Financial closure for hyderabad metro in 6 months

Hyderabad: Unfazed by the current financial crisis, the $2.7-billion Hyderabad Metro rail project expects to achieve financial closure within six months and possibly start work early next year even before it reaches this landmark, according to the Managing Director of Hyderabad Metro Rail Ltd, Mr N.V.S. Reddy.

Speaking at the Indian School of Business, Mr Reddy said that the project has been innovatively financed without any Government support. This is being watched by other developers who are looking at replicating this model.

One of the underlying message is its ability to generate income by the commercial use of 269 acres of property along the course of three dense corridors in Hyderabad and stations dotting the network.

The Planning Commission has approved the project and is also keen to recommend this model for other metro projects in the country.

Of the 130 metro rail projects located across the world, barely five projects in South East Asia, including Hong Kong and Taipei, have been based on this model and are being very successfully run. Unlike the viability gap fund required to make such projects financially viable, the Hyderabad metro is self sustaining.

“What is interesting is that the developers (Maytas-led consortium) will pay Rs 30,000 crore to the Andhra Pradesh Government over a 35-year period. This is something which has enthused other cities and the Centre,” he said.

“While the Government has given a five-year period for execution of all three corridors, our own internal assessment is that we will be able to complete this within three to three and a half years as most of the land acquisition along the routes has already been completed,” he said.

Due to the land given to developers, it may appear that it is a giveaway. In fact, adequate safety mechanisms are built into the agreements and unless they complete the work on the rail project, they cannot use it for commercial purposes, he said.

Asked about the proposed case against remarks made by the Metro Consultant, Dr E. Sridharan, and the State Government decision to file a defamation case, Mr Reddy said they are working on it and it will take some more time.