Govt granted Rs 500 crore for the Hyderabad Metro Rail

The state government granted Rs 500 crore for the Hyderabad Metro Rail 
project . Larsen & Toubro,the private promoter of the project,will 
begin ground works by January 2011. 
The state cabinet at its meeting here on Wednesday formally awarded 
the Rs 12,132-crore metro rail project to L&T which won the bid.The 
company has sought a viability gap fund of Rs 1,458 crore from the 
government. 

The cabinet meeting chaired by chief minister K Rosaiah on Wednesday 
approved the three-member expert committees recommendation to award 
the project to L&T.The development of elevated metro rail system is 
being done on a design,build,operate,finance and transfer (DBFOT) 
basis in the publicprivate partnership (PPP) mode. 

Announcing details of the cabinet meeting,information minister J Geeta 
Reddy said the cabinet had decided to release Rs 500 crore as first 
installment of the VGF in the current financial year to the 
company.She said the cabinet was apprised of the salient features of 
the draft concession agreement,which would govern the elevated metro 
rail project in three high density traffic corridors of Hyderabad 
viz., Miyapur-L B Nagar (28.87 km),JBS-Falaknuma (14.78 km) and Nagole- 
Shilparamam (27.51 km). 

The viability gap fund would be released by the Government of 
India,while the state government would spend another Rs 1,980 crore 
for acquiring 204 acre of private land and carrying out relief and 
rehabilitation measures. 

L&T would form a special purpose vehicle to implement the project and 
enter into a concession agreement with the government within a month 
after the Letter of Award.It would have to provide bank guarantee for 
Rs 360 crore as performance security and achieve financial closure 
within six months,the minister said.The ground works for the 70-km 
project would start in January 2011 and the project would be completed 
in five years,she added. 

The traffic demand per day is estimated to be 15 lakh passengers in 
2014 and 22 lakh in 2024,Metro Rail MD N V S Reddy said.