years, including five years construction, with a provision of extension for another 25 years.

L&T; can undertake real estate development up to a maximum of 18.5 million square feet through utilisation of air space over the 269 acres of land earmarked for rail facilities.

It is one of the world’s largest metro rail projects and the largest one in PPP mode. The project covers three high density traffic corridors — Miyapur-LB Nagar (28.87 km); JBS-Falaknuma (14.78 km) and Nagole-Shilparamam (27.51 km).