Opportunities and Challenges

A Soundararajan L&T Metro

Hyderabad

- City of pearls

- Hub of IT, ITES and Biopharmaceutical

- 4th largest city in terms of Area

- 6th most populous city (90 + Lakh )

- Infrastructure Development -

struggling to keep pace with the

economic growth

“ Economic Development of any city is linked to its Transportation infrastructure - Positive Multiplier effect - Additional investments, more employment “

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Hyderabad Traffic Scenario

Traffic is growing 4 times faster

than the population

Heavy traffic volumes in major corridors

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MIXED TRAFFIC

Heterogeneous traffic- Average

speed as low as 12 kmph in peak hrs.

Avg. 750-1000 new vehicles

added every day

TRAFFIC GRID LOCK- OLIPHANTA, SECUNDERABAD

Hyderabad Traffic Scenario

Overcrowding of Public Transport

Public Transportation Scenario

• 9 million people travel daily by Public Transport (about 60% by PT)• Suburban rail traffic increased by 6 times while the capacity increased by

only 2.3 times.• 2 - 3 times passengers travel per train against the carrying capacity resulting

in unbearable overcrowding.4

Metro Rail in Hyderabad

“A significant step towards Transportation developmentIn Hyderabad ” 5

GOVT

Concessionaire (SPV)

Financial Institutions

Commuters

EPC + System contracts

Owner(s) + Golden share for

Government

Operating sub-contractors

Grant/PremiumLong term

Concession contractDebt (Senior/

/Mezzanine/Subordinate) Ticket and Parking

Fee

EquityEPC Contracts

O&M contract

Financing Agreements

Share holders Agreement

Other users

Rentals, advertising fee etc.

- Hyderabad Metro Project being executed on PPP basis- Risk Sharing between

- GoAP (Land, ROW, Utilities, Viability grant)- Concessionaire (Design, Build, Finance, operate and Maintain)

Typical Framework for PPP Projects

Hyderabad Metro project under PPP model

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Concession Design Build Finance Operate Transfer Model

Lowest Viability Gap Funding – Evaluation Parameter Concession Period - 35 Years + extendable by 25 years Construction Period - 5 Years for all lines

Golden Share to be given to Govt. & one Board Membership

Concessionaire L&T Metro Rail (Hyderabad ) Limited L&T Group company

Concessioning Authority

Government of Andhra Pradesh through - Hyderabad Metro Rail Limited

Project Structure

Issue of LOI(06.08.10)

Signing of Concession Agreement (04.09.10)

Appointed Date(CP Completion date)

COD for all lines – 5 years

End of Concession Period

30 days

Concession period : 35 years + 25 years

Construction period Operation PeriodDevelopment Period

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Nagole – Shilparamam (27.51km)

JBS – Falaknuma (14.78 km)

Miyapur – LB Nagar (28.87) km

Double Elevated Stretches

LB Nagar

Nagole

JBS

Falaknuma

Miyapur

Shilparamam

Panjgutta

Malakpet

Narayanguda

Mettuguda

Intra-Modal Interchange

Inter-Modal Interchange - MMTS / Bus Station

To Bangalore

To Pune

To Nagpur

To Vijaywada

Ameerpet

MG Bus Stand

Parade Ground

• Line 1: Miyapur – LB Nagar (28.87) km

• Connects the outskirts of Hyderabad to the upcoming development in Miyapur- 27 stations

• Line 2 : JBS – Falaknuma (14.78) km

• Passes through the old & congested city of Hyderabad – 16 stations• Line 3:Nagole –

Shilparamam(27.51 km)• Connects undeveloped outskirts of

Hyderabad to the important areas of Banjara Hills, Jubilee Hills, HITEC City – 23 stations

Hitec City

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2

3

Length of Viaduct – 71.6 kmNo.of Stations – 66

No.of Depots - 3

Transit Oriented Development- Depot Land: 212 acres - Parking and Circulation area: 57 acres in 25 land parcels around the stations

Area to be developed:18.5 M Sft

Within Station: commercial development - 20% of floor area of station building

- Advertisement, Parking, Carbon credits

Snapshot of the Project

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Civil – Viaduct

Viaduct (71.16 Km)

Stations and Real Estate Dev.

- Stations (66 nos)- Transit Oriented Development (18.5 m sq ft)

P Way and Electrical

-Ballast less Track Traction-Substation – Traction/AuxPower Supply

Signaling, Train Control & Telecom

Signaling & Communication systems

Rolling stock

Cars / Maintenance Vehicle

Depot

Civil WorksE&M

AFC

Automatic Fare Collection

Project Scope

Transit Oriented Development, Operation and Maintenance : By SPV 9

Detailed Design Consultants

Independent Engineer: Louis Berger, USA (Jointly by HMRL+L&T MRHL)

Programme Manager

Owner’s Engineer

Consultants – World Class Experts

Line 1 Line 2 Line 3

Viaduct

Stations

Independent Safety and RAM Assessor

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Financial Closure

Surveys ( Topographical and Geotechical)

Funds tied up within stipulated time Largest fund tie-up in Infrastructure Sector, in a

record period of 6 months

Topographical: Completed Geotechnical: Completed. Part of Line 2 - will

be done at the final pier locations

Current Status

Engineering Conceptual Design Completed Technical Specification Prepared Alignment finalized for Lines 1 & 3 Detailed Design in progress

Corporate office inaugurated at 4th Floor, Cyber Towers , Hyderabad on 11th Feb’11

3 Independent Directors inducted

Procurement L&T – Major Contractor Subcontractors for major Systems under

finalization

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ROW and Land Status

Pre-Construction

More than 50% of the Land made available (total Land: 269 acres)

ROW : demolitions of buildings commenced

Over-ground Utilities: Identification : Completed for majority of route Diversion: In Progress

Underground Utilities Identification in progress

Current Status

Construction Works

Work on Casting yard Commenced

Depot Earth filling ON

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Challenges – Pre Construction Utility Diversions

Underground Utilities - No readily available plans. Lot of Surprises in store ?– To wait & see

Government Machinery involvement key Proactive approach of Government required Requirement of Central Nodal Agency

Railway Approvals Long drawn process of approval:

Support of GoAP and MoR/SCR Hyderabad: 8no. crossings, proactive approach resulted in 6no. Crossings – in principle approval. Balance 2no. expected shortly. 13

Challenges - Land , ROW and Alignment finalization

Land- Private Acquisition difficult- Time consuming process- Risk for Concessionaire if it commences construction before availability of complete land parcel

ROW- Requirement of Continuous ROW- 22 mtrs of Construction ROW required (8mtrs Barricading + 2 lanes

on both sides)- ROW of desired width not available at some locations

Alignment Finalization- Limitation on sharp curves (< 130 m)- Leads to structures getting affected at Curves

- Building demolitions and R&R take time

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Challenges – Design and System Integration• Design

- Design Reworks• Too many Stakeholders• Lack of Standardization in Metro Sector• Uncertain ground features

- Limited Design Experts

• System Integration

- Involves Complex system integration• Skill set nascent in the country• Huge Demand of Metro Experts in country

• Multiple metro project are in progress in India

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Challenges - Construction

Traffic Management Limited width of ROW (only 8% of lands in Hyd. under Roads) RoW -8m width for barrication & 22 m wide RoW for construction Long periods of barricading(peak time 20 to 25 kms of barrication in city)• Mitigation Measures

• Predominately Precast Construction Methodology adopted• Training of Traffic marshals ON.• Working with GoAP to expand the roads along alignment

Logistics- Project will require transportation of

• Raw material(Steel, cement, sand, aggregate) to precast yard• Precast segments to site location• Transportation of various plants & machinery, rail systems to Site

In the peak period , about 3000 trips per day estimated Mitigation Measures

Appropriate routes being identified Transport network optimization being worked out

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Challenges – Human Resource

Resource Mobilization• Direct Labor for Civil work -15000 to 20000• Staff: 1000-1200 technical executives

High demand for Skilled resources Adequate training to be provided

Ramping up of Human resources in a short period - a challenge

Multi cultural, region staff

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Challenges – Financial

Financial Challenges

• Volatile Financial Market• Interest during the construction• Foreign Exchange exposure

• Escalation

• Viability and challenges for Metro Rail can be supported as • Concession in Real Estate• Other Source of Revenue• Viability Grant

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Opportunities

• Accelerated city development• Faster, Safer and Economical means of transport• Economic Multiplier effect• Multi modal transport facility

• Generate Employment• High Impact on environment

• Mode of Transport % age contribution to CO2 emission Metro Rail - 2.4%

Road - 86.1%Air - 11.1%Water - 0.4% Source: UITP

Publication

• Installation Of Low GHG Emitting Rolling Stock In Metro SystemUNFCCC registration process commenced

(1) Modal Shift (2) Regenerative Braking Registration

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• Concession Agreement • Termination due to Concessionaire’s default during Construction period• Appointed Date 6 months – too short• Construction related permits before Appointed Date: Stipulation to be removed/

modified • Shortfall between TPC of Authority & TPC of Concessionaire • Separate Escrow Provisions for Metro and Escrow Account• Tax and Duty exemption• Golden Share

• ROW and Land shall be procured before the Bid

• Railway approvals shall be in place before the Bid

• Additional revenue earners - Viability improvement• Annuity / Grant / Property Development / Other innovative supports• Additional lines for operations

WILL LEAD TO MORE INVESTMENT FROM PRIVATE SECTOR

Suggestions for Improvement (CA)

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THANK YOU

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