The Hindu : Front Page : Maytas-led consortia may bag Metro project

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Thursday, Jul 24, 2008
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Maytas-led consortia may bag Metro project

HYDERABAD: Maytas Infra and Navabharat Ventures, two city-based firms which formed a consortia with two others, are likely to bag the prestigious order to build and operate the prestigious Hyderabad Metro Rail system. But, inexplicably neither the Government nor Hyderabad Metro Rail Limited officials made any formal announcement.

“We are still looking into the legal aspects of the financial bid,” said HMR Managing Director N.V.S. Reddy late on Wednesday evening, declining to make any comment.

The two local firms along with Ital Thai and IL&FS turned out to be the lowest bidder for the now Rs. 12,000-odd crore elevated rail system to be constructed on three corridors of 71.16 km and chose not to seek any grant from the Government as Viability Gap Funding (VGF).

Quick action

Both companies did not waste time in sending a formal communiqué to the stock exchanges about being the lowest bidder and that they were awaiting a formal letter of approval.

Interestingly, another consortia led by Magna Allmore (Malaysia), Siemens, Emirates Trading Agency and Nagarjuna Constructions too did not want a single pie from VGF being offered to the tune of Rs. 4,800 crore or 40 per cent funding.

Another local firm – GVK -- in association with Gammon, Alstom (France) and IDFC preferred to opt out of the financial bidding as it was said to have felt that the project was not viable. Five consortia had earlier cleared the technical bids.

Two other consortia – one led by Reliance Energy (Anil Ambani group), Bombardier (Canada) and Essar Constructions, SREI (Kolkata), Singapore MRT, SEC/STE also of Singapore, were said to have bid for close to Rs. 3,000 crore of VGF.

Financial bids

Financial bids were opened at about 11.30 a.m. by the three-member panel consisting of HMR MD, Principal Secretary (Finance) N. Ramesh Kumar and HMWSSB Managing Director G. Ashok Kumar.

They were assisted by ‘owner’s consultant’ – Span Semaly and legal advisor Amarchand Mangaldas firm.

Within no time it became clear that Maytas Infra and partners got the decisive edge to bag the contract as they also offered to make regular royalty payments spread over the contract period of 30 years with five years for construction.

It is said to have offered to pay royalty of Rs. 11 crore to begin with and later pay between Rs. 100 crore and Rs. 1,800 crore per year during the period, whereas the Magna-led consortium offered one time payment of about Rs.250 crore.

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