Financing Structure
A concession agreement on BOOT basis for a period of 35 years, including a construction period of 5 years, has been awarded by the MMRDA. Under the concession agreement, the operator has to design, finance, construct, operate, own and maintain the first corridor and transfer the ownership and assets at the end of the concession period. A Special Purpose Vehicle (SPV) named Mumbai Metro One Private Limited (MMOPL) has been formed with Reliance Energy Limited, Veolia Transport and MMRDA holding equity stakes of 69%, 5% and 26%, respectively. This project was one of the first projects in mass transportation systems being implemented on a PPP basis in Maharashtra. The government thus felt the need to closely monitor the project and took a 26 percent stake in the SPV implementing the project. This allowed the government to have 3 members on the board of the SPV and ensured that it would be able to effectively monitor and influence decisions on financing, design and construction for the project. The MMRDA will contribute equity to the tune of ` 134 crore for this 26 percent stake in the SPV during the construction phase of the contract. The assets of the project include the viaduct, stations, bridges, depot, rolling stock, signalling system, traction and Supervisory Control and Data Acquisition (SCADA) system, communications Fifteen Case Study 12: Mumbai Metro 112 Public Private Partnership projects in India Compendium of Case Studies systems, track work, fare collection system, etc. All these are owned by the SPV. The assets shall be constructed or procured through contractors and equipment suppliers. For example, the signalling system shall be installed by Siemens while the communications system by Thales Inc. and the rolling stock shall be procured from CSR Nanjing. The land for the depot has been taken on a long term lease which is renewable from the owners of the land. The SPV holds the exclusive rights to develop and use the land for the MRTS Project.
Process Analysis
Case Study 4: Bhiwandi Electricity Distribution Franchisee
Introduction
The worsening power deficit scenario in Maharashtra warranted immediate action on the part of the Maharashtra State Electricity Distribution Company Limited (MSEDCL). Since the gestation period for addition of generation capacity is long, MSEDCL decided to focus on load-side energy management and utilise the savings thereof to curtail the growing deficit to some extent. MSEDCL also decided to bring in private sector expertise for increasing efficiencies in the distribution system in certain selected circles (networks) through a distribution franchising arrangement.
The Electricity Act 2003 allows the holder of a distribution licence to contract out some or all of the distribution activities to a franchisee. The distribution franchise arrangement applied to the distribution circle in the town of Bhiwandi, about 48 km north-east of Mumbai is a pioneering project and the first “input” distribution franchisee project following the introduction of the concept in the Electricity Act. In an “input” model, the agency is responsible for supply of power at the input point and the franchisee is responsible for all obligations of distribution license in the franchisee area i.e.
Supply of power
Consumer Service
Operation and maintenance of distribution network
Billing and Collection
Compliance with regulatory standards
Bhiwandi was chosen for the project since it had a reputation of being a chronic defaulter on its power bills and had a poor distribution network with a very high level of Aggregate Technical and Commercial (AT&C) losses. It had, at the time, 160,000 customers (total population of about one million) over a geographical area of 721 sq kilometres. The power demand of the Bhiwandi circle, with a significant number of textiles /garment manufacturing units (mainly power looms), at the time, was about 800 MVA, translating into an annual energy input of about 2,500 gigawatt hours (GWh). Torrent Power AEC Limited (TPAL) was the private entity appointed by MSEDCL for this project.