Reliance consortium bags Mumbai Metro Phase-I

MUMBAI: A consortium led by Anil Dhirubhai Ambani Group company Reliance Energy Ltd and Mumbai Metropolitan Region Development Authority on Thursday bagged the contract for the Rs 2,356 crore Phase-I of the ambitious Mumbai Metro Rail project.

The work on the 11 km Versova-Andheri-Ghatkopar corridor, which comes under phase-I, will start by June and the foundation stone will be laid by Prime Minister Manmohan Singh, Maharashtra Chief Minister Vilasrao Deshmukh told reporters here.

The first corridor will be completed within three years by a special purpose vehicle (SPV) formed by Mumbai Metro-I consortium.

The other corridors in the first phase include 38 km Colaba-Mahim-Charkop route and 14 km Bandra-Kurla-Mankhurd route, the Chief Minister said.

Deshmukh said the Metro Phase-I will be implemented on a Build-Own-Operate-Transfer (BOOT) basis for the period of 35 years of which the first five years will be for construction.

Notably, the project has been allotted a week after Reliance-led consortium drastically cut down the viability gap funding (VGF) from Rs 1251 crore to Rs 650 crore, as desired by the Maharashtra government.

"REL expected a rate of return at 26 per cent but we convinced them that nowhere in the world was there such a rate of return on public transport. Accordingly, the consortium agreed on 15 per cent rate of returns," MMRDA Chairman T Chandrashekhar said.

Out of the Rs 650 crore of VGF, 20 per cent (about Rs 130 crore) will be contributed by the Central government and the remaining by the State government.