Tie up with firms like Ikea, Infy, Intel for co-branding of stations; opt for leasing trains, escalators and elevators
From negotiating with companies like Infosys for co-branding of a metro rail station closest to their campus in Bengaluru to taking trains on lease from manufacturers for the expansion project in Delhi, metro rail authorities are coming up with innovative financing ideas to raise money from the private sector.
"In the Outer Ring Road line of 17 kilometre having 14 stations, there are several large corporate offices with whom we are in negotiations. Earlier we have raised Rs 250 crore from Ikea through a land lease deal and have signed up an agreement with Intel and Embassy real estate group for deals worth Rs 100 crore each," Deepa Kotnis, executive director, Bangalore Metro Rail Corp said.
The memorandum of understanding with Intel and Embassy for which deals are yet to be signed involve, among other things, partial naming rights of stations, advertisement rights for 3,000 square feet and 1,000 square feet of commercial space and access to their campus by building walkways.
"While the deal with Intel and Embassy were bundled offers, we may also consider unbundling, say, naming rights from commercial development and offer select facilities at lower value," Kotnis said on the sidelines of industry body Assocham-sponsored event on mass rapid transport systems.
In raising funds through innovating means, Delhi Metro Corp remains a pioneer which has so far inked deals for remaining of about 15 stations.
Bangalore Metro is now going one step ahead.
"Our initiative is a bit different than what Delhi Metro has been doing which mostly involves semi-naming rights and we would be giving access to their facilities also," Kotnis said.
"For the Outer Ring Road metro project, there is no equity participation from the state government and so we are supposed to raise about Rs 500 crore. Out of this, we have already raised Rs 250 crore from Ikea through a land lease deal and are raising additional Rs 100 crore each from Intel and Embassy real estate group," she said.
Delhi Metro has thought of another innovative way of leasing instead of buying trains and plans are being chalked out to get even escalators and elevators on lease too.
"Most of the globally reputed manufacturers, 11 in total, including Alstom and Bombardier have participated in the EoI (expression of interest) for leasing of trains and other rolling stocks. Among the participants, manufacturers who have definite plans to set up facilities in India to cater to local demand would be seriously looking into this opportunity," an official of Delhi Metro said.
With each train costing Rs 12 crore and with plans to procure up to 150 trains on such lease for the phase-3 expansion of Delhi Metro, the capital cost saved would be around Rs 2,000 crore, the official said.
"This will help us avoiding the purchase of trains, thus avoiding significant capital costs, and take the trains on lease from the manufacturers for a period of about 35 years, which is the life of the asset," the official said on condition of anonymity.
"These apart, advertisement revenues are estimated to be around Rs 160-170 crore by end of this year. We generate revenues from advertisement displays inside stations, outside trains and also semi-naming of stations," he said.
COST-SAVING DEALS
- For Delhi Metro, globally reputed manufacturers, 11 in total, including Alstom and Bombardier have participated in the EoI for leasing of trains and other rolling stocks
- With each train costing Rs 12 crore and with plans to procure up to 150 trains on such lease for the phase-3 expansion of Delhi Metro, the capital cost saved would be around Rs 2,000 crore
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