Mumbai Metro Line1 Public Private Partnership in Urban Rail Transit Kapil Kumar Sinha 15554006 M.Tech(IFS)
Mumbai Metro Line1
Public Private Partnership in Urban Rail Transit
Kapil Kumar Sinha 15554006
M.Tech(IFS)
First corridor of the proposed MRTS by Government of Maharashtra through MMRDA.
Elevated line of 11.4 km. from Versoa to Ghatkopar connecting 12 stations.
Connects the East Suburb to West suburb of the city reducing time of travel up to 70 minutes.
Project Brief
Mumbai Metro Line1
Project Cost : Rs. 2356 croreConcession Period : 35 years
PPP Structure : BOOT
PPP Structure BOOT ( Build Own Operate Transfer Transfer) operator has to design, finance, construct,
operate, own and maintain and transfer the ownership and assets at the end of the concession period.
Concession Period : 35 Years. Construction Period : 5 Years.
Reliance Energy Limited
69%
Veolia Transport
5%
MMRDA26%
Equity Stakes of mmopl
Special Purpose Vehicle (SPV) : Mumbai Metro One Private Limited (MMOPL)
The MMRDA contribute equity of Rs. 134 and have 3 members on the board of the SPV and ensured that it would be able to effectively monitor and influence decisions on financing, design and construction for the project.
PPP StructureMumbai Metro One Private Limited (MMOPL) owns Viaduct Stations Bridges Depot Rolling stock Signaling system, Traction and Supervisory Control Data Acquisition (SCADA) system Communications systems Track work Fare collection system
The land for the depot has been taken on a long term lease which is renewable from the owners of the land.
Financing Information Total Project Cost : Rs. 2,356 crores. Viability Gap Funding : Rs. 650 crores
VGF 27.5% MMRDA + Private 72.5%Rs.650 crores Rs.1706
crores
Government of IndiaRs.650 crores (20% of project cost)
GOI
GOMGovernment of MaharashtaRs.180 crores (7.5% of project cost)
Rs.1240 crores arranged by private operator
Debt 70%
Rs.466 crores by private operator and MMRDA as per equity stake
Equity 30%
ConsortiumIDBI, Corporation Bank, Karur Vysya bank, Canara Bank, Indian Bank and Oriental Bank of Commerce.
DEBT arranged by private operators
Financing Information The cost of borrowing for the rupee component, which constitutes about 75 per cent
of the total debt, will be 12.25 per cent, while the foreign currency loan will be at 3.5 per cent above LIBOR (London Inter-Bank Offered Rate)
IIFCL (U.K.) is providing the foreign currency loan for the project.
The loan has been secured for a moratorium period of 2 years and a total loan repayment period of 15 years.
The project has also taken into consideration a service debt facility of around Rs. 70-80 crore
Rupee
Foreign Currency
DevelopmentThe development phase of the project was initiated in parallel to the VGF approval process. Major milestones achieved in the development phase are presented below: The SPV was incorporated in December 2006. The Engineering and Project Management Consultants, a consortium
of Parsons Brinkerhoff (USA) and Systra SA (France) joined the team on February 14, 2007
Signing of the Concession Agreement and Shareholders agreement took place on March 7, 2007
MMOPL and Government of Maharashtra entered the State Support Agreement on April 20, 2007
Construction commenced on February 8, 2008 Financial Closure for the project completed on October 3, 2008 Completed and opened for public use on 8th June, 2014.
Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Delays in land acquisition
High 0-5 years Government
Financing Risks Medium 0-5 years Private Sector
Planning Medium 0-5 years Private Sector
Regulatory, administrative & approval delays
Low 0-5 years Private Sector
PRE-OPERATIVE RISKS
Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Design Risk Medium 0-5 years Private Sector
Construction Risk Medium 0-5 years Private Sector
Change in Scope Risk
Low 0-5 years Government
Financing Risk Medium 0-5 years Private Sector
CONSTRUCTION PHASE RISKS
Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Technology Risk Low 0-35 years Private Sector/Government
Operations & Maintenance Risk
Medium 0-35 years Private Sector
Market Risk Low 0-30 years Private Sector
Performance Risk Medium 0-30 years Private Sector
OPERATIONAL PHASE RISK
Risk allocation frameworkRisk Type Sensitivity Risk Period Primary Risk BearerHandover Risk Low 35th years Private Sector
Private Operator Event of Default
Low 0-35 years Private Sector
MMRDA Event of Default
Low 0-35 years Government Sector
HANDOVER RISKS
Risk Type Sensitivity Risk Period Primary Risk Bearer
Interface Risk (with other metro corridors)
Medium Throughout Private Sector
Force Majeure Low Throughout SharedChange in Law Risk Low Throughout Private Sector
OTHER RISKS
Ridership and Fare Structure
2014 2021 20310
1
2
3
4
5
6
7
8
9
10
Ridership in lakh per day
Present- 3 lakh per day 2021- 6.65 lakhs per day 2031- 8.83 lakhs per day
Fare fixed by MMOPL under first committee are Rs. 10 to Rs.110 but discounted fare are taken due to order i.e. Rs. 10 to Rs. 40. Monthly fare for is from Rs.675 to Rs.900
Learnings
Delay in Obtaining VGF approval. Delay in approvals can potentially derail the project. Land Acquisition process can lead to issues in the project. Clear Specifications on Asset Transfer on termination. Public Support for the project. Role of Good Project Preparation.
References http://toolkit.pppinindia.com/urban-transport/module3-rocs-mm8.php https://mmrda.maharashtra.gov.in/metro-line-1 Public Private Partnership projects in India Compendium of Case Studies http://www.reliancemumbaimetro.com/fares.h