FCC

Construction cost and investment returns

2019-04-01

The cost of a metro project depends on the geographical location as well as many development constraints and requirements.

According to Rahul Shah, COO - Urban Infrastructure, Tata Projects, ?The overall construction costs invested in materials, equipment and electrical components depend on various parameters.? In fact, all these parameters are specified within tenders, which itself differ from one another.

Based on the data available in various DPR, Mohammad Athar, Partner, PricewaterhouseCoopers, says, ?The cost of an elevated metro project is in the range of Rs 2.25-300 billion per km and underground metro is about Rs 5.50-5.75 billion per km.?

For his part, Nalin Gupta, Managing Director, J Kumar Infraprojects, says the overall cost invested in construction materials, equipment and electrical components, etc, on average, is 50-60 per cent. Commenting on the per-km construction cost involved in underground metro, he shares, ?It depends upon availability of specialised machinery and equipment (owned/hired/new) and experts to operate it. As for elevated metro, it depends upon availability of machinery and equipment and experienced men and the location of the site.? He adds that average investment return depends upon the availability of funds (capital plus interest for construction purpose).

Take the case of the Nagpur Metro project. According to Sunil Mathur, Director (Rolling Stock & Systems), Maharashtra Metro Rail Corporation, about 10 per cent of the total project cost comprises electrical installation. ?The per-km construction cost for the traction distribution system (TRD) of the elevated metro line comes to around Rs 100 million (per route km),? he shares.