[sustran] Re: Hyderabad to get 71-km metro 'free of cost'

[Walter Hook]

Before declaring this a 'success' it would be good to wait and see the
system built and operational, and how much it costs the government. 

We know the routes proposed pretty well, and we have done an analysis of
this system, and it is not possible to finance through private sector
financing.  If the fare is too high, people will continue to use motorcycles
and three wheelers, so demand elasticity is very high. 

The government will end up paying the bill one way or another.  Perhaps they
will have to provide demand guarantees, or loan guarantees, perhaps they are
going to provide big chunks of government land or something. 

Lets see.   The routes may have been modified somewhat but our analysis of
the metro option in Hyderabad is still on our web site: 

http://www.itdp.org/index.php/information_center/document_detail/pre_feasibi
lity_brt_hyderabad/

best
walter 



-----Original Message-----
From: sustran-discuss-bounces+whook=itdp.org at list.jca.apc.org
[mailto:sustran-discuss-bounces+whook=itdp.org at list.jca.apc.org] On Behalf
Of Sudhir
Sent: Sunday, August 17, 2008 10:49 PM
To: Global 'South' Sustainable Transport; NewMobilityCafe at yahoogroups.com
Subject: [sustran] Hyderabad to get 71-km metro 'free of cost'

Dear All,

Please have a look at one more Metro News from India.

Does anyone have an idea about the routes planned?  free of cost????

http://www.business-standard.com/india/storypage.php?autono=330835


*Hyderabad to get 71-km metro 'free of cost'*
**

Delhi's 65-km metro cost the state and central governments Rs 10,500 crore.
In comparison, Hyderabad is about to get a 71-km metro without the central
or state government paying a rupee. Instead, the Andhra Pradesh government
will receive Rs 1,240 crore (calculated at present value) by simply giving
the concession to a private consortium.

The state cabinet approved the concession agreement and the winning bid at
its meeting in Hyderabad earlier this week. The winning consortium is led by
the city's Satyam group, which has so far focused on its software business.

This dramatic bid result was so unexpected that the bid documents had not
even considered the possibility of the government being the net financial
gainer. Instead, the central government had expected to fork out about 20
per cent of the project cost of Rs 12,410 crore as a capital subsidy, with
the possibility of a further 10 per cent funding from the Jawaharlal Nehru
Urban Renewal Mission. The state government, in turn, had been prepared to
fork out about 10 per cent of the project cost.

The combined saving for the Centre and state is, therefore, about Rs 4,800
crore or more, over and above which the state government will now receive Rs
30,300 crore from the concessionaires over the life of the concession.
Discounted (at 13.5 per cent a year) to get its present value, that money is
worth Rs 1,240 crore today.

Officials who have steered the project argue that the Hyderabad experience
opens up a completely new way of building metro services in the big cities,
at zero cost to governments and city administrations.

In contrast, Bangalore's 42-km metro is a state-funded project costing Rs
6,500 crore. Mumbai has given the contract for the 11-km first phase of its
metro project (costing Rs 2,356 crore) to a consortium led by the Reliance
Anil Ambani group, with a government-paid capital subsidy of Rs 650 crore.

Five consortia had been shortlisted for the Hyderabad metro concession,
which is to run for 35 years, with a possible extension by another 25 years.
Of these, a GVK-led consortium did not bid finally.

An Essar-Alsthom consortium asked for a subsidy from the government of Rs
3,100 crore, while a Reliance Energy-Bombardier consortium wanted Rs 2,811
crore. The bid that came closest to the one by Satyam was from a
Malaysian-led group which included Siemens and Nagarjuna, which had offered
to pay the government Rs 151 crore.

The tariff has been set at Rs 8 to Rs 20. The tariff on the Delhi Metro for
comparable distances is Rs 6 to Rs 22.

The project team that is celebrating its success now was led by NVS Reddy, a
railway accounts service officer in Hyderabad, while the political
leadership was provided by the Andhra Pradesh chief minister, YS Rajshekhar
Reddy. In Delhi, the mentoring with regard to the concession agreement and
the specifications manual was provided by Gajendra Haldea of the Planning
Commission.

Based on the success of the Hyderabad model, Planning Commission Deputy
Chairman Montek Singh Ahluwalia is understood to have written to the Prime
Minister, suggesting that this be the model followed for other metro
projects-a view that is apparently being opposed by the Ministry of Urban
Development, which prefers the Delhi metro model.

-- 
Sudhir Gota
Transport Specialist
CAI-Asia Center
Unit 3510, 35th Floor, Robinsons-Equitable Tower,
ADB Avenue, Ortigas Center, Pasig City
Metro Manila, Philippines 1605
Tel: +63-2-395-2843
Fax: +63-2-395-2846
http://www.cleanairnet.org/caiasia
Skype : sudhirgota
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