Discover Telangana

Press meet was held today (29th October 2008) demanding scrapping of the Concession Agreement signed by the Government of Andhra Pradesh with Maytas Metro Limited. The meeting was addressed by Mr. Jeevan Kumar, Human Rights Forum; Prof. M. Kodandram, Convenor- Telangana Vidyavanthula Vedika; Dr. C. Ramachandraiah, Social Scientist and representative of CBPTH and Mr. Umesh RTI activist.

Press Release :

Citizens for a Better Public Transport in Hyderabad

(A coalition of a number of civil society organizations and individuals)
Hyderabad Metro Real Estate Project

Concessional Agreement with Maytas: A Sell Out?

The Concession Agreement (CA) for Hyderabad Metro Rail Project (HMRP) was signed between the Government of Andhra Pradesh (GoAP) and M/s Maytas Metro Limited (MML) on 19 September 2008. A team of CBPTH visited the HMR office on 25th October to peruse the documents under Section 4 of the RTI Act, 2005. A few important provisions of the Concessional Agreement are given below that prove beyond doubt that this project promotes the interests of the private real estate company, Mytas, than public interest.

1. The Rail System by definition includes the rail-related infrastructure and also the Real Estate Development (RED). 212 acres of land is available at Miyapur (99 acres), Falaknuma (17 acres) and Nagole (96 acres), and 57 acres at 34 stations (for parking & circulation) for RED. RED includes 6 mln sft over parking and circulation areas of 34 stations, 12.5 mln sft over the 3 depots (above first floor level), 30% of area at Miyapur and Nagole and 20% at Falaknuma along with basement. And also 10% of the floor area of each metro station. If the lands earmarked for parking and circulation are not made available to the MML, the government shall earmark alternative sites of comparable size and potential for RED.

(There is no clause that says that no more land will be given in future to the MML. This should be read with the Section 17.2(a) of the Andhra Pradesh Municipal Tramways (Construction, Operation and Maintenance) Ordinance, 2008 (now an Act) the ‘tramway operator’ (i.e. MML) shall have powers to “acquire, hold and dispose of all kinds of properties, movable and immovable”.)

2. No Local taxes: The CA further says that no local tax or charge is levied or imposed on the Rail System, which includes RED. This means the GHMC will lose hundreds of crores of rupees in the form of building fees, property tax, entertainment tax etc. for forty-one years on the real estate business of the MML.

3. Penalty by GoAP: Within 30 or 60 days of payment of Performance Security (PS - Rs. 240 crore to be deposited by MML within 180 days of signing the Agreement), the government shall have procured the Site (i.e. all lands and buildings) and also approval of Railway authorities for construction of bridges etc over railway lines. For delay, the GoAP shall pay 0.1% of the PS (i.e. Rs. 24 lakh) per day subject to a maximum of 20% (i.e. Rs. 48 crore).

The metro corridors will have to cross railway lines at several places. The Line II (JBS-Falaknuma) will have to cross the entire stretch of Secunderabad station across all the ten platforms along with a station in the front. Experience shows that getting quick permissions from the railways has not been an easy task. Already, construction of two flyovers and a bridge over the existing railway lines/stations in the city (over Begumpet station, Lakdikapul, and over HiTec City MMTS station) have been facing hurdles for several months now due to the queries by railway ministry. The South Central Railway also has plans to develop Secunderabad station into a world class railway station. When such is the reality, why was the GoAP so eager to sign the CA? Who will benefit from this?

4. No Competition: The government has foregone its responsibility to improve or provide other modes of transportation to public in future along metro corridors by agreeing to a restriction on Competing Facility (CF) till 25th year. If CF is introduced, Concession Period will exceed by the period equal to the duration of the start of CF and the 35th year (That is, if CF is introduced in 30th year, the lease period should be extended by five years). Further, the fares in the CF should be higher by a minimum of 25% compared to the rail system. Different fares can be levied during peak and off-peak hours. In a day, 4 hours can be declared as peak hours.

This means that the APSRTC will not be allowed to introduce modern buses for public comfort on these routes. The MML is also empowered to run the shuttle services from colonies to the metro stations. This will also sound death knell to the RTC. The objective of providing mass transport is thrown to the winds. The argument that the commuters will have choices under private sector is a hoax. They will be forced to pay higher tariff and travel by metro rail only even for short distances.

5. Extension of Lease Period: By October 1, 2021 the traffic is estimated to be 275,00,000 PKM (passenger kilometers). If the actual traffic falls short by 1% of this, the Concession Period will be increased by 1.5% of 35 years to a maximum of 20% of the period (i.e 7 years). The actual traffic for that date shall be derived by traffic sampling one year prior to October 1, 2021. The traffic sampling shall be done for a continuous period of 7 days during anytime within 15 days prior to the specified date and the average shall be the PKM for this purpose.

There is no scientific basis for estimating the traffic of 2.75 crore PKM (about 26.76 lakh passengers per day). When everything is computerized, why should there be a sample study? It is a well-known fact that even after 5 years the Delhi metro is not carrying even 30% of the projected ridership. Are the GoAP authorities so innocent that they are not aware of these? Who is serving whose interests?

6. Scheduled Completion Date: 1826th day (i.e. five years) from the Appointed Date. Appointed Date means the date on which Financial Closure is achieved (six months from the date of signing the CA) or an earlier date that the Parties may agree. The Concession Period starts from this date.

Assuming that the Appointed Date starts in March 2009, the scheduled completion date is March 2014. When this is the official position, the HMR officials have been telling the public that the metro rail will be completed by 2012 and it will carry 16.38 lakh passengers per day. What an official bluff to hoodwink the people?

7. Electricity tariff :to be on commercial principles. But the Detailed Project Report prepared by Delhi Metro Rail Corporation recommended that the power tariff should on “no profit no loss” basis (that is, effective purchase price plus nominal administrative charges).

8. Termination of CA: Even if the CA has to be terminated due to a default by MML, the liabilities to be paid by the government appear to be profitable to the private company. This shows that, for the GoAP, safeguarding the interests of the private company have weighed more heavily than protecting the interests of the public.

Post Script: The HMR officials have now decided to change the route of Line-I from Khairatabad to Assembly via Lakdikapul instead of via NTR Marg-Lumbini Park. A change in alignment at this stage (after the agreement was signed) also shows the poor quality of the studies done for this project. God knows how many more such changes are likely to be made in the coming days!

In view of all these, the Concessional Agreement with Maytas should be scrapped immediately in public interest. And the issue of public transport should be debated.