A consortium of ITNL ENSO Rail Systems Ltd (IERS), a group company of IL&FS and real estate major DLF, has emerged the sole bidder for the 3.2-kilometre Gurgaon Metro rail project being implemented through public-private partnership (PPP) by the Haryana Urban Development Authority (HUDA).
This is the second project in the country in which a metro rail project is being undertaken through a PPP model after the 71-kilometre Hyderabad metro project was won by Maytas Infrastructure.
According to industry sources, infrastructure major Larsen & Toubro (L&T) had also initially shown interest for the project, but backed out finally.
The Rs 1,000-crore project envisages the development of a metro link for providing last-mile connectivity from Delhi Metro’s Sikanderpur station on MG Road to NH-8 over a 60-metre-wide sector road (Vishwakarma Marg), where DLF Cybercity is located. The project provides further scope of extending the metro link to sector 55-56 in south Gurgaon and Udyog Vihar and Sector 21 Dwarka in the north.
Under the request for proposal (RFP), the contract was to be awarded to a company which would offer HUDA the highest revenue share of advertising and real estate rental which it earns from the project. However, it does not have to share revenue of the fare it collects. HUDA has offered 250 square metres of floor area in each of the six stations which the concessionaire can rent out to kiosks and retail outlets. The concession period is for 99 years. The land, however, would be owned by the Haryana government which would give it on lease to the concessionaire.
The two players are planning to set up a special purpose vehicle in which IERS will have 74 per cent equity holding, while the rest will be with real estate major DLF. The entire debt component of the project will be raised by IERS.
Sanjiv Rai, MD & CEO of IERS, said: “Yes, we are the sole bidder for the Gurgaon Metro rail project. We are awaiting the approval from the Haryana Urban Development Authority. Once the approval is received, we are expecting to achieve the financial closure of the project in the next six to eight months.”
However, the company has not yet decided the debt equity ratio. “The debt equity ratio will be more similar to other infrastructure projects. However, a final decision will be taken only after consulting our bankers and seeing the market condition,” said Rai.
The company will be required to finance, design and construct all the civil works. The concessionaire is also required to procure and install all systems including the rolling stocks, overhead electrification, track, signalling and telecommunication, ventilation, air-conditioning, automatic fare collection, depot and other systems and facilities required for a successful metro link.
Tax experts say valuation of shares is a grey area and may lead to litigation
Earlier, the committee was given a year to submit its report