Delhi Airport Metro Link

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In January 2008, the Delhi Metro Rail Corporation Limited (DMRC) awarded a 30 year concession (including construction period) to a consortium of India’s Reliance Infrastructure and Spain's Construcciones y Auxiliar De Ferrocarriles, S A (CAF) for building the 22.7 km airport metro express line connecting New Delhi Railway STation at the heart of the capital city with the Delhi international airport. The airport link, will have five stations (New Delhi Railway Station, Shivaji Stadium, Dhaula Kuan Station, NH8 Station, and Dwarka) and the terminating station will be set up in international terminal 3 of the Delhi International Airport. The facility will be transferred back to DMRC at the end of the concession period. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance of the Metro link. The consortium will have to install all systems including rolling stock, overhead electrification, track, signalling and telecommunication, ventilation and air-conditioning, automatic fare collection, baggage check-in and handling, depot and other facilities for the 23 km rail link for 30 years. The trains that run on the Airport Express Line will be different from those on the other metro lines in that the Airport Express Line trains will have a cruising speed of 135 kmph. The metro line alignment will run underground, elevated and at-grade with five underground and one elevated stations. DMRC will handle the civil works for the project - involving construction of viaduct, underground tunneling works and construction of stations. The consortium of Reliance Infrastructure Limited of India and Construcciones y Auxiliar De Ferrocarriles, S A (CAF) of Spain, established Delhi Airport Metro Express Private Limited (DAMEPL), a Special Purpose Vehicle (SPV), to implement the project. Reliance Infrastructure has a 95% equity stake and Spanish firm CAF owns the rest 5%. The consortium was one of the final three bidders for the metro project, the other two being a consortium of Larsen & Toubro and GE Transportation US, and Siemens Transportation, German and Gammon India. Five consortias had initially showed interest in the project including Bombardier Canada and IL&FS India and a Malaysian company. The consortium won the tender through international competitive bidding, conducted by DMRC, by quoting the maximum revenue share with the Government. DAMEPL will pay DMRC US$ 10.53 million (INR 510 million @ 48.41 INR/USD) every year and also share between 1 to 5 percent of their gross revenue for 15 years. Under the contract, DAMEPL was to recover the capital costs and operating costs including returns through user fees during the term of concession. The revenue will mainly come from the tickets and retail activities at the station and advertisement and other commercial activities. Delhi Metro Rail Corporation (DMRC) has decided to keep the train fare at a maximum of US$ 3.1 (INR 150) till Delhi International Airport, and an extra US$ 0.62 (INR 30) to Dwarka. Traffic estimates are of the order of about 15000 commuters daily in initial year eventually increasing to about 45000 commuters daily. The concession was awarded in January 2008. The project attained financial closure on March 24th 2009. The estimated capital cost of the project was US$ 595.95 million (INR 28850 mn @ 48.41 INR/USD) million. Please note that this estimated project cost is the the cost of electrification, acquisition of rolling stock, and operational costs as per the concession agreement mentioned above(the cost of all civil works like construction of stations, tunnels and viaducts will be borne by the Centre and the Delhi government on a 50:50 ratio). Financing comprises a US$ 417.2 million (INR 20195 mn @ 48.41 INR/USD) 17.25-year term loan and US$ 178.8 million (INR 8655 mn @ 48.41 INR/USD) equity. Axis Bank was the sole lead arranger and bookrunner along with India Infrastructure Finance Co Ltd (IIFCL) and 8 other banks. Interest rate of 13.5% is about 50bp over the existing prime lending rate of indian banks. Only the ECB component provided by IIFCL is priced at 485bp over 6-month LIBOR. Construction on the project began in April 2008. More than 80% of civil work has been completed at the time of collection of this information and was expected to be completed by 2nd qurter 2011. Not clear from newspaper reports whether the INR 510 million payment and revenue share of 1-5 % for 15 years is the general condition as per the CA or it was the specific quote from Reliance consortium. Trying to verify from the company. Once verified, the investment figures may change.