Hyderabad Metro Rail Project is eyeing Rs 1000-crore German loan

A month since its launch, the Hyderabad Metro Rail project is still stabilising in its first phase of operation, but the management is already readying funds for further development. The management is close to a deal with the German development bank KfW for a loan of Rs 1,000 crore for urban rejuvenation alongside the metro rail project. “We are in talks with the German Development Bank KfW to raise about Rs 1,000 crore for the urban rejuvenation project, without a high interest burden, say less than 2%, and a long repayment period,” said NVS Reddy, MD, Hyderabad Metro Rail (HMRL).

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The initial negotiations are already through and a detailed project report (DPR) is expected to be ready soon. The funds will be used for the urban rejuvenation activities, which include setting up sidewalks, rails, FOBs and other amenities post the metro rail construction, Reddy added. FE had earlier reported that talks are also on with the Japan International Cooperation Agency (JICA) seeking official development assistance (ODA) for its second phase of expansion for another 100 kms. The initial phase of the 72-km elevated metro project, a 30 km long stretch with 24 stations, was launched on November 28, 2017. The remaining stretch of the project is expected to be commissioned by the end of next year. Being the largest metro rail project under the public-private partnership (PPP) model, Hyderabad Metro is hoping to break even by 2022. “Out of 250 metro rail projects in the world, only four are making money. The profitable metros are Singapore, Hong Kong, Tokyo and Taipei. While 50% of the revenue comes from passenger fare, 45% from property development and 5% from advertisements and others,” Reddy said. “It is too early to say about the traffic. Passenger figures are slowly growing and we expect it to stabilise in the next two months. On an average, one lakh passengers are travelling every day and we expect to break even after five years when the entire stretch is completed,” he added. Data indicates that about 32.25 lakh passengers have been transported by Hyderabad Metro and over 1.5 lakh smart cards have been issued till date.

“The smaller stations, which are in high-density areas, are seeing minimal crowds. This means that metro rail is not preferred for short-distance travel. It is yet to complete some core stretches where there is a lot of crowd,” said an observer. For a start, some observers say, the fares have to be lesser than current ones. L&T Metro Rail Hyderabad (LTMRHL) said that the fares will start from a minimum of Rs 10 for a distance of upto two kilometres and the maximum fare is `60 for a distance of more than 26 km. HMRL also has to fill in lot of shortcomings such as constructing parking bays, toilets, drinking water and other facilities to gather crowd, according to an observer. Technical glitches like faulty doors, signal issues and maintenance problems have led to delays in its daily services even to the extent of 20 minutes, at times. Apparently, the train timings are not regularly announced and a time-table is yet to be released. Larsen &Toubro was awarded the Hyderabad Metro Rail project by the government of Andhra Pradesh. LTMRHL, a special purpose vehicle (SPV), was formed to implement the Project on Design, Built, Finance Operate and Transfer (DBFOT) basis. The company signed the concession agreement with the erstwhile government of Andhra Pradesh in 2010 and completed the financial closure for the project in 2011. A consortium of 10 banks led by the State Bank of India has sanctioned the entire debt requirement for the project. This is the largest fund tie-up in India for a non-power infrastructure PPP project. The cost of the project at the time of signing of concessionaire agreement in 2010, was Rs 14,132 crore. About Rs 16,511 crore has been spent so far on project by LTMRHL and the Telangana government. On an average, `60 crore has been spent per station and Rs 250 crore for an interchange station.