Reliance, Lanco, Essar, L&T, GVK in race for Hyd Metro

The Anil Ambani group's Reliance Infrastructure and Hyderabad-based Lanco Infratech have so far purchased the Request for Qualification applications for taking up the Rs 12,132-crore (Rs 121.32 billion) Hyderabad Metro Rail project.

Six other infrastructure firms, including GVK, Essar and L&T, have also evinced interest and are having discussions with the officials concerned. Among those actively considering the project are two major firms from Delhi and one from Mumbai, which do not want to be named at present.

"We are expecting at least four serious bids for the project," HMR managing director, N V S Reddy, told Business Standard.

HMR started selling RFQ applications from July 24 and the last date for giving these in is September 15. It has decided to hold a pre-qualification conference on August 22.

A consortium led by Reliance Infrastructure, Essar Construction and the GVK Group had also participated in earlier global bids called for the public-private partnership project. But, the project was finally bagged by a consortium led by Maytas Infra, a listed company run by the family of Satyam Computer Services' founder, Ramalinga Raju, which was the lowest bidder.

However, last month, the Andhra Pradesh government cancelled the concessionaire agreement awarded to Maytas for failing to achieve financial closure till more than three months after the initial deadline lapsed in March.

Subsequently, the state government, which also decided not to return the Rs 71 crore (Rs 710 million) that Maytas had paid to it in phases, called for fresh global bids for the 71-km elevated rail project.

Maytas had filed a petition challenging cancellation of the concessionaire agreement in the high court. The HC had declined to stay the order and posted it for further hearing on August 11.

Maytas had paid Rs 11 crore (Rs 110 million) as an initial amount, besides providing Rs 60 crore (Rs 600 million) in a bank guarantee after signing the concessionaire agreement in September last year. As per the agreement, the company forfeited this money if it failed to achieve financial closure for the project by March 17, 2009.

Keeping in view its past experience, HMR has tightened the conditions in its latest RFQ document to avoid non-serious bidders. It has raised the cost of the RFQ application to Rs 10 lakh (Rs 1 million) as against Rs 100,000 in the previous bid. It also raised the bid security amount to 1 per cent (Rs 120 crore or Rs 1.2 billion) of the project cost from 0.5 per cent (Rs 60 crore or Rs 600 million) earlier.

It has also stipulated that the net worth of the prospective bidder should be at least Rs 3,000 crore or Rs 30 billion (earlier Rs 1,500 crore or Rs 15 billion). The bidder should also have implemented Rs 18,000 crore (Rs 180 billion) worth of projects in the past 10 years.

The state government has also retained the right to reject any application or all the applications or bids without assigning any reason.

Image: The Hyderabad Metro plan