CHENNAI METRO RAIL

LIMITED (CMRL)
PHASE 2
GROUP 1
ANUSHKA
KRISHNA
ABHINAV
ASHISH
DEVENDRA
Introduction

Phase 1 and Phase 1 ext. Has a total length of 54.15 km with total cost
standing at 18379.92 crs (14600cr and 3779.92cr)
For phase 2, 118.9 kilometre length and 3 corridors that are part of GoTN's
planned implementation are home to 128 stations (80 elevated stations
and 48 underground)
Phase 2 of CMRL is going to server the highly populated Northern Chennai
region, and connecting multiple high footfall locations across Chennai,
thus having high social value.

An estimated project completion cost of 54,571 cr.

GoTN: Financing at a 50/50 ownership split, including loans from bilateral

and multilateral organisations.

JICA, ADB, AIIB, and NDB are few of the bilateral/multilateral banks that
have provided financial assistance to the Chennai Metro Phase II Project.
Project Details
Capital Structure
NPV & IRR Calculations

Beta
1.11
(Levered)
Discount
6.17%
Debt 38199.854 Rate

Equity 16371.366
Risk free rate NPV ₹8427.43 cr
7.37%
in India
Risk
7.25%
premium  IRR 7.05%
Re 15.42%

Rd 2.20% Capex ₹54,571.22

WACC 6.17%
Sensitivity
Analysis
 Scenario Analysis
Worst Case-Delay in Corridor5 Best Case-Increase in Non-Fare Revenue to get break even
Environmental
Traffic Noise Reduction as metro works on sophisticated technology
Reduction of Traffic on Road as the corridors will be connecting the
busy routes
Less Fuel consumption on the consumption of petrol, diesel and CNG
will get reduced significantly.
Reduced Air pollution as Compared to other modes of transport, the
metro is most environment friendly since no air emissions are involved
in operating the metro trains.

Pollution by construction spoils, Solid waste from construction sites

resulting in soil erosion
Water quality impacts due to disposal of wastewater from worker camps
and construction sites, spoils.
Depletion of groundwater resources,Drainage, Water requirement, and
Disposal of waste water
Impacts due to emissions generated by construction machinery/vehicles
Noise due to operation of various equipment
Removal of vegetation cover/loss of biomass resulting in less absorption
of CO2
Environmental

A total of 48.69 crore expenditure on environment-saving procedures

It costs $90 per CO2 tonne to the Indian economy
The metro will save 10 lakh tonnes CO2 emission
So the cost saved here is = 10,00,000 *$90=
$9,00,00,000=₹7,35,54,12,000.00
It is estimated that around 247 million litres of diesel and 24 million of
petrol to be saved per day in 2025.
An estimated savings of ₹25,91,30,00,000(23465000000+2448000000)
The construction will require cutting of 2043 tree which will result in loss
of absorption of 56.75 tonnes of CO2. (56.75*$90=$5107.5= ₹4,16,996.73)
compensatory plantation will be done by the ratio of 1:12, which will
result in 73.548 tonnes of CO2 absorption thus saving ₹5,40,427.76.
These plants will also increase oxygen production by 269 tonnes.
All the construction activities including muck disposal may generate
dust due to vehicle movements which is estimated as 32 tons during
total construction period for all three corridors just by vehicle
movement. Each truckload takes $600 to manage that.
117.60 Lakhs to be spent on noise barrier for corridor 3 and 387.03 lakh
for corridor 5. This will reduce the noise by 30 db to 38 db
 Government
Reduction of government investments on road infrastructure

Reduced O&M charges

 Government

Revenue loss on other modes of public transport due to metro

Suppliers
Tenders for various divisions
have been alloted till date by
CMRL for the construction of
Phase II.
Total 18 contracts have been
signed with different private
entities amounting more than
INR 5900 crores.
Tata Projects, L&T, Alstom were
one of the major entities to sign
the contract with CMRL
In near future, more economic
value will be created for the
suppliers with rolling of new
tenders.
 Customers

Reduction in vehicle operating costs

Savings in travel time
Improvement in quality of life
Reduction in travel cost
Reduction in loss of productivity due to
health disorders resulting from pollution
Reduction in road accidents
 Competitors
Ride-hailing services
32,000 call taxis are operated through cab aggregators such as Ola
and Uber.
Faster during the non-peak hour.
Direct transport, no unnecessary longer route

Govt/Pvt Bus services

Chennai has 3,436 buses with 3,233 scheduled services, with on
average of 2.946 million passengers per day
For far destination need to switch busses

Pvt Vehicles
Chennai has around 60 lac pvt vehicles(2wh+4wh)

Chennai Suburban Railway

Chennai has 32 Train lines with 104 Train stations.
More than 1,480,000 passengers use the suburban services every day

Autos or Rickshaw services

Chennai has 1,29,124 rickshaws
Direct transport, no unnecessary longer route
Risk Identification & Management
Implementation Delay of Projects: Substantial Risk
Correct detailing of the project through a developed Work Breakdown structure, result in all of the project
elements being included in the planning stage, minimizing the possibility of implementation delay.
Hire a general consultant for close monitoring of all processes including financing and operations, and
mitigating the delay causes asap.
Technical Challenges: Substantial Risk
CMRL should hire experts and safeguard specialists to deal with technical issues during construction.
Utility mapping acquired from relevant agencies informed the design process
Maintenance retention account should be maintained during loan period to receive a proportion of cas flow to
cover future maintenance expenditure.
Prolonged land acquisition: Medium Risk
Focusing on the transfer of land belonging to government agencies—well ahead of the bidding for the civil
works packages- 70% of land needed for project has been transferred from state government
Treating 50:50 Joint ownership Metro Rail Companies like DMRC, CMRL at par with CPSUs for transfer of land
Procurement of civil works due to lacking experience with financial organizations: Medium Risk
Proper workshops to be organized by financial institutions for employees responsible for direct engagement
with them, like JICA, ADB, etc
Advance contracting to expedite the procurement of civil works, along with hiring of an expert for smooth flow.
Delays in obtaining statutory clearances for metro line corridors: Medium Risk
Application process to be started well in advance from the construction, and addressing issues raised by
authorities immediately
Treating of CMRL as CPSUs will also expedited the process of acquiring forest, beach as well as defence land.
Risk Identification & Management
Design Risk: Medium Risk
Improper design can lead to high operating and construction cost for CMRL.
Optimisation of station size and number of entry and exit structures reducing the security and O&M expenses.
CMRL's financial sustainability: Substantial Risk
Support from the state government to cover operational losses and debt service obligations, no delay in
release of funds
CMRL's exposure external debt be limited and fare structure to be reviewed & revised periodically to minimize
operational losses
Exposure to Forex Risks: Substantial Risk
Treatment of forex risk is an industry-wide issue that MOHUA raised with the CAG to allow exemption from these
accounting standards to all metro project companies across the country.
Develop a comprehensive forex risk management policy and operational guideline
Market Risks: Substantial Risk
Major market risks for would involve the interest rate risk and currency market risk owing to international
borrowings.
Given the current repo rate situation the interest risk is high, also INR has depreciated significantly which
possesses a higher risk in terms of repayment.
Liquidity Risks: High Risk
The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets
and liabilities.
Managing the liquidity risk by maintaining adequate funds in cash and cash equivalents.
THANK YOU
FOR YOUR ATTENTION
APPENDICES
Revenue
Analysis
Cost
Analysis
Cash
Flow
Analysis