Public Private Partnership in Urban Rail Transit: Case Study Mumbai Metro Line 1

1. Mumbai Metro Line1
Public Private Partnership in Urban Rail
Transit
Kapil Kumar Sinha
15554006
M.Tech(IFS)

2.  First corridor of the proposed MRTS by
Government of Maharashtra through MMRDA.
 Elevated line of 11.4 km. from Versoa to
Ghatkopar connecting 12 stations.
 Connects the East Suburb to West suburb of the
city reducing time of travel up to 70 minutes.
Project Brief
Mumbai Metro Line1
Project Cost : Rs. 2356 crore
Concession Period : 35 years
PPP Structure : BOOT

3. PPP Structure
 BOOT ( Build Own Operate Transfer Transfer)
 operator has to design, finance, construct,
operate, own and maintain and transfer the
ownership and assets at the end of the
concession period.
 Concession Period : 35 Years.
 Construction Period : 5 Years.
Reliance
Energy
Limited
69%
Veolia
Transport
5%
MMRDA
26%
EQUITY STAKES OF MMOPL
 Special Purpose Vehicle (SPV) : Mumbai Metro One Private Limited (MMOPL)
 The MMRDA contribute equity of Rs. 134 and have 3 members on the board of the SPV
and ensured that it would be able to effectively monitor and influence decisions on
financing, design and construction for the project.

4. PPP Structure
Mumbai Metro One Private Limited (MMOPL) owns
 Viaduct
 Stations
 Bridges
 Depot
 Rolling stock
 Signaling system,
 Traction and Supervisory Control
 Data Acquisition (SCADA) system
 Communications systems
 Track work
 Fare collection system
The land for the depot has been taken on a long term lease which is
renewable from the owners of the land.

5. Financing Information
 Total Project Cost : Rs. 2,356 crores.
 Viability Gap Funding : Rs. 650 crores
Rs.650 crores Rs.1706 crores
Government of India
Rs.650 crores (20% of project cost)
Government of Maharashta
Rs.180 crores (7.5% of project
cost)
Rs.1240 crores arranged by
private operator
Rs.466 crores by private operator and
MMRDA as per equity stake
Consortium
IDBI, Corporation Bank, Karur Vysya bank, Canara Bank, Indian Bank and Oriental Bank of
Commerce.
DEBT arranged by private operators

6. Financing Information
 The cost of borrowing for the rupee component, which constitutes about 75 per cent of
the total debt, will be 12.25 per cent, while the foreign currency loan will be at 3.5 per
cent above LIBOR (London Inter-Bank Offered Rate)
 IIFCL (U.K.) is providing the foreign currency loan for the project.
 The loan has been secured for a moratorium period of 2 years and a total loan
repayment period of 15 years.
 The project has also taken into consideration a service debt facility of around Rs. 70-80
crore
Rupee
Foreign
Currency

7. Development
The development phase of the project was initiated in parallel to the VGF
approval process. Major milestones achieved in the development phase
are presented below:
 The SPV was incorporated in December 2006.
 The Engineering and Project Management Consultants, a consortium of
Parsons Brinkerhoff (USA) and Systra SA (France) joined the team on
February 14, 2007
 Signing of the Concession Agreement and Shareholders agreement took
place on March 7, 2007
 MMOPL and Government of Maharashtra entered the State Support
Agreement on April 20, 2007
 Construction commenced on February 8, 2008
 Financial Closure for the project completed on October 3, 2008
 Completed and opened for public use on 8th June, 2014.

8. Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Delays in land
acquisition
High 0-5 years Government
Financing Risks Medium 0-5 years Private Sector
Planning Medium 0-5 years Private Sector
Regulatory,
administrative &
approval delays
Low 0-5 years Private Sector
 PRE-OPERATIVE RISKS

9. Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Design Risk Medium 0-5 years Private Sector
Construction Risk Medium 0-5 years Private Sector
Change in Scope Risk Low 0-5 years Government
Financing Risk Medium 0-5 years Private Sector
 CONSTRUCTION PHASE RISKS

10. Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Technology Risk Low 0-35 years Private
Sector/Government
Operations &
Maintenance Risk
Medium 0-35 years Private Sector
Market Risk Low 0-30 years Private Sector
Performance Risk Medium 0-30 years Private Sector
 OPERATIONAL PHASE RISK

11. Risk allocation framework
Risk Type Sensitivity Risk Period Primary Risk Bearer
Handover Risk Low 35th years Private Sector
Private Operator
Event of Default
Low 0-35 years Private Sector
MMRDA Event of
Default
Low 0-35 years Government Sector
 HANDOVER RISKS
Risk Type Sensitivity Risk Period Primary Risk Bearer
Interface Risk (with
other metro corridors)
Medium Throughout Private Sector
Force Majeure Low Throughout Shared
Change in Law Risk Low Throughout Private Sector
 OTHER RISKS

12. Ridership and Fare Structure
0
1
2
3
4
5
6
7
8
9
10
2014 2021 2031
Ridership in lakh per day
 Present- 3 lakh per day
 2021- 6.65 lakhs per day
 2031- 8.83 lakhs per day
 Fare fixed by MMOPL under first committee are Rs. 10 to Rs.110 but discounted fare are
taken due to order i.e. Rs. 10 to Rs. 40. Monthly fare for is from Rs.675 to Rs.900

13. Learnings
 Delay in Obtaining VGF approval.
 Delay in approvals can potentially derail the project.
 Land Acquisition process can lead to issues in the project.
 Clear Specifications on Asset Transfer on termination.
 Public Support for the project.
 Role of Good Project Preparation.

14. References
 http://toolkit.pppinindia.com/urban-transport/module3-rocs-mm8.php
 https://mmrda.maharashtra.gov.in/metro-line-1
 Public Private Partnership projects in India Compendium of Case Studies
 http://www.reliancemumbaimetro.com/fares.h