Reinventing Governance and Planning Frameworks: Hyderabad Metrorail Case Study Learnings of LVC and VGF

By : Anjula Negi, Bodhishotto Bhattacharjee

Page No: 89-114

Abstract
Hyderabad metrorail project is globally one of the largest Public-PrivatePartnership in urban/metrorail segment. First project worldwide to successfully receive viability gap funding and incorporate few aspects of land value capture. Multifold learnings from it can be adapted for urban governance, development and planning for newer metrorails. Authors put forth project’s nuances in this paper alongside key tenets of developmental journey, which is replete with its share of success and failures. Commercial operations commenced in November 2017 despite several hurdles. Vital learnings are that metrorails remain highly capital intensive, complex and time-consuming works, and failures/misses can add to time and cost. To overcome odds, thorough and robust groundwork is required at the onset. Numerous implementation challenges coupled with litigation and turmoil amidst creation of a new state were noted for Hyderabad metro. Change of alignment request by new political formation consequent to state’s bifurcation and delays in land acquisition crucial to construction work were issues dealt by concessionaire. Creating a financially viable structure to sustain an optimum equity return throughout concession period is one of the biggest challenge to project structuring. Fare box revenues alone were largely deemed insufficient for recovery of capital even in the long-term. Financial sustenance during operations is also under question. Success ensuing its creation is spearheaded by a superior project structure, effective project management, tenacious implementation framework and dedicated anchor assuming leadership for multi-stakeholder coordination and approvals, noted from experts. Success equally equally befalls in publics’ usage of services too, given that travel demand is being met with last-mile convenience and comfort.

Authors :
Anjula Negi : Senior infrastructure advisor and research scholar at SPA New Delhi.
Bodhishotto Bhattacharjee : Independent consultant.