3 financial models for Lucknow Metro on govt table

In the first meeting on June 8,the UP government asked DMRC to work out financial models for development of the project on PPP model. Later,the government decided to also invite Larsen and Toubro and Reliance group to present financial models adopted by them for their Hyderabad and Mumbai Metro rail projects,respectively.

Sources said that no representative from Reliance turned up at the meeting. An L&T representative presented the Design,Build,Finance,Operation and Transfer (DBFOT) model it had adopted for Hyderabad Metro. Sources said the representative said that the company would get around Rs 1,450 crore as Viability Gap Funding from the Andhra Pradesh government for developing the Rs 12,132 crore Metro project covering 71 km.

DMRC presented two models — its own DMRC funding model and another Build,Operate and Transfer (BOT) model. DMRC General Manager (Consultancy) S D Sharma said,“In DMRC model,the central and state governments equally share 40 per cent cost while the remaining 60 per cent is taken by loan.”

In BOT model,Sharma proposed a land parcel to make the project viable for a private developer. The private developer could use the land parcel for commercial use to recover its investment. The meeting was chaired by Chief Secretary Anoop Mishra. LDA vice-chairman Rajiv Agarwal was present at the meeting but not available for comment.

Another government official said,“L&T’s Hyderabad model appears feasible for the Lucknow project.”