DLF not investing completion by mid-2013Dilasha Seth / New Delhi Apr 12, 2012
The rapid metro rail service for Gurgaon, conceived as a joint venture project of DLF and IL&FS, is set to become functional from mid-2013. It is to be fully funded by IL&FS, with DLF not investing, both companies have confirmed.
IL&FS is interested in establishing a privately-run metro model in cities through the country, besides extending the 6.1-km stretch being built in Gurgaon by 14-15 km. The project was launched in mid-2009 and was expected to be completed in 30 months, but got delayed due to state government interventions. The cost has risen from the initial projection of Rs 900 crore to Rs 1,088 crore.
The current stretch would have six stations. It would connect Sikandarpur, DLF-2, Mall of India and DLF-3 in Gurgaon.
In the Special Purpose Vehicle formed for the Rapid Metro Rail Gurgaon (RMRG) project, the investment structure was 26 and 74 per cent for DLF and IL&FS, respectively. Till commercial operation begins, DLF will continue to hold 26 per cent equity in the project, said Sanjiv Rai, managing director of RMGL. After that, IL&FS would get all the shareholding. “DLF was initially to invest in the project. However, it did not. So, it is an IL&FS project, constructed and financed by this company,” said Rai.(A PRIVATE METRO WAITS TO BE FLAGGED OFF)
Of the Rs 1,088 crore investment, 30 per cent is in the form of equity by IL&FS and the remaining 70 per cent is debt from eight public sector banks. IL&FS said it would get all the revenue from ticket sales; a share is to go to Haryana Urban Development Authority from the non-fare revenue. “For the first five years, the company would contribute five per cent of the advertisement revenue to Huda, while in every subsequent year for the next five years, it will be increased by one per cent till it reaches the 10 per cent figure,” said Rai.
DLF told Business Standard its interest isn’t in the revenue as much as in the establishment of metro connectivity to DLF Cybercity and Mall of India. “The advantages are better connectivity for the residents of Gurgaon, the workforce in Cybercity and mall visitors. This will also help reduce the cab menace and result in less traffic chaos in the DLF city area,” said the company spokesperson.
C V K Rao, senior advisor to IL&FS and earlier a director with Delhi Metro Rail Corporation, said the ticket fare would be the same as set by DMRC. The trains have been sourced from Siemens, the German engineering major. The maximum speed is to be 80 km per hour.
“We would look at opportunities in the Delhi monorail, a 10-11 km project, if it is a PPP (public-private partnership),” Rai said. The company is also keen to offer small, connecting feeder metros in Delhi, he added.