Siemens joins the fray for Mumbai rail corridor as deal turns lucrative

Written by Rajat Arora | New Delhi | Updated: Aug 30 2013, 08:44am hrs
After the railways sweetened the Mumbai elevated corridor deal for private players by reissuing the request for quotation (RFQ), another international tech giant Siemens has joined the race for the R30,000-crore project.

The total number of private players who have evinced interest has now increased to seven. The railways is expecting a couple of more companies to come forward and apply for the project. Infra giants such as Reliance Infrastructure, Gammon, L&T, IL&FS and GMR have already submitted their proposals for the project.

Siemens has evinced interest in the project and we hope that a couple of more companies would come forward since now we have made it a very lucrative proposition for private players, a railway board official sad.

The national transporter has withdrawn the current request for qualification conditions and replaced them with more investor-friendly ones with new clauses, such as additional grant by way of higher viability gap funding and external financial support.

In the fresh RFQ issued earlier this month, several changes such as switching from broad gauge to standard gauge, changes in viability gap funding scheme, increase in land parcels for commercial exploration and external financial support to the concessionaire have been done, the railway board official said.

The shortlisting of companies would be done on September 20, after which the request for project (RFP) would be issued.

An extension of the underground portion between Santacruz and Vile Parle to Bandra Terminus has been proposed to minimise private land acquisition and to provide lending comfort to the prospective bidders, the railways has roped in IRFC.

The railways is extending soft loans carrying 2% interest in addition to the central governments 20% viability gap funding (VGF). The loan quantum will be the lower of the following three: 10% of total project cost, 75% of equity of the concessionaire (bidder who is awarded the contract) or R3,000 crore. The option of IRFC providing loans for procurement of rolling stock has also been included in the new RFQ.