13. COST ESTIMATES AND FINANCIALS · 2019-02-13 · works, rolling stock, environmental protection, rehabilitation, etc. at Jan’ 2016 price level. While preparing the capital cost

Detailed Project Report for Rail Based Mass Transit System in Varanasi

Final Report CHAPTER 13: COST ESTIMATES AND FINANCIALS

February, 2016 Page 13‐1

1133.. CCOOSSTT EESSTTIIMMAATTEESS AANNDD

FFIINNAANNCCIIAALLSS

13.1 CAPITAL COSTS

13.1.1 Coverage

Cost estimate for Varanasi Metro corridors (Corridor‐I from BHEL to BHU and Corridor‐II from

Benia Bagh) has been prepared covering civil, electrical, signaling and telecommunications

works, rolling stock, environmental protection, rehabilitation, etc. at Jan’ 2016 price level.

While preparing the capital cost estimates, various items have generally been grouped under

three major heads on the basis of (i) Route km length of alignment, (ii) Number of units of that

item and (iii) Item being an independent entity. All items related with alignment, construction,

permanent way, Third Rail, Signaling & Telecommunication, whether in main lines or in

maintenance depot, have been estimated at rate per Route km/km basis.

Cost of station structures, other electrical services at these stations and Automatic Fare

Collection (AFC) installations at all stations have been assessed in terms of each station as a

unit. Similarly, for items like Rolling stock costs have been estimated in terms of number of

units required for each item. In remaining items, viz. land, utility diversions, rehabilitation, etc.

the costs have been assessed on the basis of each item, taken as an independent entity.

In order to arrive at realistic cost of various items, costs have been assessed on the basis of

recently awarded rates of Lucknow Metro, DPRs of DMRC Ph‐IV, Lucknow and other various

Metros and suitable escalation factor has been applied to bring these costs to Jan’ 2016 price

level.

Basic cost is exclusive of various taxes and duties viz. custom duty, excise duty, Sale tax, VAT

etc. and details of taxes and duties are worked out separately. Current rates of various taxes

and duties have been taken into consideration and taxes / duties have been applied as per

prevalent practice of DMRC.

13.1.2 Land Requirement

a) Finalization of alignment, location of stations, entry / exits etc. has been done with the

objective of keeping land requirement to the bare minimum. For this purpose, alignment,

stations, depots, parking and Property Development (PD) have been planned in the State

Government land unless and until it becomes unavoidable to plan these facilities in Central

Government land or private land. Common Depot for both Corridor‐I & Corridor‐II has




been planned in the Non‐agricultural land of Ganeshpur area (Private land). As Varanasi city

is very congested, most part of both the corridors is planned underground and stations are

proposed in open land. The summary of land requirement for Corridor ‐ I & II is as under :‐

TABLE 13.1: LAND & STRUCTURES REQUIREMENT (IN HECTARES) FOR CORRIDOR‐I

Ownership Purpose Permanent

LandTemporary

LandStructures (Floor area)

Central Govt (Northern Railway)

Alignment, Station etc 0.07 0.40 0.05

State Govt

Alignment, Station etc 1 2.6 0.2633

Private


Depot (Ganeshpur) 13.2

0 0.5

Casting Yard 0 6 0

RSS 0.3 0 0

Total 14.55 8.5 1.02

TABLE 13.2: LAND & STRUCTURES REQUIREMENT (IN HECTARES) FOR CORRIDOR‐II

Ownership Purpose Permanent

LandTemporary

LandStructures (Floor area)

Central Govt Alignment, Station etc 0.14 0 0.0242

State Govt


RSS 0.3 0 0

Total 1.1 2.1 0.105

Private

Alignment, Station etc 0.13 0 0.18

Casting yard 0 4 0

Total 0.13 4 0.18

b) The land area for piers of elevated alignment, elevated stations falling over the existing

road and entry/exit falling on road / State Government land has not been accounted for in

the land requirement and costing as present land use is not getting affected by these

facilities. Land requirement for other metro utilities like ramp, off the road elevated

stations, depot, RSS, ancillary buildings etc. have been accounted as far as per details in

subsequent paras.




c) Rate of Central Govt. land (Northern Railway at Varanasi Cantt for Corridor‐1 and Post

office at Sarnath for Corridor‐2), required on permanent basis has been taken as Per Circle

rates ‐ 01st Aug'15, published by Collectorate, Varanasi. No solatium has been applied to the

basic land cost. Cost of Passenger Reservation System (PRS) at Varanasi Cantt. including

cost of structure, electrical and S&T items, terminals etc has been taken as Rs. 3.0 crores as

per discussion with CRIS.

d) Rate of Central Govt. land (Northern Railway at Varanasi Cantt), required on temporary

basis for 3 years construction period, has been taken @ 6% Per annum of Circle rates ‐ 01st

Aug'15, published by Collectorate, Varanasi. No solatium has been applied to the basic land

cost.

e) Rate of State Govt. Land required on permanent basis has been taken from DPR for

Lucknow Metro with updation. No solatium has been applied to the basic land cost. In case,

State Govt. is in a position to provide its land free of cost or at reduced rates, it will further

improve the financial statistics of the project.

f) Cost of structures for rehabilitation of squatters at Tulsi Manas Mandir has been taken as

Rs. 25 crore per Hectare. Rehabilitation of squatters is required as per norms of

International Funding Agencies.

g) Rate of Private land & non commercial structures has been taken from Circle rates ‐ 01st

Aug'15, published by Collectorate. Above this, 100% solatium has been applied as per

LARRA. No administrative cost is added towards land acquisition activities, as it is

understood that this activity shall be carried out by State Govt. from its own resources.

h) On lines with DPR for Kanpur MRTS, efforts have been made to provide parking for

maximum possible stations. To make the project financially viable, property development

has been proposed on suitable land pieces on preliminary stage. Moreover, in line with DPR

for Lucknow Metro, cost of land towards parking cum PD is not loaded to the cost estimates

and this cost will be borne by State Govt. separately. Details of land required for parking

cum PD is mentioned separately in relevant chapter.

i) As advised by LMRC, depreciated rates for State Govt. structures have been taken after

applying maximum allowable depreciation of 60%.

j) Rate of private commercial structures including land is calculated as 300 x specified

monthly rent, published by Collectorate Varanasi, August' 15. 100% Solatium has been

applied to basic cost of structures.

k) Annual cost of private land required on temporary basis (for construction of U/G stations at

University, RBS college etc.) is calculated as 6% of corresponding circle rate of that locality.

Construction period is taken as 3 years. No solatium has been applied to basic land cost.




l) The total cost of Land works out to be Rs. 438.47 Crores for Corridor‐I and Rs. 36.99 Crores

for Corridor‐II.

13.1.3 Items other than Land: Cost of items other than land is based upon LAR / DPR

rates as under:‐

TABLE 13.3: BASIS OF RATES

Item

No. Item Basis of Rates

2.0 Alignment and Formation

2.1 Underground section by

T.B.M excluding station

length

Avg. of Esc. Rates of DMRC Ph‐4 DPR May'14 & LMRC DPR

May'13 (Base rates are Rs. 111.00 Cr.& Rs. 105.71 Cr. Resp.)

2.2 Underground section by cut

& cover for Ramp

Average of escalated rates of DMRC Ph‐IV DPR May'14 & LMRC

DPR May'13. (Base rates are Rs. 102.87 Cr.& Rs. 97.97 Cr. Resp.)

2.3 U/G section by NATM for

alignment and access tunnel

Estimated rates are based upon escalated rates (excluding taxes)

for Airport Express Metro Link Contract package no. C‐6, 2010.

Completion cost is Rs. 308 Cr. inclusive of taxes and duties @

20%. for 2.3 Km tunnel & one tunnel ventilation building.

Estimated rates are worked out as Rs. (308‐8)/1.2/2.3 and

escalation is applied.

2.4 Elevated section excluding

viaduct length in station

Estimated rates are based upon accepted work (Sept'14) of

elevated priority corridor of LMRC. Total Length = 8250‐

8x140(stn length)‐315 (special span) + 300 (depot connectivity) =

7115m. Cost of Viaduct is Rs. 324.2‐7.77 = Rs. 316.43 Cr.

inclusive of taxes @ 18.54%. and Rs. 266.94 Cr. w/o taxes. Basic

rates per km are 266.94/7.115 i.e. Rs. 37.52 Cr. and escalated

rates comes out to Rs. 39.88 Cr. per Km.

2.5 Elevated Section‐ Special

Span

(a) 34m+45m+34m

Estimated rates are derived from DMRC LAR for Mayapuri‐

Naraina CLC ‐ 34m+60m+34m at the cost of Rs. 15 Cr.

2.6 At‐grade Section Estimated rates are derived from escalated rates of At‐grade

section of Nagpur Metro DPR (June’2012, Base rate is Rs. 2.90 Cr

per Km)

2.7 Entry to Depot Estimated rates are based upon accepted work (Sept'14) of

elevated priority corridor of LMRC. Total Length = 8250‐

8x140(stn length)‐315 (special span) + 300 (depot connectivity) =

7115m.

Cost of Viaduct is Rs. 324.2‐7.77 = Rs. 316.43 Cr. inclusive of

taxes @ 18.54%. and Rs. 266.94 Cr. w/o taxes.

Basic rates per km are 266.94/7.115 i.e. Rs. 37.52 Cr. and

escalated rates comes out to Rs. 39.88 Cr. per Km.




Item


3.0 Station Buildings

3.1 Underground Station (160 m Length, 2‐Level) incl. EM works, VAC etc. by Cut & Cover

a Underground Station‐ Structural Civil works

As the length of station is only 160m, rates have been taken @

80% of Estimated rates based upon average of escalated rates of

DMRC Ph‐IV DPR May'14 & LMRC DPR May'13. Base rates are Rs.

116.80 Cr.& Rs. 125.16 Cr.

b Underground Station‐ EM works etc.



DMRC Ph‐3 LAR CE‐09 (lot 3) 06.08.13 @ Rs. 24.63 Cr.

c Underground Station ‐ ECS & TVS etc



DMRC Ph‐3 LAR CE‐10 & 11 (lot 3) 08.05.13 @ Rs. 30.12 Cr.

3.2 Underground Station (140 m Length or less, 3‐Level) incl. EM works, VAC etc. by Cut & Cover

a Underground Station‐ Structural Civil works With 3‐level station, length of station is proposed as 140m /

130m. The construction efforts shall be similar to 160m long 2‐

level station. Hence, rates adopted are same as that for 160 m

station with 2‐level.



3.3 Underground Station (100 m Length or less, 4‐Level) incl. EM works, VAC etc. by Cut & Cover

a Underground Station‐ Structural Civil works

With 4‐level station, length of station is proposed as 97m. The

construction efforts shall be similar to 140m long 3‐level station.

Hence, rates adopted are same as that for 140 m station with 3‐

level.



3.5 Underground Station‐ Architectural Finishes


80% of Estimated rates based upon average of escalated LAR of

LMRC ‐ accepted cost (July'15) of Rs. 58.74 Cr. inclusive of taxes

and duties @ Rs. 18.54% for 8 elevated Stations(140m). Base

cost per LMRC station (140m) comes out to Rs. 7.3425 Cr. with

taxes and Rs. 6.19 cr. per station without taxes) are adopted.

3.6 Elevated Station Buildings (85mx19.2 or less)




Item


a Elevated station ‐ Civil Works including Viaduct

For Kanpur MRTS length of elevated station for 6‐coaches was

kept as 140m. For Kanpur DPR, Estimated rates are based upon

LMRC accepted cost of Rs. 261 Cr. (Sep'14) for 8 Stations

inclusive of taxes & duties @ 18.54% and Rs. 220.18 Cr. without

taxes & duties. For Kanpur MRTS, Cost of 140m x 27m and 140m

x 24m elevated stations comes out to Rs. 32.28 Cr./station and

Rs. 28.70 Cr./station respectively.

As the length of elevated station for Varanasi MRTS is 85m /

75m, reduced rates @75% of rates for Kanpur DPR have been

taken. Accordingly, for Varanasi MRTS, Cost of 85m x 19.20m

elevated stations is worked out as Rs. 21.79 Cr./station.

The LAR based cost of 3‐coach elevated stations at Kochi Metro

comes out to Rs. 40 Cr./station which is higher than the awarded

cost of the 6‐coach 8 numbers elevated stations for Lucknow

Metro. Hence, LAR of Kochi metro have not been applied to

Varanasi Metro.

b Elevated station ‐ EM Works etc.

Estimated rates are based upon awarded rates of Kochi Metro,

KE‐10 dt. 12.12.2014. Avg. cost 4.21 Cr./Stn plus escalation.

3.7 Elevated Station‐ Architectural Finishes


80% of Estimated rates based upon LMRC accepted cost (July'15)

of Rs. 58.74 Cr. inclusive of taxes and duties @ Rs. 18.54% for 8

elevated Stations(140m). Cost per LMRC station (140m) comes

out to Rs. 7.3425 Cr. with taxes and Rs. 6.19 cr. per station

without taxes) are adopted.

3.10 Lifts & Escalators (Elevated and UG stations)

a Lifts Estimated rates are based upon DMRC Ph‐3 LAR CE‐3 (lot 1 & 2)

Dec'12, Rs. 32.27 lacs. plus escalation.

b Escalators Estimated rates are based upon DMRC Ph‐3 LAR CE‐4 (lot 1 & 2)

May'13, Rs. 68.69 lacs. plus escalation.

4.0 Maintenance Depot

4.1 Civil works Estimated rates are based upon LMRC Depot LAR, April'15,

excluding taxes and duties i.e. Rs. 107.29 Cr.

Out of the two depots, Depot at Kalindi Vihar for Corridor‐2 is

located in low lying area and cost of filling by average 2.0m has

been included in civil cost.

4.2 EM works + Machinery & Plant + General Works

Estimated rates for E&M are based upon LMRC Depot LAR,

April'15, excluding taxes and duties @ Rs. 18.44 Cr. Rates for

Machinery & Plant totalling Rs.90 Cr. are based upon various

relevant LARs.

5.0 P‐Way




Item


5.1 Ballastless track for elevated & underground Section

Estimated rates are based upon average of escalated rates of

DMRC Ph‐IV DPR May'14 & LMRC DPR May'13.

5.2 Ballasted track for Depot Estimated rates are based upon average of escalated rates of


5.3 Ballastless track for entry to Depot

Estimated rates are based upon average of escalated rates of


6.0 Traction & power supply incl. Third Rail, RSS, TSS, ASS etc.

6.1 UG Section and Elevated section including SCADA

Estimated rates are based upon awarded rates of BMRCL

Dec,2009 Rs 11.78 Cr./Km plus escalation.

6.2 For Depot Entry Estimated rates are based upon awarded rates of BMRCL


6.3 For Depot Estimated rates are based upon awarded rates of BMRCL


6.4 For 132kV GIS and 132kV cable/transmission line from GSS to RSS

Estimated rates are based upon DMRC Ph‐IV DPR plus

escalation.

7.0 Signalling and Telecom.

7.1 Signalling Estimated rates are based upon awarded rates of LMRC, Sept'15.

7.2 Telecommunication Estimated rates are based upon 90% of awarded rates of LMRC,

Sept'15.

7.3 Automatic fare collection Estimated rates are based upon Jaipur Metro LAR, Mar'12 @3.67

Cr. Per station plus escalation.

7.4 Central Clearing House System (CCHS)

As per prevalent DMRC rates.

7.5 Platform Screen Doors As 3‐coach are proposed, rates adopted are 70% of the (LAR i.e.

DMRC / 20/111 ‐ 196/2014 (Lot 3), May'15, Rs. 2.26 Cr. for 6

Coaches, 24 doors).

8.0 Rolling Stock

Estimated rates are based upon LMRC accepted rates SEP'15.

9.0 Environment, R & R incl. Hutments etc.

a Environmental Cost As per details given in Chapter 12

b R & R As per details given in Chapter 12

10.0 Misc. Utilities, road works, Topographic Surveys, Geotechnical Investigation, Barricading, Tree Cutting and replanting, other civil works such as signage's, Environmental protection and traffic management.

10.1 & 10.2

Civil works & Electrical works Estimated rates are based upon average of escalated rates of





Item


11.0 Capital Expenditure on Security: Estimated rates are based upon average of escalated rates of

DMRC Ph‐IV DPR May'14 & LMRC DPR May'13. The expenditure is required to cover the civil and

Electrical items, equipments (X‐Ray machine, Metal detector etc.)

12.0 Staff Quarters and OCC Building: Estimated rates are based upon average of escalated rates of DMRC Ph‐IV DPR May'14 & LMRC DPR May'13. OCC building is included in cost estimate for corridor‐1 only and it will cover Corridor‐2 also. As such, no separate OCC building will be required for corridor‐2. Cost for Green Building concept has been taken as Rs. 7 Cr. for each corridor. This is based upon cost of Rs. 10 cr. taken for 23 Km Corridor of Kanpur MRTS.

13.0 Capital Expenditure on Inter modal integration including Footpath for pedestrians, Feeder Buses and Bicycles @2% of Total Cost excluding Land ‐ As per LMRC DPR, it is taken @ 2% of total cost excluding land.

13.1.4 Capital Cost Estimate

The abstract of capital cost estimate of Corridor‐1 & 2 is given in Table 13.4. Detailed capital

cost estimate for Corridor‐1 & 2 is given in Table 13.5 and 13.6 respectively.




TABLE 13.4: ABSTRACT OF COST ESTIMATE OF CORRIDOR‐1 & 2

S. No. Item

Corridor‐1 Corridor‐2

Amount (Rs. in Crore)


1 Land 438.47 36.99

2 Alignment and Formation 1950.92 960.11

3 Station Buildings incl. Civil works, EM works, ECS, TVS, Lift, escalators & Architectural Finishes etc

2409.98 1295.42

4 Depot including civil, EM, Machinery & plants, general works

218.31 0.00

5 P‐Way for main line, depot and depot connectivity 199.19 80.46

6 Traction & power supply 750V DC 439.43 181.08

7 Signalling and Telecom. Incl. AFC, Platform screen doors, CCHS etc.

392.74 195.24

8 Rolling Stock 684.18 325.80

9 R & R incl. Hutments etc. 8.99 2.95

10

Misc. Utilities, road works, Topographic Surveys, Geotechnical Investigation, Barricading, Tree Cutting and replanting, other civil works such as signage's, Environmental protection and traffic management

143.00 73.05

11 Capital Expenditure on Security including civil and EM works

5.61 2.97

12 Staff Quarters and OCC Building and green building concept (Cost of OCC building is included in corridor‐1 only)

92.83 21.63

13 Capital Expenditure on Inter modal integration including Footpath for pedestrians, Feeder Buses and Bicycles @2% of Total Cost excluding Land

130.90 62.77

14 Total of all items except Land 6676.08 3201.49

15

General Charges incl. Design charges, including Metro Bhawan, (Civil+EM works) @ 7% on all items except land. (Metro Bhawan is charged to coridor‐1 only and it will cater to both the corridors)

467.33 224.10

16 Total of all items including G. Charges 7143.41 3425.59

17 Contingencies @ 3 % on all items except land 214.30 102.77

Gross Total including Contingencies (excluding Land Cost) 7357.71 3528.36

Gross Total including Contingencies (including Land Cost) 7796.18 3565.35

Insurance 0.6% of Capital cost excluding land 40.06 19.21

Gross Total including Insurance, Contingencies and Land 7836.00 3585.00

Taxes & Duties 1157.00 555.00

Gross Total including Taxes & Duties 8993.00 4140.00

Note: For quantities of various items, detailed estimate may be referred.




TABLE 13.5: CAPITAL COST ESTIMATE CORRIDOR‐1

CORRIDOR ‐ 1: BHEL TO BHU

Total Length = 19.47 Km, From = (‐) 325m to 19025m, UG = 15.505 Km & ELEV = 3.845 Km

Depot Entry = 0.12 Km, Stations = 17, Elevated = 4 Nos. & U/G by Cut & cover = 13 Nos.

Jan' 2016, Price Level

S. No.

Item Unit Rate (Rs. in

Crore) Qty.


Without taxes

1.0 Land

a Central Govt. Land ‐Permanent (without Solatium)

Ha 34.80 0.07 2.44

b Central Govt. Land ‐Temporary (@ 6% of circle rates PA for 3 years, without Solatium)

Ha 6.260 0.40 2.50

c Central Govt. Structures (PRS at Varansasi Cantt including structure, Electrical, S&T, Terminal etc)

Ha 3.00 LS 3.00

d State Govt. Land ‐Permanent (for Alignment, Depot, RSS, Ancillary Bldgs, Misc., without Solatium)

Ha 5.50 1.00 5.50

e State Govt. Land ‐Temporary Ha 1.32 2.60 3.43

f State Govt. Structures ‐Permanent(Depreciated cost after 60% depreciation)

Ha 7.01 0.2633 1.85

g Private Land ‐Permanent (for Depot including Solatium)

Ha 21.85 13.20 288.42

h Private Land ‐Permanent (for Alignment, RSS, Ancillary Bldgs, Misc., including Solatium)

Ha 48.40 1.35 65.34

i Private Land ‐Temporary (for underground station by cut & cover etc, Misc., @ 6% of circle rates PA for 3 years, including Solatium)

Ha 5.198 2.50 13.00

j Private Land ‐Temporary (for casting yard including Solatium)

Ha 5.198 6.00 31.19

k

Private Structure ‐ Permanent including Solatium as per LARRA (average rate has been worked out after applying relevant circle rates Aug' 2015 for residential and commercial structures)

Ha 20.40 1.02 20.81

l Cost of Structures for rehabtilation of squatters at Tulsi Manas Mandir

Ha 25.00 0.04 1.00

Sub Total (1) 438.47


2.1 Underground section by T.B.M excluding station length

R. Km. 121.39 13.072 1586.81

2.2 Underground section by cut & cover for Ramp R. Km. 112.50 0.224 25.20

2.3 U/G section by NATM for alignment and access tunnel

R. Km. 142.15 1.349 191.76




S. No.


Crore) Qty.


Without taxes

2.4 Elevated section excluding viaduct length in station

R. Km. 40.37 3.525 142.30

2.5 Elevated Section (Special Span ‐34m+45m+34m = 113m)

Each 13.57 0.00 0.00

2.6 At‐grade Section R. Km. 3.45 0.00 0.00

2.7 Entry to Depot R. Km. 40.37 0.12 4.84

Sub Total (2) 1950.92


3.1 Underground Station (160 m length, 2 Level) incl. EM works, VAC etc. by Cut & Cover

a Underground Station‐ Structural Civil works Each 106.43 4.00 425.72

b Underground Station‐ EM works etc. Each 22.17 4.00 88.68

c Underground Station ‐ ECS & TVS etc Each 27.45 4.00 109.80

3.2 Underground Station (140 m or less length, 3 Level) incl. EM works, VAC etc. by Cut & Cover








3.4 Underground Station (160 m length) incl. EM works, VAC etc. by NATM




3.5 Underground Station‐ Architectural Finishes Each 9.61 13.00 124.93

3.6 Elevated Station Buildings (Type ‐I: 85mx19.2m)

a Elevated station ‐ Civil Works including Viaduct

Each 22.06 4.00 88.24

b Elevated station ‐ EM Works etc. Each 4.44 4.00 17.76

3.7 Elevated Station‐ Architectural Finishes Each 5.07 4.00 20.28

3.8 At‐grade Station Building

a At‐grade station ‐ Civil Works Each 16.26 0.00 0.00

b At‐grade station ‐ EM Works etc. Each 4.44 0.00 0.00

3.9 At‐grade Station‐ Architectural Finishes Each 5.07 0.00 0.00




S. No.


Crore) Qty.


Without taxes

3.10 Lifts & Escalators (Elevated, At‐grade and UG stations)

a Lifts Each 0.38 53.00 20.14

b Escalators Each 0.78 141.00 109.98

Sub Total (3) 2409.98


4.1 Civil works LS 109.49


LS 108.82


5.0 P‐Way


Route Km.

8.14 19.35 157.51

5.2 Ballasted track for Depot Track Km.

4.07 10.00 40.70

5.3 Ballastless track for entry to Depot Route Km.

8.14 0.12 0.98


6.0 Traction & power supply (750V DC)

6.1 UG Section & Elevated including SCADA Route Km.

15.79 19.35 305.54

6.2 For Depot entry Route Km.

15.79 0.12 1.89

6.3 For Depot Track Km.

7.90 10.00 79.00

6.4 Differential cost of 132kV GIS LS 20.00

6.5 132kV cable/transmission line from GSS to RSS.

LS

33.00


7.0 Signalling and Telecom.

7.1 Signalling R. Km. 8.78 19.35 169.89

7.2 Telecommunication Per

Station 4.64 17.00 78.88

7.3 Automatic fare collection Per

station 4.42 17.00 75.14

7.4 Central Clearing House System (CCHS) Each 18.00 1.00 18.00

7.5 Platform Screen Doors Per

Station 1.63 17.00 27.71

7.6 LED Screens for PD Per

Station 1.36 17.00 23.12


8.0 Rolling Stock Each 10.86 63.00 684.18


9.0 R & R incl. Hutments etc.




S. No.


Crore) Qty.


Without taxes

9.1 Environmental Cost As per details given in Chapter

12

5.50

9.2 R & R

3.49

Sub Total (9) 8.99

10.0


10.1 Civil works R. Km. 4.04 19.350 78.17

10.2 Electrical Works R. Km. 3.35 19.350 64.82

Sub Total (10) 143.00

11.0 Capital Expenditure on Security

11.1 Civil works Per

Station 0.270 17.00 4.59

11.2 EM works Per

Station 0.060 17.00 1.02

Sub Total (11) 5.61

12.0 Staff Quarters and OCC Building

12.1 Civil works R. Km. 1.190 19.350 23.03

12.2 EM works R. Km. 0.290 19.350 5.61

12.3 Cost of OCC Building ‐ Civil Works LS 45.55

12.4 Cost of OCC Building ‐ E&M Works LS 11.64

12.5 Cost for Green Building concept LS 7.00


13.0

Capital Expenditure on Inter modal integration including Footpath for pedestrians, Feeder Buses and Bicycles @2% of Total Cost excluding Land

130.90

14.0 Total of all items except Land 6676.08

15.0 General Charges including Design charges, incl. Metro Bhawan Building (Civil+EM works) @ 7% on all items except land

467.33

16.0 Total of all items including G. Charges 7143.41

17.0 Contingencies @ 3 % on all items except land 214.30

18.0 Gross Total including Contingencies (excluding Land Cost) 7357.71

19.0 Gross Total including Contingencies (including Land Cost) = 7796.18

20.0 Insurance 0.6% of Capital cost excluding land 6233.83 Crore 40.06




S. No.


Crore) Qty.


Without taxes

21.0 Gross Total including Insurance = 7836.23

Say 7836.00

Taxes & Duties 1157.00

Total Cost including Taxes & Duties 8993.00




TABLE 13.6: CAPITAL COST ESTIMATE CORRIDOR‐2

CORRIDOR ‐ 2: BENIA BAGH TO SARNATH

Total Length = 9.885 Km, From = (‐) 245m to 9395m, ELEV = 1.923 Km, Underground = 7.717 Km,

Stabling (UG) = 0.245 Km

Stations = 9 No’s, Elevated = 2 No's Underground =7 No’s.

Jan' 2016, Price Level

S. No. Item Unit Rate (Rs. in

Crore) Qty.


Without taxes

1.0 Land

a Central Govt. Land ‐Permanent (without Solatium)

Ha 34.80 0.14 4.872

b Central Govt. Land ‐Temporary (@ 6% of circle rates PA for 3 years, without Solatium)

Ha 2.43 0.0000 0.00

c Central Govt. Structures‐ Permanent (PRS at Cantt Rly stn, Cost of structure, electrical, S&T, Terminals etc.,)

Ha 34.00 0.0242 0.82

d State Govt. Land ‐Permanent (for Alignment, Depot, RSS, Entry/Exits, Ancillary Bldgs, Misc., without Solatium)

Ha 5.50 1.100 6.05

e State Govt. Land ‐Temporary Ha 1.32 2.10 2.77

f State Govt. Structures ‐Permanent (Depreciated cost after 60% depreciation)

Ha 5.854 0.105 0.61

g Private Land ‐Permanent (for Alignment, RSS, Entry/Exits, Ancillary Bldgs, Misc., including Solatium)

Ha 30.965 0.130 4.03

h Private Land ‐Temporary (for underground station by cut & cover etc, Misc., @ 6% of circle rates PA for 3 years, including Solatium)

Ha 5.57 0.00 0.00

i

Private Structure ‐ Permanent including Solatium as per LARRA (average rate has been worked out after applying relevant circle rates Aug' 2015 for residential and commercial structures)

Ha 99.068 0.180 17.83



2.1 Underground section by T.B.M excluding station length

R. Km. 121.39 6.078 737.81

2.2 Underground section by cut & cover for Ramp R. Km. 112.50 0.402 45.23

2.3 U/G section by NATM for alignment and access tunnel

R. Km. 142.15 0.745 105.90

2.4 Elevated section excluding viaduct length in station

R. Km. 40.37 1.763 71.17

2.5 Elevated Section (Special Span ‐34m+45m+34m = 113m)

Each 13.57 0.00 0.00

2.6 At‐grade Section R. Km. 3.45 0.00 0.00




2.7 Entry to Depot R. Km. 40.37 0.00 0.00



3.1 Underground Station (160 m length, 2 Level) incl. EM works, VAC etc. by Cut & Cover












3.4 Underground Station (180 m length) incl. EM works, VAC etc. by NATM




3.5 Underground Station‐ Architectural Finishes Each 9.61 7.00 67.27

3.6 Elevated Station Buildings (Type ‐I: 85mx19.2m)

a Elevated station ‐ Civil Works including Viaduct Each 22.06 2.00 44.12

b Elevated station ‐ EM Works etc. Each 4.44 2.00 8.88

3.7 Elevated Station‐ Architectural Finishes Each 5.07 2.00 10.14

3.8 At‐grade Station Building

a At‐grade station ‐ Civil Works Each 16.26 0.00 0.00

b At‐grade station ‐ EM Works etc. Each 4.44 0.00 0.00

3.9 At‐grade Station‐ Architectural Finishes Each 5.07 0.00 0.00

3.10 Lifts & Escalators (Elevated, At‐grade and UG stations)

a Lifts Each 0.38 27.00 10.26

b Escalators Each 0.78 80.00 62.40

Sub Total (3) 1295.42


4.1 Civil works including filling for low lying depot land

LS 0.00


LS 0.00




Sub Total (4) 0.00

5.0 P‐Way


Route Km.

8.14 9.885 80.46

5.2 Ballasted track for Depot Track Km.

4.07 0.00 0.00

5.3 Ballastless track for entry to Depot Route Km.

8.14 0.00 0.00

Sub Total (5) 80.46

6.0 Traction & power supply (750V DC)

6.1 UG Section & Elevated including SCADA Route Km.

15.79 9.885 156.08

6.2 For Depot entry Route Km.

15.79 0.00 0.00

6.3 For Depot Track Km.

7.90 0.00 0.00

6.4 Differential cost of 132kV GIS LS 10.00

6.5 132kV cable from GSS to RSS. LS 15.00


7.0 Signaling and Telecom.

7.1 Signaling R. Km. 8.78 9.885 86.79

7.2 Telecommunication Per

Station 4.64 9.00 41.76

7.3 Automatic fare collection Per

station 4.42 9.00 39.78

7.4 Central Clearing House System (CCHS) Each 18.00 0.00 0.00

7.5 Platform Screen Doors Per

Station 1.63 9.00 14.67

7.6 LED Screens for PD Per

Station 1.36 9.00 12.24


8.0 Rolling Stock Each 10.86 30.00 325.80


9.0 R & R incl. Hutments etc.

9.1 Environmental Cost As per details given in Chapter

12

2.28

9.2 R & R 0.67

Sub Total (9) 2.95

10.0


10.1 Civil works R. Km. 4.04 9.885 39.94

10.2 Electrical Works R. Km. 3.35 9.885 33.11





11.0 Capital Expenditure on Security

11.1 Civil works Per

Station 0.270 9.00 2.43

11.2 EM works Per

Station 0.060 9.00 0.54

Sub Total (11) 2.97

12.0 Staff Quarters and OCC Buiulding

12.1 Civil works R. Km. 1.190 9.885 11.76

12.2 EM works R. Km. 0.290 9.885 2.87

12.3 Cost of OCC Building ‐ Civil Works LS 0.00

12.4 Cost of OCC Building ‐ E&M Works LS 0.00

12.5 Cost for Green Building concept LS 7.00


13.0

Capital Expenditure on Inter modal integration including Footpath for pedestrians, Feeder Buses and Bicycles @2% of Total Cost excluding Land

62.77

14.0 Total of all items except Land 3201.49

15.0 General Charges including Design charges, incl. Metro Bhawan Building (Civil+EM works) @ 7% on all items except land

224.10

16.0 Total of all items including G. Charges 3425.59

17.0 Contingencies @ 3 % on all items except land 102.77

18.0 Gross Total including Contingencies (excluding Land Cost) 3528.36

19.0 Gross Total including Contingencies (including Land Cost) = 3565.35

20.0 Insurance 0.6% of Capital cost excluding land 3201.49 Crore 19.21

21.0 Gross Total including Insurance = 3584.56

Say 3585.00

Taxes & Duties 555.00

Total Cost including Taxes & Duties 4140.00

13.1.5 Taxes and Duties

Basic cost is exclusive of various taxes and duties viz. custom duty, excise duty, VAT etc. and

details of taxes and duties are worked out separately. Current rates of various taxes and duties

have been taken into consideration and taxes / duties have been applied as per LMRC. Central

and state taxes and duties (customs, Excise and VAT) for Corridor ‐1 & 2 have been worked out

to Rs. 1157 Crores and Rs. 555 Crores respectively and are detailed in Table 13.7 and 13.8.




TABLE 13.7: DETAILS OF TAXES AND DUTIES CORRIDOR – 1

Customs Duty = 22.85%

Excise Duty = 12.50%

VAT = 12.50%

S. No.

Description

Total cost without Taxes &

duties (Cr.)

Taxes and duties Total

Taxes & Duties (Cr.)

Custom Duty (Cr.)

Excise Duty (Cr.)

VAT (Cr.)

1 Alignment & Formation

Underground 1803.77 123.67 110.48 62.15 296.29

Elevated, At‐grade & entry to Depot 147.15 12.88 7.24 20.12

2 Station Buildings

a) Underground station‐civil works 1508.52 103.42 92.40 51.97 247.79

b) Underground station‐EM works 775.18 53.15 57.65 32.43 143.23

c) Elevated station ‐ civil works 108.52 9.50 5.34 14.84

d) Elevated station‐EM works 17.76 0.81 1.51 0.85 3.17

e) At‐grade station ‐ civil works 0.00 0.00 0.00 0.00

f) At‐grade station‐EM works 0.00 0.00 0.00 0.00 0.00

3 Depot

Civil works 109.49 7.51 6.71 3.77 17.99

EM works 108.82 4.97 9.25 5.20 19.43

4 P‐Way 199.19 36.42 4.23 2.38 43.03

5 Traction & power supply

a) Traction and power supply 439.43 40.17 28.01 15.76 83.94

6 S and T Works

a) S & T 248.77 45.48 5.29 2.97 53.74

b) AFC, PSD, LED screens & CCHS 143.97 24.68 3.82 2.15 30.65

7 Rolling stock 684.18 137.59 6.67 3.75 148.02

8 R & R hutments 8.99 0.56 0.56

9 Misc.

Civil works 78.17 6.84 3.85 10.69

EM works 64.82 6.89 3.87 10.76

10 Security

Civil works 4.59 0.40 0.28 0.68

EM works 1.02 0.13 0.10 0.23

11 Staff Quarters & OCC Buildings

Civil works 68.58 6.00 0.44 6.44

EM works incl. green bldg. conept 24.25 3.03 2.18 5.21

Total 6545.18 577.86 371.69 207.25 1156.80

Total Taxes & Duties 1157




TABLE 13.8: DETAILS OF TAXES AND DUTIES CORRIDOR – 2

Customs Duty = 22.85%

Excise Duty = 12.50%

VAT = 12.50%

S. No.

Description

Total cost without Taxes &

duties (Cr.)

Taxes and duties Total

Taxes & Duties (Cr.)

Custom Duty (Cr.)

Excise Duty (Cr.)

VAT (Cr.)

1 Alignment & Formation

Underground 888.94 60.94 54.45 30.63 146.02

Elevated & entry to Depot 71.17 6.23 3.50 9.73

2 Station Buildings

a) Underground station‐civil works 812.28 55.69 49.75 27.99 133.43

b) Underground station‐EM works 420.00 28.79 31.24 17.57 77.60

c) Elevated station ‐ civil works 54.26 4.75 2.67 7.42

d) Elevated station‐EM works 8.88 0.41 0.75 0.42 1.59

3 Depot

Civil works 0.00 0.00 0.00 0.00 0.00

EM works 0.00 0.00 0.00 0.00 0.00

4 P‐Way 80.46 14.71 1.71 0.96 17.38

5 Traction & power supply

a) Traction and power supply 181.08 16.55 11.54 6.49 34.59

6 S and T Works

a) S & T 128.55 23.50 2.73 1.54 27.77

b) AFC, PSD,LED screens & CCHS 66.69 11.43 1.77 1.00 14.20

7 Rolling stock 325.80 65.52 3.18 1.79 70.48

8 R & R hutments 2.95 0.18 0.18

9 Misc.

Civil works 39.94 3.49 1.97 5.46

EM works 33.11 3.52 1.98 5.50

10 Security

Civil works 2.43 0.21 0.15 0.36

EM works 0.54 0.07 0.05 0.12

11 Staff Quarters & OCC Buildings

Civil works 11.76 1.03 0.08 1.10

EM works incl. green bldg. conept 9.87 1.23 0.88 2.12

Total 3138.72 277.55 177.66 99.85 555.06

Total Taxes & Duties 555




13.2 OPERATION AND MAINTENANCE COST

The Operation and Maintenance cost for Varanasi MRTS Corridors is worked under three

major heads:

Staff cost

Maintenance cost which includes expenditure towards upkeep and maintenance of the

system and consumables and

Energy cost

Staff Cost

The O&M staff is assumed to be provided @ 35 persons per kilometer and the annual cost

this account is estimated considering average staff salary of Rs. 6.54 Lakhs per annum in the

year 2016. The escalation factor used for staff costs is 9% per annum to provide for growth

in salaries. The staff cost for the corridors of BHU to BHEL corridor and Beniabagh to Sarnath

corridor is estimated to be Rs 81.18 crore and Rs 41.43 Crore respectively for the inception

year i.e. 2023.

Maintenance Expenses

Maintenance expenses are taken @ Rs. 1.34 Crores/km in the year 2016. Maintenance cost

for Varanasi Metro corridors would be Rs 43.25 Crores and Rs 22.07 crores for corridor 1 and

corridor 2 respectively in the inception year i.e. 2023 considering escalation @ 7.5% p.a. for

every year of operation.

Energy Charges

The energy consumption to meet the traction and non‐traction power requirement is based

on traffic demand for different horizon years. The cost of electricity is a significant part of

O&M charges, constituting about 40‐50% of total annual working cost. The traction power

tariff is taken @ Rs. 5.60 per kVAh and fixed charges@125/kVA/ month in the year 2015

based on UPPTCL tariff order 2015, which is escalated @ 7.5% every year of operation.

Annual energy consumption charges have been estimated as Rs. 133.79 crores in year 2023,

Rs. 238.61 crores in 2031, Rs 540.88 crores in 2041, Rs. 1270.46 crores in 2051 for BHU to

BHEL corridor and Rs. 63.53 Crores in year 2023, Rs. 113.31 crores in 2031, Rs 262.09 crores

in 2041, Rs. 599.87 crores in 2051 for Beniabagh to Sarnath.

Additional Investment

To cater to increased traffic demand, additional investment will have to be made for

purchase of additional coaches. The additional investment in the year 2031 works out to Rs.




131.55 Crores for purchase of 9 additional coaches for BHU to BHEL Corridor and Rs. 131.55

Crores for 9 additional coaches for Beniabagh to Sarnath corridor in year 2031.

An investment of Rs. 534.51 Crores would be required for purchase of 30 additional coaches

in the year 2041 (Rs 427.61 crores for 24 additional coaches for BHU to BHEL Corridor and

Rs 106.90 crores for 6 additional coaches for Beniabagh to Sarnath corridor) and Rs 586.41

Crores for purchase of 27 additional coaches in the year 2051 (Rs 390.94 crores for 18

coaches for corridor 1 and Rs 195.47 crores for 9 coaches for corridor 2).These additional

investments have been worked out considering an escalation factor of 2% per annum.

Replacement Cost

The replacement costs are provided for meeting the cost on account of replacement of

equipments due to wear and tear. With the nature of equipment proposed to be provided

for the corridor, it is expected that about 25% of the equipment comprising Electrical, Rolling

stock and 50% of Signalling & Telecom would require replacement/ rehabilitation after 20

years.

The replacement cost for the BHU to BHEL corridor works out to be Rs. 2407.68 Crores and

Rs 1225.73 Crores for Beniabagh to Sarnath corridor. The replacement cost has been

worked out considering an escalation factor of 5% per annum.

The year wise total Operation and Maintenance cost for the corridors of Varanasi MRTS is

indicated in Table 13.9 and Table 13.10.

.




TABLE 13.9: O & M COST FOR BHU TO BHEL CORRIDOR (COST IN RS CRORE)

Year

Staff Cost Maintenance

Expenses

Energy

Charges Total O&M

cost

Addition/

Replace ‐

ment Cost

(Cr.) Esc @9% Esc @7.5% Esc @7.5%

2023 81.18 43.25 133.79 258.22

2024 88.48 46.49 143.83 278.80

2025 96.45 49.98 154.61 301.04

2026 105.13 53.73 166.21 325.06

2027 114.59 57.76 178.67 351.02

2028 124.90 62.09 192.08 379.07

2029 136.14 66.75 206.48 409.37

2030 148.39 71.75 221.97 442.11

2031 161.75 77.13 238.61 477.50 131.55 Addition of 9 coaches

2032 176.31 82.92 282.11 541.34

2033 192.18 89.14 303.27 584.59

2034 209.47 95.82 326.02 631.31

2035 228.32 103.01 350.47 681.80

2036 248.87 110.74 376.75 736.36

2037 271.27 119.04 405.01 795.32

2038 295.69 127.97 435.39 859.04

2039 322.30 137.57 468.04 927.91

2040 351.30 147.88 503.14 1,002.33


2042 417.38 170.90 662.65 1250.93

2043 454.95 183.72 712.35 1351.01 2,407.68 Replacement of 25% of

Elec. & 50% S&T assets 2044 495.89 197.50 765.77 1459.16

2045 540.53 212.31 823.21 1576.04

2046 589.17 228.23 884.95 1702.35

2047 642.20 245.35 951.32 1838.87

2048 700.00 263.75 1022.67 1986.41

2049 763.00 283.53 1099.37 2145.89

2050 831.67 304.80 1181.82 2318.28


2052 988.10 352.23 1521.80 2862.13

2053 1,077.03 378.65 1635.94 3091.61

2054 1,173.96 407.04 1758.63 3339.64

2055 1,279.62 437.57 1890.53 3607.72

2056 1,394.79 470.39 2032.32 3897.49

2057 1,520.32 505.67 2184.74 4210.73

2058 1,657.14 543.60 2348.60 4549.34




TABLE 13.10: O & M COST FOR BENIA BAGH TO SARNATH CORRIDOR (COST IN RS CRORE)

Year

Staff Cost Maintenance

Expenses

Energy

Charges Total O&M

cost

Addition/

Replace ‐

ment Cost

(Cr.) Esc @9% Esc @7.5% Esc @7.5%

2023 41.43 22.07 63.53 127.03

2024 45.15 23.73 68.30 137.18

2025 49.22 25.51 73.42 148.14

2026 53.65 27.42 78.92 159.99

2027 58.48 29.47 84.84 172.79

2028 63.74 31.69 91.21 186.63

2029 69.47 34.06 98.05 201.58

2030 75.73 36.62 105.40 217.74


2032 89.97 42.31 136.70 268.99

2033 98.07 45.49 146.96 290.51

2034 106.90 48.90 157.98 313.77

2035 116.52 52.57 169.83 338.91

2036 127.00 56.51 182.56 366.07

2037 138.43 60.75 196.25 395.43

2038 150.89 65.30 210.97 427.17

2039 164.47 70.20 226.80 461.47

2040 179.27 75.47 243.81 498.55


2042 213.00 87.21 312.88 613.09

2043 232.16 93.75 336.35 662.26 1,225.73 Replacement of 25% of

Elec. & 50% S&T assets 2044 253.06 100.78 361.57 715.42

2045 275.84 108.34 388.69 772.87

2046 300.66 116.47 417.84 834.97

2047 327.72 125.20 449.18 902.10

2048 357.21 134.59 482.87 974.68

2049 389.36 144.69 519.09 1053.14

2050 424.41 155.54 558.02 1137.96


2052 504.24 179.75 720.80 1404.78

2053 549.62 193.23 774.86 1517.71

2054 599.08 207.72 832.98 1639.78

2055 653.00 223.30 895.45 1771.75

2056 711.77 240.04 962.61 1914.42

2057 775.83 258.05 1034.80 2068.68

2058 845.66 277.40 1112.41 2235.47




13.3 ECONOMIC ANALYSIS

13.3.1 Approach

The economic appraisal has been carried out within the broad framework of Social Cost –

Benefit Analysis Technique. It is based on the incremental costs and benefits and involves

comparison of project costs and benefits in economic terms under the “with” and “without”

project scenario. In the analysis, the cost and benefit streams arising under the above

project scenarios have been estimated in terms of market prices and economic values have

been computed by converting the former using appropriate shadow prices. This has been

done to iron out distortions due to externalities and anomalies arising in real world pricing

systems. The annual streams of project costs and benefit have been compared over the

analysis period of 40 years to estimate the net cost / benefit and to calculate the economic

viability of the project in terms of EIRR.

The Economic Internal Rate of Return (EIRR) for the project has then been arrived using

Discounted Cash Flow technique to the net benefit stream at economic prices.

13.3.2 Evaluation Assumptions

The key assumptions used in the evaluation are listed in Table 13.11.

TABLE 13.11: KEY EVALUATION ASSUMPTIONS

Parameter Assumption

Price Level January ’2016

Construction period 2017‐2023

First year of operation of MRTS 2023

Daily to annual factor 340

13.3.3 Estimation of Benefits

The Varanasi MRTS will yield tangible and non‐tangible savings due to equivalent reduction

in road traffic and certain socio‐economic benefits. The Introduction of MRTS will result in

reduction in number of mini buses, IPT, usage of private vehicles, air pollution and increase

in the speed of road‐based vehicles. This, in turn, will result in significant social benefits due

to reduction in fuel consumption, vehicle operating cost and travel time of passengers.

Reduction in accidents, pollution and road maintenance costs are the other benefits to the

society in general.

The benefit stream includes:

Capital and operating cost (on present congestion norms) of carrying the total

volume of passenger traffic by existing mini bus and IPT system and private vehicles

in case MRTS project is not taken up.




Savings in operating costs of mini buses, IPT and other vehicles due to de‐congestion

including those that would continue to use the existing transport network even after

the MRTS is introduced.

Savings in time of commuters using the MRTS over the existing transport modes

because of faster speed of MRTS.

Savings in time of those passengers continuing on existing modes, because of

reduced congestion on roads.

Savings on account of prevention of accidents and pollution with introduction of

MRTS.

Savings in road infrastructure and development costs that would be required to

cater to increase in traffic, in case MRTS is not introduced.

Savings in fuel consumption on account of less number of vehicles on road and

decongestion effect with introduction of MRTS are included in those of vehicle

operating cost.

Various assumptions have been made, while assessing the economic benefits to the society

with the introduction of MRTS system. Table 13.12 gives the assumptions made for VOC and

VOT.

TABLE 13.12: ASSUMPTIONS FOR VOC & VOT

Mode VOC* Rs /km Value of Travel Time**Passenger/ Hr

Car 7.78 77

2w 3.38 36

Auto 5.84 36

Bus 18.65 58

*Source IRC SP 30 (2009) Values brought to 2015 level using factor of 5%

The Quantification of some of the social benefits has not been attempted because

universally acceptable norms do not exist to facilitate such an exercise. However, it has

been considered appropriate to highlight the same, as given below:

Reduced road stress

Better accessibility to facilities in the influence area

Economic stimulation in the micro region of the infrastructure

Increased business opportunities

Overall increased mobility

Facilitating better planning and up‐gradation of influence area

Improving the image of the city




13.3.4 Transport Demand on MRT Corridor Phase‐I

At present Phase‐1 MRTS corridors are served by mini buses and IPT modes in addition to

private vehicles. The total transport demand and demand estimated on Phase‐1 MRTS

corridors for various years is given in Table 13.13.

TABLE 13.13: TRANSPORT DEMAND FORECAST ON PHASE‐I MRTS CORRIDORS

Item 2021 2031 2041

Daily Total Trips (Lakh) 21.72 28.11 33.76

Daily Trips on MRT Corridors (Lakh) 5.09 6.72 9.15

Daily Trips by other modes (Lakh) 16.64 21.39 24.61

13.3.5 Savings

i. Capital and Operating Cost

The traffic on MRTS will come due to shifting of traffic from mini buses, IPT and private

modes once a more efficient system is available. The major shifting of traffic would be from

private vehicles. It has been estimated that 956 buses will be saved with the introduction of

MRTS. This will save Rs. 212 Crore in the year 2023 towards capital and operating cost of bus

system. The saving in respect of private vehicles and IPT modes will be approx. Rs. 147

Crore.

ii. Traffic Congestion

MRT will contribute towards reducing the congestion and journey time on roads because of

diversion of some traffic to MRTS. Reduction in traffic congestion will save the necessary

capital investment and vehicle operating cost as well as increase in time saved per vehicle.

With the implementation of MRTS, the savings from operating costs due to decongestion

effect has been estimated to be Rs. 32 Crore in the year 2023.

iii. Passenger Time Savings

With the introduction of proposed MRTS, there will be reduction in traffic congestion on the

roads and correspondingly, there will be saving in time of commuters travelling by various

modes of road transport. Similarly, MRTS itself being faster than conventional road

transport modes will also lead to considerable saving in time of commuters traveling on

MRTS. With the implementation of the project, the passenger time savings are estimated at

Rs. 753 Crore for the year 2023.

iv. Safety

The reduction in traffic volumes on roads brought about by modal transfer to the proposed

MRTS is expected to reduce number of accidents. Any reduction in number of accidents will

involve savings from damage to vehicles and savings towards medical and insurance

expenses to persons involved in accidents. In the absence of data related to accidents on the

corridor, this benefit could not be quantified.




v. Reduced Air Pollution

The benefits because of saving in cost of prevention of vehicular pollution, with the

implementation of Varanasi Metro in the year 2023 are expected to be approx Rs. 28 Crore.

vi. Savings in Road Infrastructure

The proposed MRT corridor will also bring savings in investment in road infrastructure

because shifting of passengers to MRT and withdrawal of vehicles in the project area. Since

no local data is available concerning the road infrastructure investment on this account, this

saving has not been incorporated into economic evaluation.

13.3.6 Shadow Pricing

The value of Project cost and benefits have been expressed in terms of market prices. These

prices, however, do not reflect the real resource cost and value of benefits derived from the

project to the economy. The market prices are distorted due to variety of factors. These

factors could be controlled/administered prices of inputs, monopolistic market of inputs, tax

structure etc. The factors used for converting project inputs and output to economic costs

are given in following Table 13.14.

TABLE 13.14: FACTORS USED FOR CONVERTING PROJECT INPUTS AND OUTPUT TO

ECONOMIC COSTS

S. No Item Factor

1 Capital Cost 0.85

2 Operations & Maintenance Cost 0.80

3 Savings in Capital & Operating Cost of Buses 0.89

4 Savings in Capital & Operating cost of Private Vehicles 0.8

5 Savings in Passenger Time 1.0

6 Savings in VOC 1.0

7 Savings in Accident Costs 1.0

8 Savings in Pollution Costs 1.0

13.3.7 Result of Economic Analysis

The cost and benefit streams for 35 year period in the economic prices have been worked

out and presented in Table 13.15.

The residual value of MRTS facilities (e.g. Metro corridors, equipment for power supply and

tele‐communication, rolling stock, etc.) in last year has not been taken into account as

benefit in these tables.

The total cost worked out on the above basis is then subtracted from the total benefits to

estimate the net benefit of the project. This flow is then subjected to the process of

discounting to work out the internal rate of return on the project, to examine the viability of

the project in economic terms. Thereafter, the Project EIRR has been arrived by using

shadow prices.

The EIRR of the project works out to 14.95 %.




TABLE 13.15: COST BENEFIT STREAM: ECONOMIC PRICES

Rs. in Crore

Year Capital

RunningExpense of MRTS

Total Costs

Savings Buses

FromOthers Vehicles

Savings From Total Savings

Net CashFlow

Rs. in Cr. Time VOC POL

2017‐18 702 0 702 0 0 0 0 0 0 -702

2018‐19 1277 0 1277 0 0 0 0 0 0 -1277

2019‐20 1734 0 1734 0 0 0 0 0 0 -1734

2020‐21 1864 0 1864 0 0 0 0 0 0 -1864

2021‐22 2671 0 2671 0 0 0 0 0 0 -2671

2022‐23 3590 308 3898 189 117 753 32 28 1119 -2779

2023‐24 1544 333 1876 209 130 833 35 31 1237 -639

2024‐25 0 359 359 231 143 921 39 34 1367 1008

2025‐26 0 388 388 255 158 1017 43 38 1511 1123

2026‐27 0 419 419 282 175 1125 47 42 1671 1252

2027‐28 0 453 453 312 193 1243 52 46 1847 1394

2028‐29 0 489 489 345 214 1374 58 51 2041 1552

2029‐30 0 528 528 381 236 1519 64 56 2256 1728

2030‐31 0 570 570 513 324 2051 59 63 3010 2440

2031‐32 0 648 648 567 358 2267 65 70 3328 2679

2032‐33 0 700 700 627 395 2506 72 77 3678 2978

2033‐34 0 756 756 693 437 2770 80 85 4065 3309

2034‐35 0 817 817 766 483 3062 88 94 4494 3677

2035‐36 0 882 882 847 534 3384 98 104 4967 4085

2036‐37 0 953 953 936 590 3740 108 115 5490 4537

2037‐38 0 1029 1029 1035 652 4134 119 128 6068 5039

2038‐39 0 1112 1112 1144 721 4570 132 141 6707 5596

2039‐40 0 1201 1201 1264 797 5051 146 156 7414 6213

2040‐41 454 1297 1751 1455 864 5750 418 173 8660 6908

2041‐42 0 1491 1491 1608 955 6356 462 192 9572 8080




Year Capital

RunningExpense of MRTS

Total Costs

Savings Buses

FromOthers Vehicles

Savings From Total Savings

Net CashFlow

Rs. in Cr. Time VOC POL

2042‐43 3088 1611 4699 1777 1055 7025 510 212 10580 5881

2043‐44 0 1740 1740 1498 890 5923 430 179 8919 7180

2044‐45 0 1879 1879 1528 907 6041 439 182 9098 7219

2045‐46 0 2030 2030 1559 926 6162 447 186 9280 7250

2046‐47 0 2193 2193 1590 944 6285 456 190 9465 7273

2047‐48 0 2369 2369 1622 963 6411 466 193 9655 7286

2048‐49 0 2559 2559 1654 982 6539 475 197 9848 7288

2049‐50 0 2765 2765 1687 1002 6670 484 201 10045 7280

2050‐51 498 2987 3486 1721 1022 6803 494 205 10246 6760

2051‐52 0 3414 3414 1756 1042 6939 504 209 10450 7037

2052‐53 0 3687 3687 1791 1063 7078 514 213 10659 6972

2053‐54 0 3984 3984 1826 1084 7220 524 218 10873 6889

2054‐55 0 4304 4304 1863 1106 7364 535 222 11090 6787

2055‐56 0 4650 4650 1900 1128 7511 545 227 11312 6662

2056‐57 0 5024 5024 1938 1151 7662 556 231 11538 6515

0 5428 5428 1977 1174 7815 568 236 11769 6341

IRR 14.95%




13.3.8 Sensitivity Analysis

A sensitivity analysis of the EIRR with 10% cost overrun and 10% reduction in traffic

materialization (separately) has been carried out. The EIRRs under these scenarios are given

in Table 13.16.

TABLE 13.16: PROJECT EIRR – SENSITIVITY ANALYSIS

Sensitivity Parameter EIRR (%)

Basic EIRR 14.95

With increase in cost by 10% 14.14

With reduction in traffic materialization by 10% 14.20

With 10% reduction in traffic and increase in cost by 10% 13.42

With increase in cost by 20% 13.43

It can be seen from the above table that 10% increase in cost affects economic viability more

than it does in case of reduction in traffic for the project. Accordingly, it is recommended

that controls should be exercised to keep the project cost under control.

13.4 FINANCIAL ANALYSIS

The financial analysis has been carried out individual corridors and also for the two MRTS

corridors combined. Accordingly, the capital costs and O&M costs for the two corridors have

been added to arrive at the total capital and O& M costs.

13.4.1 Capital Cost Estimates

The Construction cost of the metro corridors at Jan’ 2016 prices is estimated at Rs. 10946

Crore. The cost of land is estimated at Rs. 475 Crore including Rs. 441 Crore for private land

and the cost of government land has been estimated at Rs 35 Crore. The total cost of project

including land cost is estimated at Rs. 11,421 Crore.

The Central and State taxes and duties (Customs, Excise and VAT) amount to Rs. 1712Crore.

The capital cost components at Jan '16 prices are given in Table 13.17.

TABLE 13.17: CAPITAL COSTS (Rs. in Crore)

Cost Component Corridor I Corridor II Total

Construction Cost Including land 7836 3585 11421

Land Cost 438 37 475

Private land 419 22 441

Govt land 20 15 35

Construction Cost excluding land 7398 3548 10946

Taxes 1157 555 1712

Central Taxes 950 455 1405

State Taxes 207 100 307

Total Cost with Land & Taxes 8993 4140 13133

Total Cost with Central Taxes only 8786 4040 12826




13.4.2 Completion Cost

With escalation factor of 7.5 % p.a., the Completion Cost of the project including land is

estimated to be Rs. 15,743 Crore and with central taxes it is estimated at Rs 17,702 Crore.

For financial analysis both govt and private land costs have been considered as acquisition of

govt land will also require payouts. The land cost has not been escalated since land

acquisition would be completed in the initial two years. It is proposed to start land

acquisition and construction work prior to Year 2017 and commission the system by Year

2023. The details of completion cost under different scenarios are as per Table 13.18.

TABLE 13.18: DETAILS OF COMPLETION COSTS (Rs in Crore)

Particulars Completion Cost

Cost without taxes 15,743

With Central Taxes 17,702

With both Central and State taxes 18,130

13.4.3 Requirement of Funds

The year wise requirement of funds under different scenarios has been given in Table 13.19

(Without any Taxes), in Table 13.20 (With Central and State Taxes) and Table 13.21 (With

Central Taxes only). The cost of land is divided into two initial years during which it is

expected that the land acquisition work would be over and related payments would be

released.

TABLE 13.19: YEAR WISE FUND REQUIREMENTS WITHOUT TAXES (Rs. in Crore)

YEAR COMPLETION COST LAND COST TOTAL COMPLETION COST

2017‐2018 588 238 826

2018‐2019 1,265 238 1,503

2019‐2020 2,040 2,040

2020‐2021 2,193 2,193

2021‐2022 3,143 3,143

2022‐2023 4,223 4,223

2023‐2024 1,816 1,816

Total 15267 475 15743

TABLE 13.20: YEAR WISE FUND REQUIREMENTS WITH TAXES (Rs in Crore)

Year Completion Cost Land Cost Taxes Total Completion Cost

2017‐2018 588 238 92 918

2018‐2019 1265 238 198 1700

2019‐2020 2040 319 2359

2020‐2021 2193 343 2536

2021‐2022 3143 492 3634

2022‐2023 4223 660 4884

2023‐2024 1816 284 2100

Total 15267 475 2388 18130




TABLE 13. 21: YEAR WISE FUND REQUIREMENTS WITH CENTRAL TAXES (Rs in Crore)

Year Completion Cost Land Cost Taxes Total Completion Cost

2017‐2018 588 238 76 902

2018‐2019 1265 238 162 1665

2019‐2020 2040 262 2301

2020‐2021 2193 281 2474

2021‐2022 3143 403 3546

2022‐2023 4223 542 4765

2023‐2024 1816 233 2049

Total 15267 475 1959 17702

13.4.4 Additional Investment

To cater to increased traffic demand, investment will have to be made for purchase of

additional coaches and augmentation of maintenance infrastructure. The total additional

investment for additional Rolling Stock and related equipment to take care of the increased

traffic will be Rs. 263 Crore in the Years 2031 and Rs. 535 Crore in Year 2041 and Rs 586

Crore would be required in the year 2051.

13.4.5 Operation & Maintenance Costs

The details of O&M costs are given at Para 10.2 of this Chapter. The total O&M cost in the

year 2023 is estimated at Rs. 385 Crore. The total O&M cost in the year 2031is estimated at

Rs. 713 Crore.

13.4.6 Replacement Cost

The replacement costs are provided for meeting the cost on account of replacement of

equipments due to wear and tear. The replacement cost for the corridors is estimated to be

Rs. 3633 Crore in the year 2043. The year wise O&M cost and additional investments for two

MRTS corridors are presented in Table 13.22.

TABLE 13.22: OPERATION AND MAINTENANCE COSTS (Rs in Crore)

Year Staff Cost

(A)

Maintenance Expenses

(B)

Energy Charges

(C)

Total O&M Cost

(A+B+C)

Additional Rolling Stock / Replacement Cost

2023 123 65 197 385 0

2024 134 70 212 416 0

2025 146 75 228 449 0

2026 159 81 245 485 0

2027 173 87 264 524 0

2028 189 94 283 566 0

2029 206 101 305 611 0

2030 224 108 327 660 0

2031 244 116 352 713 263




13.4.7 Revenues

i. Projected Traffic Demand

The ridership on the proposed Varanasi metro system has been estimated at 5.09 Lakh

passenger trips per day in the year 2021 which will materialise by 2023 when MRTS comes in

operation. The ridership figures for key horizon years are given in Table 13.23. After 2041,

the traffic has been assumed to grow @ of 3% per annum.

TABLE 13.23: EXPECTED RIDERSHIP ON PHASE‐I MRTS CORRIDORS IN HORIZON YEARS

PASSENGER TRIPS PER DAY (Lakh)

Year CORRIDOR 1 CORRIDOR 2 TOTAL

2022 3.18 1.91 5.09

2032 4.20 2.52 6.72

2042 5.97 3.18 9.15

2032 266 125 419 810 0

2033 290 135 450 875 0

2034 316 145 484 945 0

2035 345 156 520 1021 0

2036 376 167 559 1102 0

2037 410 180 601 1191 0

2038 447 193 646 1286 0

2039 487 208 695 1389 0

2040 531 223 747 1501 0

2041 578 240 803 1621 535

2042 630 258 976 1864 0

2043 687 277 1049 2013 3633

2044 749 298 1127 2175 0

2045 816 321 1212 2349 0

2046 890 345 1303 2537 0

2047 970 371 1401 2741 0

2048 1057 398 1506 2961 0

2049 1152 428 1618 3199 0

2050 1256 460 1740 3456 0

2051 1369 495 1870 3734 586

2052 1492 532 2243 4267 0

2053 1627 572 2411 4609 0

2054 1773 615 2592 4979 0

2055 1933 661 2786 5379 0

2056 2107 710 2995 5812 0

2057 2296 764 3220 6279 0

2058 2503 821 3461 6785 0




ii. Trip Length Distribution

The trip length distribution has been taken on the basis of the available details on land use,

corridor composition and existing traffic characteristics in the catchment areas of various

sections of the corridor. Average trip length on the corridor is about 7.7 km. The trip length

distribution is given in Table 13.24 and Figure 13.1.

TABLE 13.24: TRIP LENGTH DISTRIBUTION

Trip Length (Km) % Distribution

0‐2 10.3%

2‐4 11.2%

4‐6 19.0%

06 – 09 22.0%

09 – 12 21.8%

12 – 15 9.0%

15 – 18 4.4%

18 – 21 1.0%

21 – 24 1.0%

>24 0.3%

Total 100%

FIGURE 13.1: EXPECTED TRIP DISTRIBUTION ON THE PROPOSED METRO CORRIDOR

iii. Fare Structure

LMRC has proposed a fare structure for Lucknow Metro for the year 2018 with the increase

by 10 % every 2nd year (Table 13.25). Same fare structure is being proposed to be adopted

for Varanasi Metro also.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0‐2 2‐4 4‐6 06 –09

09 –12

12 –15

15 –18

18 –21

21 –24

>24

Series1

Trip length Distribution




TABLE 13.25: MRTS FARE STRUCTURE FOR VARANASI METRO

Year Distance Slab (in Km)

0‐2 2‐4 4‐6 6‐9 9‐12 12‐15 15‐18 18‐21 21‐24 >24

2018 12 15 18 23 25 28 29 32 34 35

2019 12 15 18 23 25 28 29 32 34 35

2020 13 17 20 25 28 31 32 35 37 39

2021 13 17 20 25 28 31 32 35 37 39

2022 15 18 22 28 30 34 35 39 41 42

2023 15 18 22 28 30 34 35 39 41 42

2024 16 20 24 31 33 37 39 43 45 47

2025 16 20 24 31 33 37 39 43 45 47

2026 18 22 26 34 37 41 42 47 50 51

2027 18 22 26 34 37 41 42 47 50 51

2028 19 24 29 37 40 45 47 52 55 56

2029 19 24 29 37 40 45 47 52 55 56

2030 21 27 32 41 44 50 51 57 60 62

2031 21 27 32 41 44 50 51 57 60 62

2032 23 29 35 45 49 55 57 62 66 68

2033 23 29 35 45 49 55 57 62 66 68

2034 26 32 39 49 54 60 62 69 73 75

2035 26 32 39 49 54 60 62 69 73 75

2036 28 35 42 54 59 66 68 75 80 83

2037 28 35 42 54 59 66 68 75 80 83

2038 31 39 47 60 65 73 75 83 88 91

2039 31 39 47 60 65 73 75 83 88 91

2040 34 43 51 66 71 80 83 91 97 100

2041 34 43 51 66 71 80 83 91 97 100

2042 38 47 56 72 78 88 91 100 107 110

2043 38 47 56 72 78 88 91 100 107 110

2044 41 52 62 79 86 97 100 110 117 121

2045 41 52 62 79 86 97 100 110 117 121

2046 46 57 68 87 95 106 110 122 129 133

2047 46 57 68 87 95 106 110 122 129 133

2048 50 63 75 96 104 117 121 134 142 146

2049 50 63 75 96 104 117 121 134 142 146

2050 55 69 83 106 115 129 133 147 156 161

2051 55 69 83 106 115 129 133 147 156 161

2052 61 76 91 116 126 142 147 162 172 177

2053 61 76 91 116 126 142 147 162 172 177

2054 67 83 100 128 139 156 161 178 189 195

2055 67 83 100 128 139 156 161 178 189 195




iv. Other sources of revenues

Other sources of revenues considered are the advertisement and limited property

development within the stations. It is possible to raise resources through leasing of parking

rights at stations, advertisement on trains and tickets, advertisements within stations and

parking lots, advertisements on other metro structures, co‐branding rights to corporates,

film shootings and special events on metro premises. There could also be some revenue

from small kiosks at the stations including those for soft drinks, tea coffee, telecom

companies and bank ATM’s. This has been estimated at 10% of the fare box revenues during

operations.

13.4.8 Financial Internal Rate of Return

The project FIRR with the project costs including only Central taxes and projected revenue

has been worked out. Further, the security to Varanasi Metro may be provided through

CISF. Though the security cost is included in the Financial analysis, this may be borne by the

Government, thereby improving the FIRR to that extent.

Project FIRR for both the corridors combined works out to ‐0.32%. To make the project

viable as per MOUD norms, additional sources of revenue would be required to bring the

project FIRR >8%. The FIRR calculations are presented in Tables 13.26.




TABLE 13.26: PROJECT FIRR ‐ COSTS WITH CENTRAL TAXES WITHOUT PROPERTY DEVELOPMENT ( BOTH CORRIDORS)

(Rs in Crore)

Year Completion

Cost Land Cost

Total Taxes

Total Completion Cost

Fare Box Revenue

Revenue from Adv & PD

Gross Revenue O&M Cost

Additional Capital

Operational Surplus

2017‐18 588 238 76 902 0.00 0.00 0 -902

2018‐19 1265 238 162 1665 0.00 0.00 0 -1665

2019‐20 2040 262 2301 0.00 0.00 0 -2301

2020‐21 2193 281 2474 0.00 0.00 0 -2474

2021‐22 3143 403 3546 0.00 0.00 0 -3546

2022‐23 4223 542 4765 0.00 0.00 0 0 -4765

2023‐24 1816 233 2049 513 51 565 385 0 -1869

2024‐25 528 53 581 416 0 165

2025‐26 597 60 657 449 0 208

2026‐27 614 61 675 485 0 190

2027‐28 694 69 764 524 0 240

2028‐29 714 71 785 566 0 220

2029‐30 808 81 888 611 0 277

2030‐31 878 88 966 660 263 43

2031‐32 993 99 1092 713 0 379

2032‐33 1021 102 1123 810 0 313

2033‐34 1155 115 1270 875 0 395

2034‐35 1187 119 1306 945 0 361

2035‐36 1343 134 1477 1021 0 456

2036‐37 1381 138 1519 1102 0 416

2037‐38 1562 156 1718 1191 0 527

2038‐39 1606 161 1766 1286 0 480

2039‐40 1816 182 1998 1389 0 608

2040‐41 1924 192 2116 1501 535 81

2041‐42 2183 218 2401 1621 0 779

2042‐43 2116 212 2328 1864 3633 -3170

2043‐44 2398 240 2638 2013 0 624




Year Completion

Cost Land Cost

Total Taxes


Fare Box Revenue


Gross Revenue O&M Cost

Additional Capital

Operational Surplus

2044‐45 2470 247 2717 2175 0 542

2045‐46 2798 280 3078 2349 0 729

2046‐47 2882 288 3170 2537 0 633

2047‐48 3265 327 3592 2741 0 851

2048‐49 3363 336 3700 2961 0 739

2049‐50 3811 381 4192 3199 0 993

2050‐51 3925 393 4318 3456 586 275

2051‐52 4447 445 4892 3734 0 1157

2052‐53 4580 458 5039 4267 0 772

2053‐54 5190 519 5709 4609 0 1099

2054‐55 5345 535 5880 4979 0 900

2055‐56 6056 606 6662 5379 0 1282

2056‐57 6238 624 6862 5812 0 1050

2057‐58 7068 707 7774 6279 0 1495

2058‐59 7280 728 8008 6785 0 1223

15267 475 1959 17702 94748 9475 104223 81692 5017 -1411

IRR -0.32%




a) Value Capture from Real Estate

To make the project financially viable, value capture from real estate has been

explored. With the construction of metro, the cost of property/ land along the

corridor increases manifolds due to improved connectivity. Varanasi Development

Authority may decide to capture the value of real estate along the corridor to fund

the project.

UP government vide letter no 03/8‐3‐15‐198 vividh/14 dated 4th March has issued

guidelines for development along the transit corridors. As per these guidelines 60%

of the total area available with FAR 4 for property development shall be used for

commercial activity development and balance 40% shall be used for residential

activity development.

Estimation of revenue generated from Value capture is based on following

assumptions:

1. SPV will engage a developer for generating rental income. The developer will bring

equity of 25% and balance amount shall be raised by SPV as market debt.

2. The Development shall include both residential and commercial properties.

Residential properties will be for outright sale whereas commercial properties will

be given on rental basis.

3. For estimating revenue from property development, rental and sale rates for

commercial and residential properties have been worked out based on Circle Rates

of Varanasi. The rates assumed are Rs 30000/ sq mt for outright sale of residential

properties and Rs.400 /sq mt/ month as the rental rates for commercial properties.

4. Return to the developer: 14%

5. Lease rental rate would increase @ 5% every year.

6. The rate of interest for market debt will be 12%.

Possibility of property development along the MRTS corridors was explored with city

authorities in detail. Total 5 locations with plot area of 3.4 hectares have been identified

along the corridors for property development. As per GoUP guidelines on TOD, property

development @ 4 FAR has been assumed at these locations. Moreover, property

development over MRTS depot( on 12 hectares out of total of 15 Hectares of land ) has also

been assumed @ 3 FAR. Total of 4.97 Lakh Sq meters of space has been identified for

property development. Based on above assumptions, the total cost of the property

development will be Rs 1127 Crore. The developer will bring equity of Rs 282 Crore (25%)

and balance Rs 845 Crore ( 75%) would be raised from market. the rental income will accrue

from the year 2023‐2024 which has been escalated @5% every year. Out of the estimated

rental income, the developer will bear the maintenance expenditure, will repay the loan and

interest. after meeting these obligations and retaining 14% return on his equity the residual

rental earning will accrue to SPV. Escalation of 5% has been assumed on these calculations.

These earnings from PD have been taken into account in FIRR calculations. The details of

income from property development is given in Table 13.27.




TABLE 13.27: ESTIMATED RENTAL INCOME FROM PROPERTY DEVELOPMENT (Rs. in Crore)

Year Construction Costs

Rental Income

O&M Debt IDC Total Loan

Payment

Loan Repayment

Balance Loan

Amount

Interest

Return @ 14%

Residual Income to

SPV

17 ‐ 18 166 124 124 ‐47

18 ‐ 19 174 130 15 145 ‐47

19 ‐ 20 183 137 31 168 ‐47

20 ‐ 21 192 144 47 191 ‐47

21 ‐ 22 201 151 64 215 ‐47

22 ‐ 23 211 159 82 241 ‐47

23 ‐ 24 652 65 101 101 119 1067 12 39 417

24 ‐ 25 663 66 119 949 128 41 308

25 ‐ 26 233 23 119 830 114 43 ‐66

26 ‐ 27 245 24 119 711 100 46 ‐43

27 ‐ 28 257 26 119 593 85 48 ‐21

28 ‐ 29 270 27 119 474 71 50 3

29 ‐ 30 283 28 119 356 57 53 27

30 ‐ 31 298 30 119 237 43 55 51

31 ‐ 32 312 31 119 119 28 58 76

32 ‐ 33 328 33 119 0 14 61 101

33 ‐ 34 344 34 64 246

34 ‐ 35 362 36 67 258

35 ‐ 36 380 38 71 271

36 ‐ 37 399 40 74 285

37 ‐ 38 419 42 78 299

38 ‐ 39 440 44 82 314

39 ‐ 40 462 46 86 329

40 ‐ 41 485 48 90 346

41 ‐ 42 509 51 95 363

42 ‐ 43 534 53 100 381

43 ‐ 44 561 56 105 400

44 ‐ 45 589 59 110 420

45 ‐ 46 619 62 115 441

46 ‐ 47 650 65 121 463

47 ‐ 48 682 68 127 487

48 ‐ 49 716 72 134 511

49 ‐ 50 752 75 140 537

50 ‐ 51 790 79 147 563

51 ‐ 52 829 83 155 592

52 ‐ 53 870 87 162 621

53 ‐ 54 914 91 170 652

54 ‐ 55 960 96 179 685

55 ‐ 56 1008 101 188 719

56 ‐ 57 1058 106 197 755

57 ‐ 58 1111 111 207 793




v. Total Revenue

The total annual revenue through the fare box , property development and other sources for

the study corridors is given in Table 13.28.

TABLE 13.28: TOTAL REVENUE COLLECTION (Rs. in Crore)

Source of Revenue 2021 2031 2041

Fare Box Revenue 513 993 2183

Revenue from other Sources 51 99 218

Revenue from Real Estate 417 246 400

Total Revenue 982 1338 2801

13.4.9 Financial Internal Rate of Return

The project FIRR with the project costs including only Central taxes and property

development has been worked out. The FIRR of the project with limited identified property

development improves from ‐0.32% to 1.94 %.

To make the project viable as per MOUD norms, additional PD of 35 lakh sq mts (about 75

Ha land) would be required to bring the project FIRR at 8.12%.

The issue of availability of government land required to increase project FIRR was

discussed with city authorities and it was communicated that Varanasi being a old city and

availability of government land of this magnitude is not available.

Varanasi is a heritage city and attracts lot of international tourist throughout the year.

Considering the importance of the city, the provision of the good infrastructure facilities

becomes the responsibility of both the state and central governments. To further improve

project FIRR , it is proposed that both state and central governments each give 10% of the

project cost as grant to the project ( total 20%). This would be in addition to equity

contribution of both the governments.

With Grant scenario, The FIRR of the project without property development improves from

‐0.32% to 0.53 % and with property development of approximately 5 Lakh sq mts on

identified land along the corridor, the project IRR becomes improves from 1.94 % to 2.86%.

13.4.10 Conclusions

As per MOUD circular no K‐14011/1/2007‐UT‐IV dated 30th August 2013, FIRR of about 8% is

required for an Urban Mass Transit project. Varanasi MRTS project however, cannot support

itself and shall require Govt. support for implementation. With limited property

development and support from both state and central Governments, the project has positive

FIRR of 2.86%. Considering the special status of Varanasi city as heritage city and the need




of the city to have fast efficient mass transport system, it is recommended that the

condition of 8% FIRR may be relaxed and project is approved for implementation.

The FIRR calculations are presented in Tables 13.29.




TABLE 13.29: PROJECT FIRR BOTH CORRIDORS ‐ WITH PROPERTY DEVELOPMENT & GRANT FROM STATE AND CENTRRAL GOVERNMENTS (Rs in Crore)

Year Completion

Cost Land Cost

Total Taxes


Fare Box Revenue


Additional Revenue

Gross Revenue

O&M Cost Additional Capital

Operational Surplus

2016‐17 471 238 60 769 0.00 0.00 0 -769

2017‐18 1012 238 130 1380 0.00 0.00 0 -1380

2018‐19 1632 209 1841 0.00 0.00 0 -1841

2019‐20 1754 225 1979 0.00 0.00 0 -1979

2020‐21 2514 323 2837 0.00 0.00 0 -2837

2021‐22 3378 434 3812 0.00 0.00 0 -3812

2022‐23 1453 186 1639 -1639

2023‐24 513 51 417 982 385 0 596

2024‐25 528 53 308 889 416 0 473

2025‐26 597 60 -66 591 449 0 142

2026‐27 614 61 -43 632 485 0 147

2027‐28 694 69 -21 743 524 0 220

2028‐29 714 71 3 788 566 0 223

2029‐30 808 81 27 915 611 0 304

2030‐31 878 88 51 1017 660 0 357

2031‐32 993 99 76 1168 713 263 192

2032‐33 1021 102 101 1224 810 0 414

2033‐34 1155 115 246 1516 875 0 641

2034‐35 1187 119 258 1564 945 0 619

2035‐36 1343 134 271 1748 1021 0 727

2036‐37 1381 138 285 1803 1102 0 701

2037‐38 1562 156 299 2016 1191 0 826

2038‐39 1606 161 314 2080 1286 0 794

2039‐40 1816 182 329 2327 1389 0 938

2040‐41 1924 192 346 2462 1501 0 961

2041‐42 2183 218 363 2764 1621 535 608




Year Completion

Cost Land Cost

Total Taxes


Fare Box Revenue


Additional Revenue

Gross Revenue

O&M Cost Additional Capital

Operational Surplus

2042‐43 2116 212 381 2709 1864 0 845

2043‐44 2398 240 400 3038 2013 3633 -2609

2044‐45 2470 247 420 3137 2175 0 962

2045‐46 2798 280 441 3519 2349 0 1170

2046‐47 2882 288 463 3634 2537 0 1096

2047‐48 3265 327 487 4079 2741 0 1338

2048‐49 3363 336 511 4211 2961 0 1250

2049‐50 3811 381 537 4728 3199 0 1529

2050‐51 3925 393 563 4881 3456 0 1425

2051‐52 4447 445 592 5483 3734 586 1163

2052‐53 4580 458 621 5660 4267 0 1393

2053‐54 5190 519 652 6361 4609 0 1751

2054‐55 5345 535 685 6565 4979 0 1585

2055‐56 6056 606 719 7381 5379 0 2001

2056‐57 6238 624 755 7617 5812 0 1805

7068 707 793 8567 6279 0 2288

7280 728 1050 9058 6785 0 2273

12214 475 1568 14257 87468 8747 13633 117856 81692 5017 14617

IRR % 2.86




13.5 FUNDING OPTIONS

Metro Rail Projects are highly capital intensive with long gestation period. Given the tariff

constraints, they are not commercially attractive for investment. However, the MRTS project

have immense economic benefits to the society.

Experience all over the world reveals that both construction and operations of a metro are

highly subsidized and funded by the Government. Singapore had a 100% capital contribution

from the government, Hong Kong 78% for the first three lines and 66% for the subsequent 2

lines. Others run on Governmental support and subsidies. In India also the Phase‐I, Phase‐II

and Phase III of Delhi MRTS , Chennai, Bangalore Metros systems have been funded with a

mixture of equity and debt (ODA) by GOI and state governments. Thus, the involvement of

Government in the funding metro systems is foregone conclusion.

If commercial capital city of Utter Pradesh is to have Metro System on self sustainable basis,

it is necessary to keep down the capital cost as much as possible by way of giving

government land as grant /exempting taxes for the project and also required funding is made

available from the Government sources.

13.6 FINANCING MODELS ADOPTED IN INDIAN CITIES

The financing options depends on the selection of the dedicated agency created to

implemented to implement the project. Number of Indian cities have operational /under

construction MRTS system. Different financing models have been adopted for financing of

the MRTS system. These include

Government Funding

Special Purpose Vehicle (SPV) under the State Government Control

Public Private Partnership

Private sector

SPV model is the most successful model of metro funding and has been adopted in most

cities. Subsequent paragraphs discuss the Indian experience of MRTS funding.

13.6.1 Government Funding

As the name suggests, this funding model involves the complete funding of the metro

system by Central/State Government. Metro Railway, Kolkata has been funded on this

model. It is the first underground Metro Railway in India. The Metro Railway Kolkata was

constructed progressively from 1972 to 1995 by the Indian Railways who also operate the

system on a highly subsidized fare. The Metro Corridor has since been extended from Tolly

Ganj to Garia. Due to capital intensive nature of the metro systems and financial constraints

faced by the government, no metro system has been planned on this model after Metro Rail

Kolkata.

Detailed P

Final Report

13.6.2 S

U

v

p

G

a

o

S

l

C

t

f

K

K

G

1

b

c

i

D

D

c

e

l

J

e

s

roject Report f

t

SPV with Jo

Under SPV p

venture betw

project and

Government

a commercia

of the proje

State Govern

oan from

Corporation,

the example

financial mod

Kolkata Met

Kolkata Metr

Government

13.77 KMs of

by GOI & G

construction

n Figure13.2

Delhi Metro

Delhi Metro

capital city.

equity contr

ength was c

Japanese OD

equity and s

second phas

for Rail Based M

oint Ventu

pattern of fin

ween Centra

for its su

t of India and

al enterprise

ct cost as th

nment aggre

funding ag

, Chennai M

es of success

dels of these

tro (East We

ro Rail Corpo

t with equal

f metro. Ou

GOWB and

works are u

2.

FIGURE 1

Rail Corpora

The compan

ribution by t

commissione

DA loan thro

subordinate

e of DMRTS

Mass Transit Sy

ure Betwee

nancing patt

l Governme

ubsequent O

d State Gove

. As per the

heir equity c

egating the t

gencies. De

etro Rail Cor

s of such a S

e MRTS syste

st Corridor)

oration form

equity cont

t of the estim

the balance

under progre

13.2: FUNDIN

ation was es

ny was form

these two g

ed in a phas

ough JICA. T

debt apart

project cov

ystem in Varana

February, 20

en GOI & S

tern, a Speci

nt and State

Operation &

ernment ma

prevalent p

contribution

total equity

lhi Metro

rporation &

SPV. Subseq

em.

med as a Join

tribution by

mated total

e 45% is be

ess. The app

NG PATTERN

stablished in

ed as a Joint

overnments

sed manner.

The balance

from raisin

ering a dista

asi

CHAPTE

16

State Govt

ial Purpose V

e Governmen

& Maintena

ke equal eq

practice, Cen

n. An equal

to 40%. Rem

Rail Corpo

Kolkata Met

uent parVar

t Venture be

these two g

cost of Rs. 4

eing contrib

roved fundin

N OF KOLKAT

n 1995 to co

t Venture be

. The first

. About 60%

cost was co

ng funds fro

ance of 82.1

ER 13: COST EST

Vehicle (SPV

nt for the im

ance. Unde

uity contrib

tral Governm

amount ca

maining 60%

oration, Ban

tro Rail Corp

ranasiphs giv

etween GOI

governments

4676 crore, 5

buted by JIC

ng pattern o

TA METRO

onstruct met

etween GOI &

phase cove

% of the pro

ontributed b

m Property

1 KMs withi

TIMATES AND F

P

V) is set up a

mplementatio

r this arran

ution and ru

ment contrib

n be contrib

% is arrange

ngalore Me

poration are

ve the detai

& West Ben

s for constru

55% has been

CA ODA Loa

of the line is

tro rail syste

& GNCTD w

ring 65.1 KM

oject was fu

by GOI & G

Developme

n the Delhi

FINANCIALS

Page 13‐47

as a joint

on of the

ngement

un SPV as

bute 20%

buted by

d as soft

etro Rail

some of

ils of the

gal State

uction of

n funded

an. The

depicted

m in the

ith equal

Ms route

unded by

NCTD as

ent. The

Area has

Detailed P

Final Report

a

r

T

b

b

b

P

roject Report f

t

also been fun

raising of par

The extensi

been undert

being contrib

Delhi Metro

being implem

Phase ‐ III is d

for Rail Based M

nded by both

rt funding fro

on to Nation

taken by DM

buted by the

o Phase III n

mented with

depicted in F

FIGURE 13

FIGURE 13

FIGURE 13.

Mass Transit Sy

h the govern

om Property

nal Capital R

MRC as a dep

ese states.

etwork is o

loans from

Figure 13.3,1

3.3: FUNDIN

.4: FUNDIN

.5: FUNDING

ystem in Varana

February, 20

nments in the

y Developme

Regions (NCR

posit work w

of 103.5 Km

JICA. The fu

13.4, & 13.5.

G PATTERN

G PATTERN

G PATTERN O

asi

CHAPTE

16

e same patte

ent and inter

R) viz., Noida

with the enti

is expected

nding patter

.

OF DELHI M

OF DELHI M

OF DELHI ME

ER 13: COST EST

ern with JICA

nal accruals.

a, Gurgaon a

ire cost othe

d to cost Rs

rn of Delhi M

ETRO PHASE

ETRO PHASE

ETRO PHASE

TIMATES AND F

P

A funding of

and Vaishali

er than Rolli

s 35242 Cror

Metro Phase‐

E I

E II

E III

FINANCIALS

Page 13‐48

46% and

are also

ing Stock

re and is

‐I, II and

Detailed P

Final Report

B

B

K

c

b

J

h

B

t

C

C

T

c

4

O

f

roject Report f

t

Bangalore M

Bangalore M

Karnataka St

construction

been funded

JICA ODA Loa

has already

Bangalore fo

the line is de

Chennai Met

Chennai Me

Tamilnadu St

construction

40.78% has b

ODA Loan. T

funding patte

for Rail Based M

Metro

Metro Rail C

tate Governm

of 33 KM o

d by GOI & G

an. First Pha

enacted a l

or raising the

epicted in Fig

FIGURE 13.

tro

etro Rail Co

tate Govern

of 45.046 K

been funded

The construc

ern of the lin

FIGURE

Mass Transit Sy

Corporation

ment with e

f metro. Ou

GOKN and t

ase of projec

aw to charg

e funds requi

gure 13. 6.

.6: FUNDING

rporation h

ment with e

KM of metro

by GOI & GO

ction works

ne is depicte

E 13.7: FUND

ystem in Varana

February, 20

has been fo

equal equity

ut of the esti

he balance 4

ct has started

ge Rs. 2 a li

ired for Met

G PATTERN O

as been fo

equal equity

o. Out of t

OTN and the

of Phase‐I

d in Figure 1

DING PATTER

asi

CHAPTE

16

ormed as a

contribution

imated total

45% is being

d operation

tre on diese

ro Project. T

OF BANGALO

rmed as a

contribution

he estimate

e balance 59.

project is u

13.7.

RN OF CHENN

ER 13: COST EST

Joint Ventu

n by these t

cost of Rs.

g raised as s

recently. Th

el and petro

The approve

ORE METRO

Joint Ventu

n by these t

d total cost

.22% is being

under progre

NAI METRO

TIMATES AND F

P

ure between

wo governm

6395 Crore,

senior debt i

he state Gov

ol sold in th

ed funding p

ure between

two governm

of Rs. 1460

g contributed

ess. The a

FINANCIALS

Page 13‐49

n GOI &

ments for

55% has

including

vernment

e city of

attern of

n GOI &

ments for

00 Crore,

d by JICA

approved

Detailed P

Final Report

13.6.3 P

T

t

a

t

i

G

t

t

r

H

M

s

s

D

D

A

p

i

w

a

o

D

T

s

M

I

D

O

roject Report f

t

Public Priv

This model o

this model ,

and maintain

to cost of la

nfrastructur

Government

the project. T

to bid for su

range of 16‐1

However, In

Mumbai Line

systems. Sub

system.

Delhi Airport

DMRC has im

Airport and

private secto

mplemented

works with t

and DDA (54

operator wh

DMRC. The a

There have

system.

Mumbai Me

n contrast t

Delhi, Banga

Operate & Tr

for Rail Based M

vate Partne

of MRTS find

the private

ning the ent

nd only. Un

e projects,

t provided th

The metro b

ch a project

18% or a com

spite of the

e 1&2, and H

bsequent pa

t Line under

mplemented

further exte

or participat

d under a u

the funds be

4%) and the

o will operat

approved fun

been some

FIGURE

tro Line 1 &

to the SPV m

alore, Chenn

ransfer (BOO

Mass Transit Sy

ership

ding involves

firm will be

tire project.

nder Viabilit

MRTS pr

he state gov

eing a social

. Besides, th

mfort of guar

e constraint

Hyderabad M

rVaranasiph

PPP Model

d a High Spe

ension to Se

ion. The pro

unique mode

eing contribu

cost of syste

te the system

nding pattern

issues with

E 13.8: FUND

2

model adopt

nai & Kolkat

OT) model in

ystem in Varana

February, 20

s the private

responsible

The contribu

ty gap Fundi

roject is elig

vernment als

sector proje

he private op

ranteed ride

s of this fun

MRTS have a

s give the de

eed Airport

ector‐21, Dw

oject with an

el of PPP wh

uted by GOI,

ems and Rol

m for 30 yea

n of the line

h the conces

DING PATTER

ted for cons

a, the Maha

the city of M

asi

CHAPTE

16

e sector part

e for financin

ution of the

ng(VGF) sch

gible for VG

so contribute

ect not much

perator expe

rship.

nding model

adopted this

etails of the

Link from N

warka cover

n estimated

here in the

, GNCTD, De

lling Stock (4

rs, after whi

is depicted i

ssionaire an

RN OF AIRPO

struction of

arashtra gov

Mumbai. So

ER 13: COST EST

icipation on

ng designing

governmen

heme of Cen

GF up to 20

es same or

h private com

ects assured

l, Airport

model for f

financial m

New Delhi Ra

ing a distan

cost of Rs. 3

DMRC has

elhi Internati

46%) is being

ich the syste

n Figure 13.

nd DMRC is

ORT LINE

metro rail s

vernment ha

far, 2 lines c

TIMATES AND F

P

different m

g, building, o

t is generall

ntral Govern

0% from the

more funds

mpanies are

rate of retu

Line of Delh

financing the

odels of the

ailway Statio

nce of 22.7

3869 Crore h

undertaken

ional Airport

g met by the

em will rever

8.

now opera

system in th

as opted Bu

covering a dis

FINANCIALS

Page 13‐50

models. In

operating

y limited

ment for

e Central

towards

available

rn in the

hi Metro,

eir metro

ese MRTS

on to IGI

KM with

has been

the civil

t Limited

e private

rt back to

ating the

he city of

ild Own,

stance of

Detailed P

Final Report

4

c

8

V

a

M

L

R

i

L

i

H

G

G

c

b

C

p

m

roject Report f

t

44 KMs (Line

crore and Lin

8250 crore) h

Viability Gap

and Rs. 1532

Mumbai Met

Limited, a Re

Region Deve

mplement th

Line 1 is n

implementat

Hyderabad M

Hyderabad

Government

Gap Funding

corridors wit

build, and fi

Crore toward

project with

metro.

for Rail Based M

e 1 of 11.07 K

ne 2 of 32 KM

have been a

p Funding by

2 crore for Lin

tro One Priv

eliance ADA G

elopment Au

his project. F

ow operati

tion mechan

FIGURE 13

Metro

Metro is t

of India. Go

g (VGF) sche

th total lengt

nance, oper

ds land acqu

grant of 1

FIGURE 13

Mass Transit Sy

KMs from Ve

Ms from Cha

warded to p

GOI & Maha

ne 1 & Line 2

vate Limited

Group Comp

uthority (MM

Figure 13.9 g

ional. There

nism for Line

3.9: FUNDIN

the first PP

oAP has unde

eme of GoI.

th of about

rate and tra

uisition, R&R

1,458 Crore a

3.10: FUNDI

ystem in Varana

February, 20

ersova – And

arkop – Band

private opera

arashtra Stat

2 respectivel

is a Joint Ve

pany, Veolia

MRDA) incor

gives the fun

e are some

e 2 is being re

NG PATTERN

PP Metro R

ertaken the H

The MRTS

71 km. The

ansfer (DBFO

R package, sh

as VGF. Figur

NG PATTERN

asi

CHAPTE

16

heri ‐ Ghatk

dra – Manku

ator for cons

te Governme

y.

enture Com

Transport, F

porated und

ding pattern

e issues wit

evisited.

N OF MUMBA

Rail Project

Hyderabad M

network in

Project is be

OT) basis. G

hifting of ut

re 13.10 give

N OF HYDER

ER 13: COST EST

opar with a t

urd with an e

struction and

ent to the ex

pany formed

rance and M

der the Com

n of Mumbai

th the conc

AI METRO LI

that has b

Metro Rail Pr

clude three

eing execute

oAP will spe

ilities and G

es the fundin

RABAD METR

TIMATES AND F

P

total cost of

estimated co

d operation

xtent of Rs. 6

d by Relianc

Mumbai Metr

mpanies Act,

Metro Line

cessionaire

NE 1

been sanctio

roject under

high densit

ed by L&T on

end another

GOI will sup

ng plan of Hy

RO

FINANCIALS

Page 13‐51

Rs. 2356

ost of Rs.

by giving

650 crore

e Energy

ropolitan

1956 to

1.

and the

oned by

r Viability

ty traffic

n design,

r 1,980

pport the

yderabad




13.6.4 Private Sector

Gurgaon's Rapid Metro project is India’s first fully privately financed metro. With the project

cost of Rs 1100 crore, it has a network of 5.1 km connecting Cyber City, NH‐8 & Sikanderpur

station (DMRC) in Phase I. The planned route for Rapid Metro acts as a feeder to the MRC’s

Jahangirpuri‐Central Secretariat‐HUDA City Centre (Yellow Line). A special purpose vehicle

(SPV), Rapid Metro Rail Gurgaon Limited (RMGL) was formed to construct, operate and

maintain the metro.

The Indian experience of Metro Rail projects funding suggests that those implemented on

SPV model have been more successful than those implemented with private sector

participation. Under SPV model, extensive government funding support is required either

directly as equity and subordinate debt or through government guaranteed Japanese ODA

loan from JICA. Accordingly, SPV model for funding of Varanasi MRTS is being proposed.

13.7 FINANCING OPTIONS FOR VARANASI MRTS

13.7.1 Equity

Under DMRC/BMRC pattern of financing pattern, a Special Purpose Vehicle (SPV) will be set

up for the implementation of the project and for its subsequent Operation & Maintenance.

Under this arrangement Government of India and Government of Utter Pradesh (GoUP)

shall make equal contribution and run SPV as a commercial enterprise. As per the prevalent

practice, Central Government may be willing to contribute 20% of the project cost as their

equity contribution. An equal amount can be contributed by GoUP aggregating the total

equity to 40%. For the balance 60% funding requirement, options available are as follows: ‐

13.7.2 Debt

The balance cost can be met through loans from various bilateral partners, Local borrowing,

loans from ADB/World Bank and Suppliers Credit.

Official Development Assistance from Bilateral Partners : ‐ Department of Economic

affairs, Ministry of Finance, Government of India has issued policy guidelines no

3/11/2015‐PMU on official Development Assistance for development cooperation with

bilateral partners. This assistance can be availed can be availed of for metro rail projects.

The prevailing interest rate is 0.3% p.a. The loan is repayable in 40 years including

moratorium period of 10 years. The loan assistance is for the total project cost excluding

taxes and land costs. The loan is provided to Central Government which in turn releases the

same to SPV under a Pass Through Assistance (PTA) mechanism.

Since the loan is generally in currency of lending country, any fluctuation in exchange rate at

the time of repayment are generally borne by the Central Government and GoUP in

proportion to which their share holding. The loan in equivalent INR shall be repaid by SPV

from the income streams of metro operations.




Loan from Asian Development Bank (ADB)/World Bank: ‐ The Loan may also be available

from ADB/World Bank. As per the information available, the loan from World Bank/ ADB is

available to GOI at LIBOR + 2 % per annum. It is considered that the loan shall be passed to

project without any additional charges/ administration cost. At present 12 month LIBOR for

USD is 0.5%.

Domestic Loan from Banks and Financial Institutions: ‐ Funds can be arranged from Indian

Financial Institutions like India Infrastructure Finance Company Limited (IIFCL), India

Development Financing Corporation (IDFC), Life Insurance Corporation of India (LIC), State

Bank of India, IDBI Bank, ICICI Bank Ltd etc. These institutions are increasingly engaged to

fund infrastructure projects subject to their commercial viability. There are many models

available under which the funds can be arranged by these financial institutions with or

without syndicating with other commercial banks. IIFCL e.g. fund 20% of the project cost

and arrange balance through the syndication of commercial banks with a lead banker

among the consortium of bankers. The loan can be given for a period of 20‐30 years with

interest rate ranging from 9.50% to 12% PA. The funding arrangement may require

submission of central government guarantee as well. Since the rate of interest of these

financial institutions is much higher than the interest rates of soft loan provided by JICA,

Central Government and GoUP shall have to bear the interest difference and provide

subsidy to the SPV.

(ii) Subordinate Debt: ‐ For existing Phase‐I , Phase‐II & Phase III projects of Delhi Metro,

land and rehabilitation and resettlement cost have been borne by GOI & GNCTD equally as

interest free subordinate debt. This mezzanine financing is of extreme help in quickening

the pace of the project. In this project Subordinate debt can be procured to pay back state

and central taxes and duties. The loan is of longer duration and becomes repayable only

after other loans raised for the project are repaid.

13.7.3 Involvement of the Government

Government contribution is essential to keep debt‐servicing levels low ‐ with a view to

maintain overall long term sustainability of the system. Government involvement also

generates considerable amount of confidence in other players involved in the process of

construction & operation. The capital investment of Varanasi MRTS is estimated to give an

economic rate of return to the tune of 15 % and the city/society can recover the investment

within 7 to 8 years time. The involvement of Government is very much essential to provide

integrated, efficient public transport system in the Varanasi. Apart from financial support,

social considerations require the involvement of the government to ensure a minimum

essential level of service to the society. The project serving primarily a social purpose/goal,

is needed for improving the overall health of the city.




13.8 PROPOSED FUNDING FOR THE PROJECT

The total cost of the project including central taxes and land at January '2016 has been

estimated at Rs 12,350 Crore including Rs 1405 Crore towards Central taxes and duties.

i. Grant by State and Central Governments

Considering the importance of the project, it has been assumed that both state and central

governments will give grant to the extent of 10% of the project cost. Accordingly project will

receive Rs 1235 Crore as grant with both the governments amounting to Rs 2470 Crore.

For remaining cost of Rs 9880 Crore at January'2016 prices, the completion costs works out

to Rs 13,781 Crore. Rs 475 Crore of land cost would be extra.

The funding pattern under SPV model would be as under:

ii. Government Contribution

GOI & GOUP to contribute equity of Rs. 5513 Crore which is 40 % of the total completion

cost excluding land. This means that both GOI will share 20 % of the total cost amounting to

Rs. 2756 Crore which includes Rs 2066 Crore (15%) as equity and Rs 691 Crore ( 5%) as

subordinate debt for central taxes. GOUP will also contribute equal amounts towards

equity and subordinate debt for central taxes. In addition GOUP will provide subordinate

debt of Rs 475 Crore towards land required for the project.

iii. Contribution by Local Bodies

Through means of innovative financing, Local bodies will contribute Rs 200 Crore (1.45%)

towards project completion cost

iv. Soft Loans from funding agencies

Remaining project cost of Rs 8069 Crore ( 58.55%) of total completion cost to be funded

through soft loans from funding agencies. The proposed loan shall be tied loan with interest

rate of .03% and payback period of 40 Years including 10 years of moratorium.

In addition to above state taxes of Rs 343 Cr on completion costs basis for both the

corridors has to be reimbursed or exempted by State Government.

Figure 13.11 gives the proposed funding pattern and the Table 13.30 gives the year wise

funds requirement from different sources




FIGURE 13.11: PROPOSED FUNDING PATTERN UNDER SPV MODEL

TABLE 13.30: PROPOSED FINANCING OF PROJECT

(Rs in Cr)

PARTICULARS CORRIDOR 1 CORRIDOR 2 BOTH CORRIDORS

AMOUNT % AMOUNT % AMOUNT %

Equity by GoI 1396 14.99 670 14.99 2066 14.99

SD for CT by GoI 467 5.01 224 5.01 691 5.01

Equity by Govt of UP 1396 14.99 670 14.99 2066 14.99

SD for CT by Govt of UP 467 5.01 224 5.01 691 5.01

Contribution by Local Bodies 135 1.45 65 1.45 200 1.45

Loan by JICA 5453 58.55 2615 58.55 8069 58.55

Total Cost Excluding Land 9314 100 4467 100 13781 100

SD for land by Govt of UP 438 37 475

GRAND TOTAL 9752 4504 14256

13.8.1 Recommendations

With above funding option as per the detail cash flow given in Tables 13.31, it can be seen

that with property development the project has positive cash flows. Thus, the project has

potential to service its debts liabilities.

It is accordingly recommended that Varanasi MRTS is taken up for implementation.

14.99

5.01

14.99

5.01

1.45

58.55

EQUITY BY GOI

SD FOR CT BY GOI

EQUITY BY GUP

SD FOR CT BY GUP

CONTRIBUTION BY LOCAL BODIES

SOFT LOANS




TABLE 13.31: CASH FLOW STATEMENT FOR VARANASI MRTS FOR GRANT SCENARIO (Rs in Crore)

Year Project

Completion Cost

O&M Cost Additional & Replacement

Capital DPRCN

Total Costs

Fare box PD

&ADVT Total

Revenue

Net Cash Flow

Equity From GOI & GOUP &Stake Holder

Contribution

Availability Of Cash

Cumulative Cash Cum Loan Loan Loan

Repayment IDC

Cumulative Loan

Including IDC

Interest PBT Cash

BalanceCumulative

Cash

2017‐2018 209 209 ‐209 209 0 0 0 0

2018‐2019 1431 1431 ‐1431 1431 0 0 0 0

2019‐2020 2403 2403 ‐2403 2403 0 0 0 0

2020‐2021 3450 3450 ‐3450 2145 ‐1305 ‐1305 1305 1305 2 1307

2021‐2022 3461 3461 ‐3461 ‐3461 ‐4765 4765 3461 9 4776

2022‐2023 2194 2194 ‐2194 ‐2194 ‐6959 6959 2194 20 6988

2023‐2024 800 385 0 306 1185 513 468 982 ‐204 ‐800 ‐7759 7759 800 7790 21 269 575 575

2024‐2025 310 416 0 326 726 528 361 889 163 ‐310 ‐8069 8069 310 8099 23 123 450 1025

2025‐2026 449 0 315 449 597 ‐6 591 142 ‐8069 8099 24 ‐198 117 1142

2026‐2027 485 0 304 485 614 18 632 147 ‐8069 8099 24 ‐181 123 1265

2027‐2028 524 0 293 524 694 49 743 220 ‐8069 270 7829 24 ‐98 195 1460

2028‐2029 566 0 283 566 714 74 788 223 ‐8069 270 7559 23 ‐84 199 1659

2029‐2030 611 0 273 611 808 107 915 304 ‐8069 270 7289 23 8 281 1941

2030‐2031 660 0 264 660 878 139 1017 357 ‐8069 270 7019 22 71 335 2276

2031‐2032 713 263 254 713 993 175 1168 455 ‐8069 270 6749 21 180 434 2710

2032‐2033 810 0 245 810 1021 203 1224 414 ‐8069 270 6480 20 148 394 3104

2033‐2034 875 0 246 875 1155 361 1516 641 ‐8069 270 6210 19 375 621 3725

2034‐2035 945 0 237 945 1187 377 1564 619 ‐8069 270 5940 19 363 600 4325

2035‐2036 1021 0 229 1021 1343 405 1748 727 ‐8069 270 5670 18 480 709 5035

2036‐2037 1102 0 221 1102 1381 423 1803 701 ‐8069 270 5400 17 463 684 5719

2037‐2038 1191 0 213 1191 1562 455 2016 826 ‐8069 270 5130 16 596 809 6528

2038‐2039 1286 0 206 1286 1606 474 2080 794 ‐8069 270 4860 15 572 778 7306

2039‐2040 1389 0 199 1389 1816 511 2327 938 ‐8069 270 4590 15 724 923 8229

2040‐2041 1501 0 192 1501 1924 538 2462 961 ‐8069 270 4320 14 756 947 9177

2041‐2042 1621 535 185 1621 2183 581 2764 1142 ‐8069 270 4050 13 944 1130 10306

2042‐2043 1864 0 179 1864 2116 593 2709 845 ‐8069 270 3780 12 654 833 11139

2043‐2044 2013 3633 191 2013 2398 640 3038 1025 ‐8069 270 3510 11 822 1013 12153

2044‐2045 2175 0 184 2175 2470 667 3137 962 ‐8069 270 3240 11 768 952 13105

2045‐2046 2349 0 305 2349 2798 721 3519 1170 ‐8069 270 2970 10 856 1161 14265

2046‐2047 2537 0 294 2537 2882 752 3634 1096 ‐8069 270 2700 9 793 1088 15353

2047‐2048 2741 0 284 2741 3265 813 4079 1338 ‐8069 270 2430 8 1045 1330 16682

2048‐2049 2961 0 274 2961 3363 847 4211 1250 ‐8069 270 2160 7 968 1242 17925

2049‐2050 3199 0 265 3199 3811 918 4728 1529 ‐8069 270 1890 6 1258 1523 19448

2050‐2051 3456 0 255 3456 3925 956 4881 1425 ‐8069 270 1620 6 1164 1419 20867

2051‐2052 3734 586 246 3734 4447 1036 5483 1749 ‐8069 270 1350 5 1498 1744 22611

2052‐2053 4267 0 238 4267 4580 1079 5660 1393 ‐8069 270 1080 4 1151 1389 23999

2053‐2054 4609 0 250 4609 5190 1171 6361 1751 ‐8069 270 810 3 1498 1748 25748

2054‐2055 4979 0 241 4979 5345 1219 6565 1585 ‐8069 270 540 2 1342 1583 27330

2055‐2056 5379 0 233 5379 6056 1325 7381 2001 ‐8069 270 270 2 1767 2000 29330

2056‐57 5812 0 225 5812 6238 1379 7617 1805 ‐8069 270 0 1 1579 1804 31134

2057‐58 6279 0 217 6279 7068 1499 8567 2288 2071 2288 33422

2058‐59 6785 0 209 6785 7280 1778 9058 2273 2064 2273 35695




13.9 IMPLEMENTATION PLAN

13.9.1 Institutional Arrangements

Effective institutional arrangements are needed to enable the Metro project to be

implemented without any loss of time and cost over‐run. The details of possible

arrangements are discussed in following sections.

Setting Up of Special Purpose Vehicle (SPV)

Experience of implementing Delhi Metro project has shown that a Special Purpose Vehicle

(SPV), vested with adequate powers, is an effective organizational arrangement to

implement and subsequently operate and maintain a metro rail project.

SPV named VMRC (Varanasi Metro Rail Corporation Ltd.) shall be incorporated with the

mandate “To establish, Operate and Maintain Guided Urban Transit Systems in and around

Varanasi City so as to meet the urban transport needs of Varanasi”. This SPV with a board of

directors may implement the Varanasi Metro project.

Metro construction is a very specialized and multi‐disciplinary job. It is therefore, impossible

to have a single organizational set up which can be responsible for all aspects of metro

implementation, namely investigation, planning, design, drawing up of specifications,

preparation of tender documents, fixing of contractors, supervising the contractors’ works,

ensuring interface fusion between different contractors, ensuring quality and safety during

constructions, planning and supervising integration system trials and getting the project

commissioned in time.

It is suggested to have a two tier organization with well‐defined responsibilities for getting

this project executed. At the apex will be the VMRC ‐ a lean but effective organization with

full mandate and total power – with accountability. The second level will be a project

management team called “General Consultants” who will be engaged by the VMRC on

contract basis and who will be fully responsible for planning, design and project

management. In fact they will be the “Engineers” for the VMRC, who is the “Client”. The

detailed design consultants as required may be engaged by General Consultants as their Sub‐

Consultants within their own contract responsibilities. Since most of the alignment length is

elevated, it is recommended that the contracts be made on “design and build” basis, based

on broad technical specifications and performance requirements drawn up by the G.C.

International Consultants are very expensive and should be engaged only in area where

Indian experts cannot manage and they should invariably be part of the General Consultants’

team.

High Power Committee

During the implementation of the project several problems with regard to acquisition of

land, diversion of utilities, shifting of structures falling on the project alignment,




rehabilitation of project affected persons, etc. are likely to arise. For expeditious resolution of

these problems, an institutional mechanism needs to be set up at the State Government

level. Towards this end, it is recommended that a High Power Committee under the

chairmanship of Chief Secretary, Uttar Pradesh should be set up. Other members of this

Committee may be the Secretaries of the concerned Departments of the State Government

and Heads of civic bodies who will be connected in one way or the other with the

implementation of the project. Commissioner, Varanasi and Municipal Commissioner,

Varanasi Nagar Nigam should also be the member of this committee.

This Committee should meet once a month and sort out all problems brought before it by

VMRC and VDA. For Delhi Metro also, such a High Power Committee was set up and it proved

very useful in smooth implementation of the Delhi Metro rail project.

Empowered Committee

At the Central Government level an Empowered Committee, under the chairmanship of

Cabinet Secretary, is presently functioning for Delhi Metro project. Other members of this

Committee are Secretaries of Planning Commission, Ministry of Home Affairs, Ministry of

Urban Development, Ministry of Road Transport and Highways, Ministry of Environment

and Forests, Department of Expenditure, Chief Secretary of Delhi Government and a

representative from the PMO. The Empowered Committee meets regularly and takes

decisions on matters connected with inter‐departmental coordination and overall

planning, financing and implementation of the Delhi Metro project.

It is suggested that the role of this Empowered Committee is enlarged to include Varanasi

Metro project also and the Chief Secretary, Uttar Pradesh should be inducted as a

member of this Committee.

Implementation Schedule

SPV may initiate action for appointment of General Consultants for project management

including preparation of tender documents – as soon as the DPR is approved by GoUP and

the project is approved for construction. The possible dates of important milestones are

given in Table 13.32.

TABLE 13.32: PROJECT IMPLEMENTATION SCHEDULE

S.N. Tasks Timelines

1 Final DPR February, 2016

2 State Government Approval of DPR April, 2016

3 In Principle Approval by GoI July, 2016

4 Appointment of Interim Consultant September, 2016

5 Appointment of DDC for Civil Works September, 2016

6 Packaging and Invitation of Bids for Priority Section* October, 2016




S.N. Tasks Timelines

7 Final Approval of GoI January, 2017

8 Commencement of Civil Works on Priority Section February, 2017

9 Completion of Project March, 2023

BHEL to Benia Bagh Section of about 15.0 Km shall be taken up on priority for

construction.

The commercial operation on Phase‐I corridors may start from March 2023 after providing

about 5.5 years for construction and 6 months for safety audit and certification.

13.9.2 Concessions from Government

Metro rail projects need very heavy investment. Loans have invariably to be taken to fund a

part of the capital cost of the projects. These projects yield low financial internal rate of

return though their economic internal rate of return is very high. With reasonable fare levels,

servicing of these loans often pose problems. To make the project financially viable, the fares

need to be substantially increased to socially un‐acceptable levels. This results in the

ridership coming down significantly, as it is sensitive to increases in the fare level. Thus, the

very objective of constructing the metro rail system to provide an affordable mode of mass

travel for public is defeated. It therefore becomes necessary to keep the initial capital cost of

a metro project as low as possible so that the fare level of the metro system can be kept at

reasonable level.

Experience of Delhi Metro project has shown that the taxes and duties (including custom

duty, Excise Duty, Sales Tax, Taxes on electricity, Municipal Taxes) constitute about 15 – 16%

of a metro project cost. VMRC may try to get exemption from these for the implementation

of this important infrastructure project.

Custom Duty on all imported rolling stock and other equipment needed for

the project.

Excise Duty on all indigenously manufactured rolling stock and other

indigenously finished goods required for the project.

Sales Tax on all purchases made for implementation of the project whether

directly by the project implementation authority or by the contractors

executing the project.

Sales Tax on works contracts to be executed for the implementation of the ‐

project.

Tax on electricity required for operation and maintenance of the metro

system.




Municipal Taxes.

Further, the transfer of Govt. land required for the project could be considered free of cost or

at the most at Govt. rates. The cost of private land could also be recovered through TDRs and

higher FARs.

VMRC may consider roping in more stakeholders, who would directly/ indirectly benefit from

the system, for partly sharing the cost of metro construction.

Additional taxes due to improved accessibility, higher property rates (as a result of metro

availability) may also be considered in the immediate influence area of metro corridor.

13.9.3 Way Forward

On acceptance of the Detailed Project Report by VDA, the following action may be initiated

for implementing the Varanasi Metro:

Approval of State Government (Cabinet Approval) to the Detailed Project Report.

Issue of notification for the project and alignment.

The DPR to be forwarded to the Ministry of Urban Development, Planning Commission

and Finance Ministry with the request for approving the Metro project and for financial

participation through equity contribution to the SPV.

Land acquisition related issues.

Examination and appraisal of DPR by bilateral/multilateral funding agencies for possible

funding.

Stakeholder consultation on environmental and social impact of the project.

Signing of an MOU between Uttar Pradesh State Government and Government of India.

giving all details of the Joint Venture bringing out the financial involvement of each party,

liability for the loans raised, the administrative control in the SPV, policy in regard to fare

structure etc.

Loan approval

Set up the Special Purpose Vehicle (SPV) VMRC (Varanasi Metro Rail Corporation Ltd.) for

implementing the project and for its subsequent Operation and Maintenance.

Appointment of General Consultants (G.C.) for the project.

Providing legal cover for construction as well as O&M stages of the project.

Agreement between the State and Central Government for financing the debt portion of

the project along with the setting up of time frame for completing the project.

Packaging and invitation of bids for various contracts.

13. COST ESTIMATES AND FINANCIALS · 2019-02-13 · works, rolling stock, environmental protection, rehabilitation, etc. at Jan’ 2016 price level. While preparing the capital cost

Documents