Shortlisted firms skip Hyderabad Metro bidding

The Hyderabad Metro Rail project is all set to land into trouble again.

None of the shortlisted bidders have submitted their financial bids so far with the last date for doing so being April 21, prompting the Andhra Pradesh government to extend the last date for financial bidding to June 7.

“There are many questions that remain unanswered so far. The viability of the project itself is a big question. The traffic projections of 1.5 million per day are looking extremely unrealistic. Real estate attached to the project had been a major attraction. Looking at the market situation and the prevailing Telangana movement in the state, the real estate too is not likely to fetch the expected value,” a source dealing with a shortlisted bidder said.

The project has been designed with an outlay of Rs 12,123 crore and will cover about 71 kilometres cutting through several points in Hyderabad.

Earlier the project was awarded to Maytas Infra after a competitive bidding. Though there was a provision for seeking viability-gap funding under the norms of the public-private partnership, Maytas had agreed to pay Rs 30,000 crore as reverse grant to the government over a period of 30 years.

However, after the Satyam accounting scam and Maytas too facing collateral damage, the company failed in meeting the deadlines for achieving the financial closure forcing the government to scrap the bid.

Currently, the government has called for fresh bids and Transstroy-OJSC Transstroy (Russia)-CR18G (China)-BEML consortium, Reliance Infra-Reliance Infocomm (ADAG) consortium; Lanco Infra-OHL Concesiones (Spain) consortium, Essar-Leighton (Australia)-Gayatri-VNR consortium, GMR Infra, GVK-Samsung (South Korea) consortium, Soma-Strabag AG (Austria) consortium and Larsen & Toubro have been shortlisted for taking the project forward.

But, these consortia, too, have not shown any signs of seriousness in the project. In fact, GMR has already decided to keep off the project.

Other players though are remaining non-committal at this point; sources tracking at least two of the bidders said there was no immediate plan to go ahead with the project.

“Maytas model is different. For them, more than the project, it was the property development along the track that mattered. But that situation has changed now. A pure metro operation looks still unviable in Hyderabad today,” a source said.

The government, in fact, had decided to give the authority to acquire properties along the route and exploit them commercially.
A bill too was passed in the state assembly authorising the winning bidder to acquire the properties.

While the rights activists have been opposing the decision to vest the powers to acquire properties, the bidders are worried about the regionalism in the state.

“This will eventually take a political colour. It would be seen as an issue between the Telangana and the non-Telangana people. It is definitely risky at this point,” the source said.