Infra biggies queue up for largest PPP project

With five big infrastructure companies evincing interest in a mega Rs 21,147-crore (Rs 211.47 billion) rail project, the government's infra drive now looks set for another impetus. The 60-km stretch of Mumbai elevated rail corridor, from Churchgate to Virar, has caught the fancy of companies like L&T IDPL, Gammon Infra, IL&FS Transportation, GMR Infra and CAF South Africa.

Touted as the biggest public private partnership (PPP) project, it will also be a test project for the Railways. The successful bidder will build the line, operate it and do fare fixation and collection, while the Railways and the state government would provide the land. The Railways would close the first round by March-end, when the bidders would submit requests for qualification (RFQs). "We expect more companies to take part in the bidding process," an official said.

The ground work on the alignment of rail lines for the project is still being worked out. The Railways expects, given the traffic congestion on the route, the numbers would be more realistic than the Metro PPP lines, where Reliance Infrastructure has not been able to successfully execute the project. The elevated rail corridor was expected to compete with the Metro in Mumbai under the Mumbai Metropolitan Rail Development Authority (MMRDA), the official said.

According to the RFQ, an applicant shall have a minimum net worth of Rs 5,000 crore (Rs 50 billion) at the close of the preceding financial year. The project might turn out be the Railways' first PPP initiative in the passenger segment. The project has been planned for implementation through the PPP mode under design, build, finance, operate and transfer (DBFOT) model.

The Railways is not expected to control the fare structure. The IRR of the project will be around 3.26 per cent on the basis of fare-box revenue, but it is expected to go up to 13.5 per cent with commercial utilisation of real estate. "As commercial utilisation of land will be the main source of revenue for the private party, the signing of state support agreement will be critical for the success of bidding process as this agreement will provide for state responsibility in land acquisition, resettlement and rehabilitation, enhanced floor space index and utility shifting," said the official.

The 60-km broad-gauge double-line rail corridor from Oval Maidan/Churchgate to Virar would be a mix of underground (18 km), elevated (33.5 km) and at-grade tracks (8.7 km). It would have 27 stations and a maintenance depot. "We are trying to optimise the alignment to minimise land acquisition requirement," the official added.

The total land acquisition requirement will be only 13.7 hectares. While the total structure acquisition will be around 3,400 sq m, the peak-hour passenger carrying capacity is expected to be 90,000.