INTERVIEW with Sanjiv Rai, MD & CEO, M/s IL&FS Rail Ltd

Sanjiv Rai CEO Rapid Metro GurgaonWe are preparing to bid for more Metro, Monorail projects.  We have learnt a lot…..biggest is land acquisition: Sanjiv Rai, MD&CEO of IL&FS Rail Ltd

As the country’s first privately-funded metro readies for its commercial run, Sanjiv Rai, CEO, Rapid Metro Gurgaon Ltd, a subsidiary of IL&FS Group, shares his experience and learning from putting in place a 5.1-km metro rail system from the scratch.

Rai, who calls his firm a start up, said that RMGL is now ready to bid for other rail-based transportation projects, having gained from the experience.

The project also had many other firsts in India including selling station branding rights and having an elevated depot to park metro trains to overcome high land costs. Excerpts:

Have the project costs gone up from the initial Rs 1,088 crore?

The project cost has escalated by four-five per cent as interest rates have gone up. We paid more money for land acquisition than what we had estimated. It has cost us more to acquire land from smaller land owners.

We were to acquire several acres of land in Gurgaon to build the system.

Almost 60 per cent of the land was given to us on lease by HUDA then another 40 per cent of land was leased from DLF. But, another 10 per cent of land was to be acquired from 14-15 private land owners, who owned 50-60 square yards to half an acre. That took us substantial time and money.

Now, we have completed everything, we have all certifications from Rail Design Standards Organisation.

Speed trials and braking distance tests were completed successfully.

Then, we made an application to Commission of Metro Rail Safety, that process is ongoing. We are expecting the system will open shortly. In the meantime, we are doing service trials.

Where did you hire your train operators from?

We hired eight experienced train operators with five years of experience: some from Delhi Metro and some from Airport Metro Express Line.

We hired 32 fresh graduates, who were trained for four months in the Delhi Metro’s training institute. In the service trials going on for the last two months, all train operators were fully trained.

We have 40 of them. They work in three shifts. In all, we have 150 people in operations and maintenance team.

Separately, we have retained Siemens on a 10-year maintenance contract.

Siemens provided us three main components — the rolling stock, signalling and traction. So, we have signed a 10-year agreement with them to work with our maintenance team, to maintain the system and do whatever is required to keep the system in running order.

Did Siemens subcontract the metro cars from China?

Yes. They have a joint-venture and a co-manufacturing facility there with CSR (China South Locomotive and Rolling Stock Corporation).

All rolling stock companies – Bombardier, Alstom, Siemens – are manufacturing metro cars in China.

What would be your key learning?

We have learnt a lot. The biggest is acquisition of land — how positive we were while acquiring land and how many surprises we got while acquiring. We have corrected that in the second phase. We waited till we acquired 100 per cent land for the second phase project. Again many bidders approached the Government, but we were the only one.

Having done the first project, are you doing consultancy? Are you looking at more projects?

We are not yet qualified to do consultancy. We have not yet reached there. But, we are preparing ourselves to bid for other metro or monorail projects tendering not just in India but outside India as well. We may participate there. There are monorails under consideration in Chennai, Kochi, Thiruvananthapuram and Delhi.

What led to the commissioning of this Gurgaon project on a private basis?

Before 2008, the Haryana Government had got a feasibility study done for having a metro system in Gurgaon. But as they did not have funds, nor could they get funds from the Centre, they decided to source private funding. Initially, besides IL&FS Rail, L&T, Reliance Infrastructure were also interested in the project. Subsequently, we were the only bidders. I don’t know what the exact reasons were, but one of the reasons was that the project size was very small. For a start-up like us, nothing was small and we decided to go ahead.

Were you the lone bidder for the project?

We were the sole bidder and our bid was accepted. But, as we were a single bidder, the Government again advertised the project conditions and we were the single bidder yet again. In late 2009, we received the letter of allotment. It took us about six months to raise the funds.