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| Implementation of Hyderabad Metro Rail project in ppp mode - Challenges and Issues |
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| Background: |
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| After weighing different options, GoAP decided to implement the Hyderabad Metro Rail project in ppp mode. Spread over three very busy traffic corridors of Hyderabad city, this 71 km elevated Metro Rail project is estimated to cost Rs. 9,696 crore and is scheduled to be implemented in four years after starting construction. The main challenge in this project is to allocate the risk evenly among Government, BOT developers and the lenders; and to balance the interests of users and the public in general vis-à-vis the profit motive of private sector. |
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| Issues and Challenges: |
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Implementation of a Metro Rail project in ppp mode is first of it's kind in the country. Such a massive Metro Rail project (71 km, costing about Rs. 12,000 crore and to be taken up in one go) has perhaps not been attempted in ppp mode anywhere so far. Either smaller Metro Rail projects or part implementation of such projects in ppp mode were attempted earlier. |
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Non-availability of the required documents was a major issue. Since no Model Concession Agreement (MCA) for a Metro Rail project is available in this country, a Draft Concession Agreement (DCA) was prepared under the guidance of Planning Commission over a period of one year. Several sessions were conducted with the pre-qualified bidders and some lending institutions to take their inputs into account, while preparing/fine tuning several clauses of DCA to enable a smooth Financial Close. |
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Preparation of a Manual of Specifications and Standards (MSS) for a Metro Rail project, again for the first time in the country, was another challenge. Transition from ‘input' based specifications to ‘output' oriented performance specifications took some time. Preparation of a “technology neutral” document, without losing focus on scope for innovation and technology development proved to be a daunting task. Several rounds of brain storming sessions with renowned rail and metro rail technology experts and the experts representing the bidders had to be conducted to prepare and finalise the MSS. |
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Land acquisition required for the project in the urban environment was another major challenge. To avoid any possible creation of hurdles/agitations by the affected private parties and certain vested interests, Government lands are being taken for development of stations, depots etc as far as possible. |
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Creation of the required Right of Way (RoW) by way of road widening posed innumerable problems. Close association with local Municipal Corporation (GHMC) and adoption of innovative strategies in terms of additional FSI and persuasive techniques helped completion of 80% of the required road widening for creation of RoW. |
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Preparation of the required legal framework in the form of adoption of The Andhra Pradesh Municipal Tramways (Construction, Operation & Maintenance) Ordinance 2008”, and that of Fare notification etc also took considerable time. |
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Metro Rail projects are normally not financially viable. Heavy capital and operational subsidies are extended to Metro Rail projects world over. Preparation of a financially viable and sustainable Metro Rail project was a major challenge. Effective utilization of the Viability Gap Funding (VGF) scheme and evolution of a mechanism to enable property development over the Metro Rail depots and other areas addressed this problem. |
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(N.V.S Reddy)
MD, HMR |
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