Hyderabad Metro ropes in Deloitte as adviser

Consultancy firm Deloitte India has been appointed financial consultant and transaction adviser for the Rs 12,132-crore (Rs 121.32 billion) Hyderabad Metro Rail project.

Deloitte will assist Hyderabad Metro and the Andhra Pradesh government in preparation of bid documents, evaluation of bids, revision of the financial model, selection of concessionaire and negotiations with financial institutions for financial closure. The consultancy contract will be in force for one year.

According to an official press release, three consultancy firms -- Deloitte, Grant Thornton India and AXYKno -- were in the race for the contract.

This has set the ball rolling for the project one more time. In July, the state government had cancelled the concessionaire agreement with Maytas Infra, a company run by the family of Satyam Computer Services founder B Ramalinga Raju, on the ground that it had failed to do financial closure three months after the March deadline.

Subsequently, the state government, which also decided not to return the Rs 71 crore (Rs 710 million) that Maytas had paid, called for fresh global bids for the 71-km elevated rail project.

Anil Ambani's Reliance Infrastructure and Hyderabad-based Lanco Infratech have so far purchased the application for taking up the project. Six other infrastructure firms including GVK, Essar and Larsen & Toubro have also evinced interest and held discussions with the concerned officials.

"We are expecting at least four serious bids for the project," Hyderabad Metro Managing Director NVS Reddy had told Business Standard earlier.

Maytas had filed a petition which challenged the cancellation of the concessionaire agreement in the Andhra Pradesh High Court. The court had declined to stay the process.

Keeping in view its past experience, Hyderabad Metro has tightened the conditions this time to avoid non-serious bidders. It has raised the cost of the application to Rs 10 lakh (Rs 1 million) from Rs 100,000 in the previous bid.

It has raised the bid security amount to 1 per cent (Rs 120 crore or Rs 1.2 billion) of project cost from 0.5 per cent (Rs 60 crore or Rs 600 million) earlier. It has also stipulated that the net worth of the prospective bidder should be at least Rs 3,000 crore or Rs 30 billion (Rs 1,500 crore or Rs 15 billion earlier).

The bidder should also have implemented Rs 18,000 crore (Rs 180 billion) worth of projects in the past 10 years.