DLF, IL&FS in Rs 900 crore metro rail plan

A consortium of DLF Ltd, the largest real estate developer in the country, and IL&FS is looking to invest about Rs 900 crore in the metro rail project in Gurgaon.

The companies are looking at debt equity funding of about 70:30 for the project. A special purpose vehicle would now be formed for the project. DLF will take up 26% stake in it and would also provide its own land for the route.

“We will hold about 26% in this venture, these are long gestation projects, we will strive to make it financially viable, I do not think it is going to show huge returns in the short run,” Rajiv Singh, DLF’s vice-chairman, said.

The project is to be completed within 30 months from the day of the signing of the agreement and financial closure is expected to be completed by January.

“The capacity for the metro would be for about 2 lakh riders, which would eventually be expanded to 3.5 lakh riders. By year 2012, when we go operational we expect around 1.5 lakh riders with average ticket price of about Rs 12 for a 4-6 kilometre ride,” Sanjiv Rai, chief executive of ITNL Enso Rail Systems, a unit of IL&FS, told DNA.

The companies together are looking to raise about Rs 700 crore long-term low-cost debt to fund the project.

Separately, DLF official said the company will “shortly close” the deal to sell its wind power business for about Rs 900 crore.