MUMBAI METRO ONEPPP session

Faisal Khan

Presentation Plan

Present Scenario of transport infrastructure in Mumbai

Project DescriptionBidding selectionPPP structure of the ProjectRisk allocation framework

Present Transport Scenario in Mumbai

11 million people travel daily by Public Transport (share of PT more than 90%) Many areas in city and suburbs are not served by rail system Suburban rail traffic increased by 6 times while the capacity increased by only 2.3 times 4500 passengers travel per train against the carrying capacity of 1750 resulting in unbearable overcrowding

Project Description

Consists of three phases Phase I, II, III Phase I – Versova-Andheri-Ghatkopar line with dedicated elevated corridor and of length 11.07 km with 12 stations Rail to have maximum speed of 80kmph with average speed of 33kmph Project will provide East-West rail based connectivity to Central and Western suburbs Total time for journey from Versova to Ghatkopar would be approximately 21 minutes as against 90 minutes by other modes of transport

Bidding Selection Detailed feasibility study carried out under the Indo-

German technical co-operation to the group of TEWET, DE-Consult and TCS during 97-00

Study recommended mass transit corridor from Andheri to Ghatkopar as potentially bankable and economically viable – Government decided to go on PPP basis

Management of transaction process – Consortium of Louis Berger as technical consultants, PwC, Masons and Economic Laws and Practices was appointed to assisst MMRDA

Bids invited in August 2004 and 150 bidders responded to EoI

Bid process: Technical and financial stage

Bidding selection contd.. Technical bids invited in May 05

HCC and RITES Reliance Energy Limited, Veolia Transport, Connex-France Shaktikumar Sacheti Limited and Lingakaran Metro Siemens, L&T, Gammon, BEML IL&FS, ITD Thailand and Unity Infraprojects

Financial bids invited from qualified bidders in January 06 Reliance Energy Limited and Connex-France IL&FS, ITD Thailand and Unity Infraprojects

Bid Won by consortia of Reliance Energy Limited, Veolia Transport, Hong Kong MRT & Connex France

Bidding Selection contd.. Expected IRR of 26% by REL-led consortium

but government negotiated and the consortium agreed to an equity IRR of 15%

Project faced delay in obtaining approval for VGF as its concession agreement was based on MCA of NHAI and only tentative guidelines were in place for PPP agreements

Government gave special grant of 20% and GoM approved grant of 7.5% of project cost

SPV incorporated in December 2006 by the name

‘Mumbai Metro One Private Limited’

Financial Model

Project Cost INR 2356 Crores

Viability Gap Funding INR 650 Crores

Debt:Equity 70:30

Total Equity INR 513 Crores

MMRDA Equity (26%) INR 134 Crores

Reliance Energy (69%) INR 353 Crores

Connex-France (5%) INR 26 Crores

Debt INR 1194 Crores

PPP structure of project

Connex-France & others

Reliance Energy Ltd

Indian Bank, Oriental Bank of

CommerceIDBI,

Corporation Bank

Canara Bank, Karur Vysya Bank

MMRDA

EPC Contractor

s5%

69% 26%MMOPL

Risk Allocation FrameworkRisk Type Sensitivity Risk Period (yrs) Risk Bearer

Land acquisition High 0-5 Government

Financing Risk Medium 0-5 Private sector

Regulatory, Administrative appr.

Low 0-5 Private sector

Design Risk Medium 0-5 Private sector

Construction Risk

Medium 0-5 Private sector

Change in scope risk

Low 0-5 Government

Financing risk Medium 0-5 Private sector

Technology risk Low 0-35 Private/Govt

O&M risk Medium 0-35 Private sector

Market risk High 0-30 Private sector

Performance risk High 0-30 Private sector

Default risk Low 0-35 Defaulting party

Force Majeure Low 0-35 Shared

Thank You for Listening