Will get real estate construction rights over 18.5 million sq ft.

Larsen & Toubro (L&T), the engineering and construction conglomerate, has bagged the Rs 12,132-crore Hyderabad Metro Rail Project. The project would achieve financial closure in six months and take about four years for completion. It would be executed on a design, build, finance, operate and transfer (DBFOT) basis.

A three-member empowered committee, comprising the Hyderabad Metro Rail Ltd managing director, Hyderabad Metro Water Supply and Sewerage Board managing director and the state finance secretary, finalised the bids today. The committee, which had a mandate to select the bidder on the basis of the lowest grant sought, will give its recommendations to the government.

“We secured the Rs 12,132-crore metro rail project, but are yet to receive the Letter of Intent from the Andhra Pradesh government for the project. The financial closure for the project would take six months and the project would take four years or so, after financial closure, for completion,” said an L& T official. He declined to comment on the revenue model or disclose how much viability fund they had sought for the project.

Sources said L & T had asked for a Rs 1,458-crore viability gap funding (VGF), while Transstroy-OJSC (Russia) had sought Rs 2,200 crore and Reliance Rs 2,991 crore. The central and state governments together are willing to provide Rs 4,853 crore VGF (40 per cent of the total cost).

Ticket fares apart, the project would give the company real estate construction rights over 18.5 million sq ft.

L&T apart, Lanco-OHL (Spain), Reliance (Anil Dhirubhai Ambani group), Essar-Leighton (Australia)-Gayatri-VNR consortium, GVK-Samsung consortium, GMR, Transstroy-OJSC (Russia)-CR 18 9 (China)-BEML consortium and Soma-Strabag (Austria) consortium had pre-qualified for the project. GMR and GVK had indicated they would not bid for the project. Officials said only three bidders, including L&T, had given financial bids.

The project, initially bagged by Maytas Infra of Ramalinga Raju, the disgraced former chairman of Satyam Computers, ran into rough weather after Raju admitted to a multi-crore fraud in his information technology company. As Maytas failed to achieve financial closure after the Satyam scandal broke out, the government had invited fresh bids in July 2009. However, the selection process was marred by delays as the government extended the deadlines citing various reasons, including the unrest due to the demand for and against Telangana.

The three-corridor, 71.16-kilometre project would employ 5,000 engineers and 45,000 skilled and unskilled workers. Earlier, the government said the concession agreement could be extended by another 25 years after the first lease period of 25 years, excluding construction period.

Source: BS 15/7/10