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The Hindu
The Hindu
National
V. Geetanath

Govt’s ‘open offer’ to private firms for Airport Metro

The Telangana State government has reworked the financial model for the proposed ‘Airport Metro’ to Hyderabad International Airport at Shamshabad of about 30.7 km from Gachibowli to attract private infrastructure firms to build the project under the Public, Private Partnership (PPP) mode at an estimated cost of about ₹ 5,500 crore.

Hyderabad Metro Rail (HMR) Managing Director N.V.S. Reddy,also in charge of the Hyderabad Airport Metro Limited, the special purpose vehicle formed to take up the project, said that in the light of “changed economic scenario” it was decided to tweak the ‘Concessionnaire Agreement’ in vogue to offer much “better conditions” to anyone coming forward to invest and build the project.

“This is an open offer on behalf of the government to any private entity willing to invest in the next phase of metro rail project to airport. The government is ready to offer more concessions than what L&T Metro Rail Hyderabad (L&TMRH) got in building and operating the first phase of the project built across 69 km through three major traffic corridors of the twin cities,” he said, on Thursday.

The ‘hybrid annuity model’ being planned for the Airport Metro is to be eased further with the government offering to provide financial assistance not only during the construction of the project but also in the first 5-10 years of operations. “From the metro first phase experience, it was noticed that the concessionnaires face tremendous financial pressure during this period as these are large capital expenditure projects with returns over a long term. At the same time, we do not want to do away with the ‘risk’ element for the private player totally,” he informed.

If the average cost of the steel, cement and other construction material is taken into account (not the current super high rates), it is estimated that the metro second phase can be built at about ₹ 165 crore a kilometre from the usual ₹ 300 crore a kilometre cost likely for the kind of work done in the metro first phase, said Mr. Reddy.

This is possible by reducing height of the elevated structures and considering not much land acquisition will be required as the line will passing on the road median and later along the Outer Ring Road (ORR). “The precise details of the initial financing, annuity payments and others will be worked out at the bidding stage. It is a real challenge to build large infrastructure projects in the present scenario,” added the MD.

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