Mumbai Metro - Phase II

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Mumbai Metro Transport Private Limited, the SPV set up to implement 32 km Charkop-Bandra-Mankhurd corridor metro project with 27 stations (Mumbai Metro - Phase II) on a build operate and transfer (BOT) basis in Mumbai. Project would be integrated with existing suburban railway network and Mumbai Metro Line I. The 32 km Mumbai Metro Line 2 project would provide a vital link between Navi Mumbai and the Western Suburbs, connecting Charkop in the North to Bandra and then to Mankhurd in the East. It was designed to be a fully elevated metro project with 27 stations along the route. Mumbai Metro Transport Private Limited, a SPV jointly incorporated by the consortium partners comprising Reliance Infrastructure Limited (48%), Reliance Communication Limited (26%) and SNC Lavalin Inc, Canada (26%). Mumbai Metropolitan Region Development Authority (MMRDA) awarded the project to Reliance Infrastructure Ltd (RIL)’s led consortium using a Public-Private Partnership (PPP) model and through a competitive tender in May 2009. The main bid criterion was the lowest Viability Gap Funding (VGF) requested. Reliance Infrastructure Ltd (RIL) requested INRs 22.98 billion (US$502.5 million) and was the sole bid. Six other firms were shortlisted by the MMRDA but none submitted their bids. Among the six were Pioneer Infratech Group with Mitsubishi and Tata Power, Reliance Industries group with Siemens and Gammon India and the Essar group with Alsthom and LANCO. The BOT concession was signed in January 2010. The project had a concession period of 35 years (from the financial closure) with an extension clause of another 10 years. As per the terms and condition of the agreement, the project was to receive a viability gap funding of INRs 22.98 billion (US$502.5 million) of which INR 15.32 billion (US$335 million) were to come from the Central government and INR7.66 billion (US$167.5 million) from MMRDA. Project cost was estimated to be INRs 115 billion (US$2,514.8 million). Financial closure was achieved in March 2011 with debt equity ratio of 73/27 when the project company secured the entire debt requirement of INRs 69,310 billion (US$1,530.7 million) with a 18 year loan. The rest of project cost was to be funded by a viability gap grant (US$502.5 million) from the central government and Maharashtra’s state government, and equity INR22.02 billion (US$481.5 million), primarily from Reliance Infrastructure Limited. The lead arrangers were Axis Bank and IDBI Bank Ltd. Among the participating financial institutions were IDBI Bank and Reliance Capital and its associates. Financial Closure achieved within the scheduled nine months of signing the Concession – Agreement. The RIL was all set to start construction work in December 2010 and the project would be commissioned in late 2015 or early 2016. Traffic forecast: 1.4 mn daily in initial year. With two metro projects in Mumbai (Mumbai Metro Lines 1 and 2), Reliance Infrastructure Limited would be committing almost INRs. 140 billion for the Mumbai metro sector only. The Company was earlier awarded the Mumbai Metro - Versova-Andheri-Ghatkopar corridor project which is at an advanced stage of completion.