ERM PROJECT
HYDERABAD METRO RAIL
VAIBHAV
Hyderabad –Overview and need of Metro
Hyderabad –the state Capital of Telangana
(Centrally located on the top of Deccan Plateau- with varying elevations ranging from
460m to 560m from mean sea level)
Mega city covering 625 sqkm of municipal area and population of 11.8 million
Only 43% of the total motorized trips are made by Public transport system and the
rest are done by the personal vehicles leading to traffic jams and high pollution level.
In this huge congested city there is no chance of widening of roads.
Based on the PHPDT (peak hour peak direction traffic) Metro rail was selected for
Hyderabad. Metro rail has the capacity to carry 30,000 passengers PHPDT.
Environment friendly, Safe, convenient and cheap mode of transport
Route Map
Hyderabad
Metro -Scope
Hyderabad Metro project used advanced resources and technology for
station planning, rolling stock, track work, signaling and train control
system, power supply, depots, AFC and traction and SCADA system
Hyderabad Metro-Initial phase
To construct elevated Metro Rail System in three high density traffic corridors of
Hyderabad, the government of Telangana and Municipal Administration and
Urban Development Department formed an organization Hyderabad Metro Rail
on DBFOT basis in PPP mode.
The consortium of Mayatas Infrastructure, the real estate company of the Satyam
group, was selected in July 2009 as the successful bidder. However, it was
terminated as B. Ramalinga Raju of Satyam computer services ltd. ran into
financial fraud controversy.
L&T won the re-bid to build the Metro rail network in July 2010 and incorporated
a Special Purpose Vehicle (SPV), L & T Metro Rail (Hyderabad) Limited (LTMRHL)
to implement the Project.
Rationale for Public Private
Partnership (PPP)
Tap Private sector efficiency and to
address
Resource gaps of Government
Hard Budget constraints
Limited Organizational capacities.
PPP
Framework for
Hyderabad Metro
Risk definition in PPP
Risk: Chance of an event occurring that would cause the project circumstances to differ from those
assumed while forecasting the cost and benefits of the project.
Principles of Risk Management in PPP Project:
• Risks are to be allocated so that it is borne in an agreed upon fashion
• Risks are generally allocated through legal institutions and instruments – partly through statutes and other
legal regulations and partly through the negotiation of the legal agreements that comprise the Project
Normally the Public sector is expected to bear the Risks that are within the control of the government such
as Change in law, Land Acquisition, obtaining statutory permits and clearances, Change of Government,
Force Majeure in the nature of Nationalization
The Private sector is normally expected to absorb the Design, Construction , O&M , Revenue/Demand risks
Lenders normally take the credit risk
Project and funding
requirements
The HMR project is the world’s largest project under
Public Private Partnership, with investment of over
Rs17000 crores.
Partnership (PPP) involves a contract between a public
sector authority (Concessioning Authority) and a private
party (Concessionaire).
The sources of funds for a PPP project include private
capital (loans), government (both state and central govt.)
funding a unique package by way of VGF (Viability Gap
Funding) equity of 30% of the total project cost as capital
to meet the funding gap, other funding sources include
property/real estate development on state/central
government’s property granted for long term lease to
developers.
A consortium of 10 banks led by State Bank Of India
sanctioned the entire debt requirement of the project.
ROI Estimation
55% of revenue from passenger fares
40% from property development in the TOD land given by the
Government and leasing
5% from miscellaneous sources such as advertisements and
parking charges for the duration of the concession period.
TOD built around 3-4 locations by way of multiplexes, business
hubs, social spaces in the MRT Route and covering over 18.5 mil
sq feet and 12.5 mil at the 6 terminals and 6 mil sq feet at the
stations (concourse at each station also for Commercial
establishments),
Stations and terminals becoming hub of a range of activities will
also make off peak transit profitable for the Metro Rail.
Project Risk Analysis
Appointed date of Concessionaire shifted by
490 days (3rd March 2011 to 5th July 2012).
Entire metro project of 72 km was to
complete in 5 years i.e. by 2017; however, the
project is currently under construction and is
expected to go beyond 2019.
High Risk for Concessionaire as their ROI is
dependent primarily upon real estates which
is volatile and affected by multiple
conditions.
Time overruns escalating cost overruns.
Project Risk Analysis- Detailed
Issues: Political
Bifurcation of state
Change of Government and delayed decision making
Political interference for design change
Issues: Cultural
Sensitive religious structures
Issues: Social
Agitation and pressure for Design and alignment change
Project Risk Analysis- Detailed
Issues- Investment: High for technology and construction complexity
L&T already invested about 9,000 in 16,375 crore but among these investments the
value of equity costs 2,700 crore and VGF gave 600 crore and the rest amount is in the debt
account. The investment hurdles have been crossed in most of the cases however, the delay and
cost escalation affects the final delivery of the metro rail project.
Issues- Process:
DPR lacked technical detailing and project planning necessary for a PPP initiative.
Inadaequate Geo-technical particulars
Alignment not finalized, Utility mapping not done exhaustively
Non Approval of other authorities at least on concepts (e.g. Span arrangement and
alignment across Indian Railway ROW)
Non Finalization of feeding grid substations and location of Main Sub stations
Project Risk Analysis- Detailed
Issues –Departmental coordination
• Significant delays in Right of Way (ROW) availability
• Frequent changes in vertical and horizontal alignment to suit local needs
• Road widening not taken up-– Inadequate work fronts
• Changes in location of transit oriented development – with consequential
impact on revenues
Project Risk Analysis- Detailed
Issues- Legal
Bid under a state statute viz. AP Municipal Tramway (Construction, Operation and Maintenance) Act 2010
• Migration to the Central (Federal Statute) viz. Metro Railway (Construction of Works) Act 1978 and Metro Railway
(Operations and Maintenance) Act 2002
• Pending clearances. Safety clearances under which act and relevant safety authorities.
• Lack of clarity on the code for safety applicable
• Who will issue the Safety certificate? – Metro Railway or Tramway
• Who will own the Metro System ? – HMRL or L&T
Hurdles in Land acquisition and properties.
Project Risk Analysis- Detailed
Issues- Technical
cascading effects like alteration of design and drawings of Structures, Permanent
way, OHE and ATP/ATO programing of S&TC
Possibilities of issues like SOD infringements – viz. curves become sharper
Unknown surprises like special spans
Project Risk Analysis- Detailed
Issue- Inadequate Planning for parking and connectivity
Large crowds of people are seen waiting on the road (Parade ground and
Ameerpet station) for autorickshaws or buses.
The situation at the Parade Grounds station is particularly worrisome as buses stop
near the pavement to allow people to board and alight while there is a traffic signal
close by. This leads to major traffic jams at the junction from where vehicles move
towards either the Secunderabad Clock Tower or Marredpally.
HMRL is in talks with the state transport authorities to launch a bus service. Cab
companies will also be allowed to set up kiosks at the Metro Rail station to make
it easier for people to reach their destinations.
Possible Significant Environment Impacts in the case of Hyderabad Metro
Risk Mapping
Frequency Category Severity Category
I II III
MACRO MESO MICRO
A Frequent IN IN IN
Land Acquisition
Time Delay
Cost Overrun
B Probable IN IN UN
Political Risk Legal
Process Pending clearances
C Occasional IN UN UN
Decision Making and coordination Revenue
Cultural
Social
Planning-Parking and connectivity
D Remote UN UN AC
E Improbable UN AC AC
Investment Technological Risk
Manpower
F Incredible AC AC AC
AC
Mitigations-Government initiative
The ‘Telangana State Industrial Project Approval and Self-Certification System’ (TS-iPASS) Act as
single window system to enable ease of doing business and create a business-friendly environment
that will uplift Hyderabad’s status as an investment destination.
Fast-Paced Infrastructure Developments
Presence of Blue-Chip and Multinational Companies
Affordable Property Prices
A 2017 report revealed that when the real estate market across the country was reeling under the
effects of demonetization and the Goods and Services Tax (GST), Hyderabad saw an increase in sales,
as well as new launches of residential units. In just two years’ time, properties in areas like Kondapur,
Gachibowli, and Hitech City have seen a price appreciation of 5% to 10%. Industry analysts are of the
opinion that the state government of Telangana’s infrastructure push will continue to drive
Hyderabad real estate market, which is expected to post a year-on-year appreciation of at least 10%.
Real Estate
returns
Key suggestions (MCS)
Detailed project preparation including finalizing alignment and mapping utilities.
Outcome
100% ROW & Land Acquisition to be completed(including depot area) prior to
commencement of bid. Behavioural
Obtaining special permits viz. Environmental clearances, Clearances for structures
covered by Ancient monuments and archaeological sites as applicable before bidding.
Behavioural.
Broad Construction Plan as part of bid documents and Agreement with Railways for
RoW & Drawings Approval Outcome
Discussions with the local leaders and addressing their sentiments. Value
An Urban Transit Authority for regulation and intermodal integration. Behavioural
Thanks
Extra
The issues were either land acquisition, legal tangles, topography or political ones. For
instance, metro line piers were supposed to have been built inside Osmania University
at Tarnaka with the University College of Arts & Social Sciences station design
resembling the college building and an exclusive skywalk to it under Corridor Three
from Nagole to Hi-Tec City/Raidurg. It could not happen as separate statehood
agitation was on its peak.
Similarly, for Corridor Two from Jubilee Bus Station to MGBS, Imlibun, the plan was to
build piers inside the University College for Women at Koti and an overhead station
with an exclusive skywalk into the college for students.
But the political climate was too charged up to take it forward, so had to build piers
on the main road crunching the space for vehicular traffic
