DLF and IL&FS JV to build Gurgaon Metro

DLF and IL&FS JV to build Gurgaon Metro

New Delhi: A consortium of DLF Ltd, India’s largest listed real estate developer and Infrastructure Leasing & Financial Services Ltd (IL&FS) has won a contract from the Haryana government to develop a metro rail project connecting New Delhi with Gurgaon, at a cost of Rs900 crore.

This is one of the first instances of a metro rail project in India that will be run by a private company. Bhupinder Singh Hooda, chief minister of Haryana who laid the foundation stone said that the government was looking at metro linkages to Faridabad and Chandigarh as well. “A public notice on this has been given to the whole state and private companies are invited to bid for the projects," he said.

While DLF will hold a 26% stake in the consortium, the rest will be held by IL&FS, a DLF statement said. The process to form a Special Purpose Vehicle is on to build and operate the metro system for 99 years.

The project will be funded through a mix of debt and equity, Rajiv Singh, vice-chairman, DLF, said after laying the foundation stone for the project. “IL&FS has the mandate to raise the total debt. In today’s market scenario it is a little difficult, but IL&FS is confident of raising money in the next few months," he said.

In a large project, the debt-equity ratio is typically 75:25 or 70:30, Sanjiv Rai, chief executive of ITNL Enso Rail Systems, a unit of IL&FS and DLF’s partner in the project, said. “We want to achieve financial closure in six months by January 2010," he said.

The 6.1 km metro link with standard gauge line will be completed within 30 months of achieving financial closure, Rai said.

The metro route with six stations will connect the Delhi Metro station at Sikkanderpur and will act as the feeder of the Delhi Metro Central Secretariat-Gurgaon Line of the Delhi Metro Rail Corporation (DMRC), the statement said.

In the long-term, this project could be extended to more than 20 kilometres with an investment of between Rs2,000-3,000 crore, Singh said.

The consortium will have a revenue sharing arrangement with the DMRC, Singh said. While the consortium will keep all the revenue generated from the sale of tickets, a certain percentage of the non-fare revenue generated through advertisements within the metro trains would be shared with the Haryana Urban Development Authority (Huda), he said.