Eight companies eye Mumbai elevated rail corridor

Eight infrastructure companies have so far shown interest in bidding for the Rs.21,500 crore Mumbai elevated rail corridor project after Indian Railways revised the terms for it, according to two people familiar with the development.

Reliance Infrastructure Ltd, Gammon India Ltd, Larsen and Toubro Ltd (L&T), Infrastructure Leasing and Financial Services Ltd (IL&FS), GMR Infrastructure Ltd, Construcciones y Auxiliar de Ferrocarriles (CAF), Siemens AG and Tata Realty and Infrastructure Ltd have purchased request for qualification (RFQ) documents for the project, available since 6 August, these people said.

“Eight companies have already purchased the RFQ. In fact, Siemens and Tata Realty have requested that the closing date for submission of the document be revised to give them enough time for preparing the qualification request as they have entered the race for the first time,” said a railway official, requesting anonymity.

Railways is likely to postpone the closing date for accepting the RFQ, he said.

The last date for submitting RFQs is 20 September, already extended from the earlier 23 August deadline.

Asked if a second extension will make meeting the 31 January 2014 deadline for award of the project difficult, the official said, “The thinking is that the focus should be on deliverability of the project. It is advisable in the current economic environment.”
The second person familiar with the matter confirmed the development. He, too, requested anonymity.

K.K. Mohanty, managing director, Gammon Infra, confirmed having bought the RFQ document for the project.Email queries sent to Reliance Infrastructure, Tata Realty, Siemens, GMR infrastructure and L&T on 31 August remained unanswered till the time of going to print.
Hari Sankaran, vice-chairman and managing director, IL&FS, refused to comment.CAF could not be reached for comment.

The Mumbai elevated rail corridor project has been short-listed by the steering group set up by Prime Minister Manmohan Singh to accelerate infrastructure projects worth Rs.1 trillion.

The revised RFQ document offers sops such as higher government financing support by proposing to raise the viability-gap funding cap to 40% of the project cost from 20% earlier (subject to the finance ministry’s approval), debt financing by state-run Indian Railway Finance Corp. Ltd and India Infrastructure Finance Co. Ltd, and providing 12 plots of railway land for commercial use by the selected developer.
Viability-gap funding is the financial support provided by the government to public-private partnership (PPP) infrastructure projects to make them commercially viable.

Technical changes include decreasing the length of the trains from 12-15 cars to eight and adopting standard gauge instead of broad gauge.

“It is a positive development… It will add to Railways’ confidence for doing similar PPP projects, with which Railways has had limited success in the past,” said Abhaya Agarwal, partner, infrastructure advisory, at EY Llp in India. “Investments of such scale will also give a boost to the economy.”



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