On November 28, Prime Minister Narendra Modi is expected to launch the first passenger run of the much awaited Hyderabad Metro rail project. Billed as one of the largest such public -private -partnerships in the world and arguably one-of-its-kind project -- in terms of scale and size -- to be executed anywhere in the country, it is expected to transform the public transport infrastructure in the city. While the official confirmation is yet to be received by the metro rail authorities of the Prime Minister's programme, who is scheduled to be in the city on the 28th, the plan is to launch the train operations covering a 30 km distance in the 72 km network spread across the city. The project, originally estimated at around Rs 16,000 crore has been running into delays, largely on account of the time taken in property acquisition. It was originally expected to be ready in July this year but is now expected to be completed by end of next year (November 2018). While no official numbers are available at the moment, those tracking the Hyderabad Metro Rail project closely feel the cost estimated may eventually end up a couple of thousand crores, if not more, over the figure originally envisaged.
While it is billed as one of the largest PPPs in the world, it is not the only PPP in the metro rail space in India. For instance, there is one in Mumbai too between the state and Reliance but it is a much smaller project of around 10 km. The line that is to be inaugurated in Hyderabad is between Miyapur and Nagole, via Ameerpet, a total distance of around 30 km. The project is by Larsen &Toubro (L&T) though the viability gap funding has been provided by the state government. The metro rail authorities are yet to announce the fare chart but those in the know say the fares would be in tune with the charges levied elsewhere in the country in metro rail projects.
Larsen and Toubro was awarded the Hyderabad Metro Rail Project by the government of Andhra Pradesh. L&T incorporated a Special Purpose Vehicle - L&T Metro Rail (Hyderabad) Limited to implement the Project on Design, Built, Finance Operate and Transfer (DBFOT) basis. The company signed the concession agreement with the state government (then the united Andhra Pradesh) on September 4, 2010 and completed the financial closure for the project on March 1, 2011. A consortium of 10 banks led by the State Bank of India sanctioned the entire debt requirement of the project. This is the largest fund tie-up in India for a non-power infrastructure Public Private Partnership (PPP) project. The company - Metro Rail (Hyderabad) - is a subsidiary of L&T Infrastructure Development Projects Ltd., an infrastructure development arm of Larsen of Toubro Ltd. The project has huge ripple effect in terms of driving demand from suppliers. For instance, in May last year J. Michael McQuade, Senior Vice President for Science & Technology at United Technologies Corporation (UTC), the global major with business interests spanning from OTIS elevators to climate control and security to aerospace systems, told Business Today during his India visit that Hyderabad as a growing city was very important to UTC. "Some of the business wins we have had here are really quite important. The Hyderabad metro (rail) system for example. That is the largest elevator win we have had at the time it happened. The Hyderabad metro system for us is 670 escalators and elevators making it the largest single installation for a single project in India and the largest single order for us. It is worth around Rs 400 crore."