Mumbai Metro Line1

Public Private Partnership in Urban Rail Transit

Kapil Kumar Sinha 15554006

M.Tech(IFS)

First corridor of the proposed MRTS by Government of Maharashtra through MMRDA.

Elevated line of 11.4 km. from Versoa to Ghatkopar connecting 12 stations.

Connects the East Suburb to West suburb of the city reducing time of travel up to 70 minutes.

Project Brief

Mumbai Metro Line1

Project Cost : Rs. 2356 croreConcession Period : 35 years

PPP Structure : BOOT

PPP Structure BOOT ( Build Own Operate Transfer Transfer) operator has to design, finance, construct,

operate, own and maintain and transfer the ownership and assets at the end of the concession period.

Concession Period : 35 Years. Construction Period : 5 Years.

Reliance Energy Limited

69%

Veolia Transport

5%

MMRDA26%

Equity Stakes of mmopl

Special Purpose Vehicle (SPV) : Mumbai Metro One Private Limited (MMOPL)

The MMRDA contribute equity of Rs. 134 and have 3 members on the board of the SPV and ensured that it would be able to effectively monitor and influence decisions on financing, design and construction for the project. 

PPP StructureMumbai Metro One Private Limited (MMOPL) owns Viaduct Stations Bridges Depot Rolling stock Signaling system, Traction and Supervisory Control Data Acquisition (SCADA) system Communications systems Track work Fare collection system

The land for the depot has been taken on a long term lease which is renewable from the owners of the land.

Financing Information Total Project Cost : Rs. 2,356 crores. Viability Gap Funding : Rs. 650 crores

VGF 27.5% MMRDA + Private 72.5%Rs.650 crores Rs.1706

crores

Government of IndiaRs.650 crores (20% of project cost)

GOI

GOMGovernment of MaharashtaRs.180 crores (7.5% of project cost)

Rs.1240 crores arranged by private operator

Debt 70%

Rs.466 crores by private operator and MMRDA as per equity stake

Equity 30%

ConsortiumIDBI, Corporation Bank, Karur Vysya bank, Canara Bank, Indian Bank and Oriental Bank of Commerce.

DEBT arranged by private operators

Financing Information The cost of borrowing for the rupee component, which constitutes about 75 per cent

of the total debt, will be 12.25 per cent, while the foreign currency loan will be at 3.5 per cent above LIBOR (London Inter-Bank Offered Rate)

IIFCL (U.K.) is providing the foreign currency loan for the project.

The loan has been secured for a moratorium period of 2 years and a total loan repayment period of 15 years.

The project has also taken into consideration a service debt facility of around Rs. 70-80 crore

Rupee

Foreign Currency

DevelopmentThe development phase of the project was initiated in parallel to the VGF approval process. Major milestones achieved in the development phase are presented below: The SPV was incorporated in December 2006. The Engineering and Project Management Consultants, a consortium

of Parsons Brinkerhoff (USA) and Systra SA (France) joined the team on February 14, 2007

Signing of the Concession Agreement and Shareholders agreement took place on March 7, 2007

MMOPL and Government of Maharashtra entered the State Support Agreement on April 20, 2007

Construction commenced on February 8, 2008 Financial Closure for the project completed on October 3, 2008 Completed and opened for public use on 8th June, 2014.

Risk allocation framework

Risk Type Sensitivity Risk Period Primary Risk Bearer

Delays in land acquisition

High 0-5 years Government

Financing Risks Medium 0-5 years Private Sector

Planning Medium 0-5 years Private Sector

Regulatory, administrative & approval delays

Low 0-5 years Private Sector

PRE-OPERATIVE RISKS

Risk allocation framework

Risk Type Sensitivity Risk Period Primary Risk Bearer

Design Risk Medium 0-5 years Private Sector

Construction Risk Medium 0-5 years Private Sector

Change in Scope Risk

Low 0-5 years Government

Financing Risk Medium 0-5 years Private Sector

CONSTRUCTION PHASE RISKS

Risk allocation framework

Risk Type Sensitivity Risk Period Primary Risk Bearer

Technology Risk Low 0-35 years Private Sector/Government

Operations & Maintenance Risk

Medium 0-35 years Private Sector

Market Risk Low 0-30 years Private Sector

Performance Risk Medium 0-30 years Private Sector

OPERATIONAL PHASE RISK

Risk allocation frameworkRisk Type Sensitivity Risk Period Primary Risk BearerHandover Risk Low 35th years Private Sector

Private Operator Event of Default

Low 0-35 years Private Sector

MMRDA Event of Default

Low 0-35 years Government Sector

HANDOVER RISKS

Risk Type Sensitivity Risk Period Primary Risk Bearer

Interface Risk (with other metro corridors)

Medium Throughout Private Sector

Force Majeure Low Throughout SharedChange in Law Risk Low Throughout Private Sector

OTHER RISKS

Ridership and Fare Structure

2014 2021 20310

1

2

3

4

5

6

7

8

9

10

Ridership in lakh per day

Present- 3 lakh per day 2021- 6.65 lakhs per day 2031- 8.83 lakhs per day

Fare fixed by MMOPL under first committee are Rs. 10 to Rs.110 but discounted fare are taken due to order i.e. Rs. 10 to Rs. 40. Monthly fare for is from Rs.675 to Rs.900

Learnings

Delay in Obtaining VGF approval. Delay in approvals can potentially derail the project. Land Acquisition process can lead to issues in the project. Clear Specifications on Asset Transfer on termination. Public Support for the project. Role of Good Project Preparation.

References http://toolkit.pppinindia.com/urban-transport/module3-rocs-mm8.php https://mmrda.maharashtra.gov.in/metro-line-1 Public Private Partnership projects in India Compendium of Case Studies http://www.reliancemumbaimetro.com/fares.h