Published On:August 8 2022
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From consultancy to construction projects, Delhi Metro on a global journey to ramp up its revenue.

Agla station Alexandria hain (Next station is Alexandria). That’s a possibility. After running metro trains in the national capital for the last two decades, Delhi Metro has embarked on a global journey, aggressively scouting for consultancy and construction projects abroad, including in the port city of Alexandria in Egypt. Last month, India’s first and biggest metro rail company submitted bidding documents to procure consultancy jobs for a metro rail project in Alexandria. Earlier this week, it bid to build an entire metro line in Mauritius. Three more metro networks - in Tel Aviv in Israel, Manama in Bahrain and Ho Chi Minh City in Vietnam - are also on its radar. In neighbouring Dhaka, where Delhi Metro has been engaged as a consultant in three routes since 2013, it is gearing up to bid for a new line. Having been hit hard by the Covid-19 pandemic and a massive loss of revenue, Delhi Metro is looking to bolster its revenue streams from non-ticketing sources by throwing its hat in the ring for lucrative projects across the world.

According to people aware of the shift in Delhi Metro’s strategy, this is just the beginning. Delhi Metro’s global ride won’t be easy. In Bahrain, for instance, it may lock horns with Chinese peers, whereas in Mauritius, India’s private construction heavyweights such as L&T could be its key challengers, according to metro officials who are privy to the matter. Vikas Kumar, MD of Delhi Metro Rail Corporation (DMRC), confirms to ET that the urban transporter has been vying for new metro projects in five countries, adding that the pandemic has played a role in its new approach of exploring projects globally. “We want to increase our share of revenue from consultancy business, in particular. So we decided we must expand our business outside India by using our core competence. That will fetch us some extra revenue,” he says.

A senior Delhi Metro official says on condition of anonymity that the transporter, owned equally by the Centre and the government of Delhi, has taken a call to augment its share from consultancy business to 30% of total revenue.

In pre-Covid 2019-20, DMRC earned `505 crore from non-ticketing business, including real estate, advertisement and consultancy work, as against `3,391 crore from ticketing. The non-ticketing revenue was just 13%, and the consultancy portion of it was miniscule, says an officer. In India, the company is providing consultancies to two projects - in Mumbai and Patna. Delhi Metro is taking different routes for its foreign projects. In the Mauritius project, it has decided to go solo while for the Bahrain Metro’s 29-km Phase 1 work, it is partnering with Virtue Global Holding Ltd. with an arrangement that it would ecute the EPC (engineering, procurement and construction) contract if the Dubai-headquartered financial company, which has already qualified in the pre-bid stage, manages to win the bid.

The final bidding is expected to take place in November. A Delhi Metro official camping in Bahrain tells ET over the phone that it has a fair chance as 70% weightage is given for credentials and only 30% for the financial bid. This means, the winner won’t necessarily be the lowest bidder. For the Tel Aviv project, Delhi Metro has partnered with a local company, Poran Shrem Engineering and Appraisal, as well as Indian Railways-owned company, RITES, to obtain some consultancy jobs. The consortium has pre-qualified for bidding.

Financial bidding is expected by year-end. According to a June 2 report in The Times of Israel, the government of Israel allocated $1.8 billion for the project so far and select municipalities were also expected to contribute some funds. In addition, property owners near the proposed metro lines may be asked to pay higher taxes to meet the expenses. In Alexandria, Delhi Metro is partnering with RITES and an Egypt-based company, CEG. For an 11-km-long metro section in Ho Chi Minh City, it has inked a JV with RITES and another company called ICT. The bid is expected to be submitted by the end of this month, according to Kumar. NVS Reddy, MD of Hyderabad Metro, says some of India’s experienced metro companies such as DMRC, Bangalore Metro Rail.

The details of the bidders’ list for the Mauritius project are not readily available. As far as the Bahrain project is concerned, at least three Chinese companies — China Harbour Engineering Co, China Railway Group and CRRC (Hong Kong) Co — qualified in the pre-bid stage. In the upcoming Dhaka metro projects, which also include operation and maintenance of trains, Delhi Metro’s challenger is not a Chinese company. It could be Japanese. An officer says that Delhi Metro, in a recent informal talk with the ministry of external affairs, has proposed that metro projects should be tied to India’s assistance to African nations just like the Japanese ODA (official development assistance), which has such in-built provisions while offering cheaper loans. The officer adds that Delhi Metro is contemplating to get engaged in the proposed Dublin metro project in Ireland. “It’s only an early-stage deliberation,” he clarifies. It will take time to know its winning percentage but Delhi Metro is leaving no stone unturned to give its business a global footprint.

ET





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