L&T Hyderabad Metro Rail Private Limited

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On 6th August 2010,the Andhra Pradesh Government awarded a 35 year concession (including construction period of 5 years) to Larsen & Toubro Limited for building the 71.16 km elevated metro line covering three high density traffic corridors of Hyderabad in the state of Andhra Pradesh -(1) Miyapur-LB Nagar (28.87 km-27stations); (2) JBS-Falaknuma (14.78 km-16 stations); & (3) Nagole-Shilparamam (27.51 km-23 stations).The concession was extendable by an additional 25 years. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance of the Metro line. The Project will be well integrated with the exiting suburban railway network (MMTS) and bus stops so as to ensure seamless and comfortable travel for the passengers. Adequate Parking & Circulation areas adjoining the stations would be provided at 25 locations along the corridor. There would be 66 stations along the route at roughly every 1 km distance. The concession agreement allowed the right to develop 18.5million sq.ft. of Transit Oriented Development. The metro system being planned for the city can carry the same amount of traffic as 7 lanes of bus traffic or 25 lanes of private motor cars and is more reliable, comfortable and safer than road-based systems and will reduce journey time by anything between 50% to 75%. Once implemented, Hyderabad would be the first city in India with integrated urban planning with inter modal connectivity. The winning bidder, Larsen & Toubro Limited established L&T Hyderabad Metro Rail Private Limited, a Special Purpose Vehicle (SPV), to implement the project. L&T won the tender through international competitive bidding, conducted by the Andhra Government, by quoting the lowest subsidy requirement from the government of US$ 324 million (INR 14580mn @45 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through user fees during the term of concession. The Andhra Government had called for fresh global bids in late 2009 after scrapping the 2008-deal with Maytas in July 2009 as it failed to achieve financial close (post Satyam crisis). A three-member committee selected L&T from six companies that bid for the mega project. Eight consortia had qualified to file financial bids, including Essar- Leighton (Australia)-Gayatri-VNR consortium, GMR,GVK-Samsung (South Korea) consortium, L&T, Lanco-OHL (Spain),Reliance ADAG, Soma-Strabag (Austria) consortium, and Transstroy-OJSC (Russia)-CR 18 (China)-BEML consortium. Financial bids for the Project were opened on July 14, 2010 and following three pre-qualified bidders participated in the bids-(i) Larsen & Toubro Ltd -quoted a grant of INR 14580mn (12% of project cost); (ii)Transstroy India-OJSC Transstroy Russia-CR18G Consortium -quoted a grant of INR 22000mn (18% of project cost); and (iii)Reliance Infrastructure consortium - quoted a grant of INR 29910mn (25% of project cost).The Project was awarded to the successful lowest bidder M/s. Larsen & Toubro Limited at their quoted grant amount of INR 14580mn and LoA was issued to them on August 6, 2010. Parent L&T would provide the rolling stocks and would be the EPC contractor.The Conceptual Engineering is being undertaken by AECOM- Feedback Venture consortium.Louis Berger Consulting Pvt. Ltd. had been appointed by GoAP through Hyderabad Metro Rail Limited as the Independent Engineer for the Project. The Independent Engineer would oversee design and execution of the Project as laid down by the Concession agreement. The concession agreement was signed on 4th September 2010. The project attained financial closure on 5th April 2011. The estimated capital cost of the project was US$3639.5mn (INR 163780 mn @ 45 INR/USD) million. Financing comprises US$ 2551.1 million (INR 114800 mn @ 45 INR/USD) Rupee term loan, sponsor equity of US$ 764.4 million (INR 34400 mn @45 INR/USD) and a capital grant (or viability gap fund) of US$ 324million (INR