Following Maytas Infra Limited's failure to achieve financial closure for the Hyderabad Metro Rail project, the Andhra Pradesh government is reportedly considering executing the Rs12,100 crore project on its own with assistance from the centre.
Maytas had in March asked the government to extend the deadline for closure by six months.
The state government now has three options- an extension to Maytas, the second option is to ask the Hyderabad Metro consortium, including Maytas, Nav Bharat, Ital Thai and IL&FS, to change the lead partner and the third is to ask the centre to fund the project.
The first option may be practically ruled out as Maytas is reportedly in no position to achieve financial closure and finding new partners would not be an easy proposition in the present day uncertain economic scenario. The government therefore appears to favour the third option of executing the project on its own.
In July last year, HMRL, the special purpose vehicle formed to implement the project had finalised the Maytas led consortium comprising Nava Bharat Ventures Limited, Italian-Thai Development Plc and IL FS for executing the project through an open bidding process.
The consortium had committed contributions amounting to Rs 30,311 crore during the 34-year concession period. This included Rs11 crore on agreement, Rs50 crore on financial closure and Rs200 crore in the fourth year, Rs100 crore each in seventh, eighth and ninth year and Rs1,750 crore for the 18 th and each successive year.
According to analysts Hyderabad metro remains a lifeline for Maytas Infra and would significantly boost the company's prospects if it was allowed to continue with the project.
The existing projects valued at Rs13,000 crore would not have the same potential as the single metro project considering the spin offs the project would offer. They said that is was not just a question of the development of the metro, there was also a significant real estate value and losing the project would be a heavy blow to the ailing company.
Chief minister YS Rajasekhara Reddy is currently in New Delhi to meet the prime minister and is expected to take up the matter with him. A decision on the project is likely to be taken after discussions with various officials at the centre, according to sources.
Meanwhile, the centre is reportedly willing to part-fund the project and the state government would, therefore not find it difficult to take the project further, they add.
In this context they point to the recent statement of the Union minister for urban development, S Jaipal Reddy, that the central government would bear about 50 per cent of the cost with funds from Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to build Hyderabad metro rail, on the lines of Delhi Metro Rail.