Telangana Govt looking for private partner for ₹5,500 crore Hyderabad Airport Metro project

Hyderabad, India (Metro Rail Today): The Government of Telangana has reworked on the financial model for the proposed 30.7 km long Airport Metro Line which will connect Rajiv Gandhi International Airport at Shamshabad from Raidurg at Gachibowli. Now the government has decided to build the project under the Public-Private Partnership (PPP) modal through a private infrastructure firm at an estimated cost of about Rs5,500 crore.

NVS Reddy, Managing Director of Hyderabad Airport Metro Limited, the special purpose vehicle formed to take up the project, has said that in the light of the “changed economic scenario” it was decided to tweak the ‘Concessionnaire Agreement’ in vogue to offer much “better conditions” to anyone coming forward to invest and build the Airport Metro project.

He said that this is an open offer on behalf of the government to any private entity willing to invest in the next phase of the Hyderabad metro rail project. The government is ready to offer more concessions than what L&T Metro Rail (Hyderabad) Limited got in the building and operating of the first phase of the project built across 69-km through three major traffic corridors of the twin cities.

He informed that the ‘hybrid annuity model’ being planned for the Airport Line Metro is to be eased further with the government offering to provide financial assistance not only during the construction of the project but also in the first 5-10 years of operations.

“From the metro first phase experience, it was noticed that the concessionaires face tremendous financial pressure during this period as these are large capital expenditure projects with returns over a long term. At the same time, we do not want to do away with the ‘risk’ element for the private player totally,” Reddy said.

"If the average cost of the steel, cement and other construction material is taken into account (not the current super-high rates), it is estimated that the metro second phase can be built at about Rs165 crore a kilometre from the usual Rs300 crore a kilometre cost likely for the kind of work done in the metro first phase," he added.

This is possible by reducing height of the elevated structures and considering not much land acquisition will be required as the line will passing on the road median and later along the Outer Ring Road (ORR). “The precise details of the initial financing, annuity payments and others will be worked out at the bidding stage. It is a real challenge to build large infrastructure projects in the present scenario,” he further said.

In September 2021, GMR Group had shown interest to invest Rs 519.52 crore in the proposed Airport Line Metro Corridor by 2024. 

The proposed Airport Metro Corridor will connect Rajiv Gandhi International Airport to Raidurg through eight elevated metro stations at Bio-Diversity Junction, Nanakram Guda, Narsingi, TS Police Academy, Rajendra Nagar, Shamshabad, Airport Cargo and Airport Terminal. The detailed project report of this project was prepared by Delhi Metro Rail Corporation Limited (DMRCL) in 2019. This new metro corridor will be developed under Phase 2 of the Hyderabad Metro Rail Project.