Hyderabad Metro to get up to Rs1,458-cr viability gap funding

The empowered committee of the finance ministry at its meeting on 6 May accorded final approval for viability gap funding of Rs1,458 crore for development of Hyderabad Metro Rail on a `Design, Build, Finance, Operate and Transfer' (DBFOT) toll basis.

The committee chaired by the secretary, department of economic affairs of the finance ministry, cleared the VFG (which is 12.35 per cent of the total project cost of Rs11,814 crore) for the project at its seventh meeting on 6 May 2013.

The union finance minister had earlier granted in-principle approval for VGF support to the project.

The Hyderabad Metro rail project covering a length of 71.16 km consisting of three lines and 66 stations was estimated to coast Rs11,814 crore. However, the project cost had overshot the estimates, requiring the concessionaire the government to provide for the additional cost.

Under VGF, the central government meets up to 20 per cent of capital cost of a project being implemented in public-private-partnership (PPP) mode by a central ministry, state government, statutory entity or a local body, provided the project is competitively bid.

The project is being implemented by engineering and construction major Larsen & Toubro Ltd.