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Metro

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History[edit]
Mumbai is capital of Maharashtra, the most economically developed state of India. It is among the largest cities in the world, with a total metropolitan area population of over 20 million as of 2011,[16] and a population growth rate of around 2% per annum.[17] Mumbai has the advantage of a high modal share of the public (88%) in favour of a public mass transport system. The existing Mumbai Suburban Railway carries over 7 million passengers per day,[18] and is supplemented by theBrihanmumbai Electric Supply and Transport (BEST) bus system, which provides feeder services to station-going passengers to allow them to complete their journeys. However, due to the city's geographical constraints and rapid population growth, road and rail infrastructure development has not been able to keep pace with growing demand over the last 4-5 decades.[19] Moreover, the Mumbai Suburban Railway, though extensive, is not built to rapid transit specifications. The main objective of the Mumbai Metro is to provide mass rapid transit services to people within an approach distance of between 1 and 2 kilometres, and to serve the areas not connected by the existing Suburban Rail network. Original Mumbai Metro master plan[19] | Phase | Line | Name of the corridor | Length (km) | Phase I
(2006–2011) | 1 | Versova - Andheri – Ghatkopar | 11.07 | | 2 | Colaba - Bandra – Charkop | 38.24 | | 3 | Bandra - Kurla – Mankhurd | 13.37 | Phase II
(2011–2016) | 4 | Charkop - Dahisar | 7.5 | | 5 | Ghatkopar – Mulund | 12.4 | Phase III
(2016–2021) | 6 | BKC - Kanjur Marg via Airport | 9.5 | | 7 | Andheri(E) - Dahisar(E) | 18 | | 8 | Hutatma Chowk – Ghatkopar | 21.8 | | 9 | Sewri – Prabhadevi | 3.5 |
The Government of Maharashtra through the MMRDA, in order to improve the traffic and transportation scenario in Mumbai and to cater to the future travel needs in the next 2-3 decades began exploring the viability of various alternative mass transit systems which are efficient, economically viable and environment friendly. In this context, a detailed feasibility study was carried out under Indo-German technical co-operation by entrusting the consultancy work to TEWET in association with DE-Consult and TCS, during 1997–2000. The study recommended a mass transit corridor from Andheri to Ghatkopar as potentially bankable and economically viable, after examining a number of alternative corridors and alignments. This study was updated by MMRDA in May 2004. Meanwhile, the Delhi Metro Rail Corporation (DMRC) prepared the master plan for Mumbai metro, wherein they recommended extending the Andheri-Ghatkopar section to Versova as part of the master plan and identified it as a priority corridor for implementation. The State Government declared the project as a "public vital infrastructure project" and designated the MMRDA as the Project Implementation Agency (PIA).[19] The master plan unveiled by the MMRDA in 2004 encompassed a total of 146.5 kilometres (91.0 mi) of track, of which 32 kilometres (20 mi) would be underground.[20] The Mumbai Metro was proposed to be built in three phases, at an estimated cost of₹19,525 crore.[19] In September 2009, the proposed Hutatma Chowk – Ghatkopar was reduced to a line between Hutatma Chowk and Carnac Bunder.[21] In 2010, the MMRDA revised the estimated cost of constructing the nine lines to ₹36000 crore (US$5.4 billion).[20] In November 2010, it was decided to extend the Ghatkopar-Mulund route to Teen Haath Naka in Thane.[21]
In 2011, the MMRDA unveiled plans for an extended Colaba-Bandra-SEEPZ metro line. According to its earlier plans, a 20-km Colaba-to-Bandra metro line was to be constructed, running underground for 10 kilometres (6.2 mi) from Colaba to Mahalaxmi, and then on an elevated track from Mahalaxmi to Bandra. However, the MMRDA decided to increase ridership on the line by running it out past Bandra to Chatrapati Shivaji International Airport. The 33.5-kilometre (20.8 mi) Colaba-Bandra-SEEPZ line will be built at a cost of ₹21000 crore (US$3.2 billion),[22] and will be the city's first underground metro line. It will have 27 stations.[23]
On 27 February 2012, the Union Government gave in-principle approval to the plan for Line 3. Money for the project is being borrowed from Japanese International Cooperation Agency (50%), the state government (16%), the central government (14%), and others.[24] In April 2012, the MMRDA announced plans to grant the Mumbai Metro Rail Company increased management autonomy, in an effort to enhance the project's operational efficiency.[25] In July 2012, the MMRDA announced plans to add more metro lines to its existing plan, including a line parallel to the Western Express Highway from Bandra to Dahisar. This line is expected to reduce the passenger load on the Western Line and vehicle traffic on the highway. Another proposed route, the 30-kilometre (19 mi), 28-station Wadala–Kasarvadvali line, received in-principle approval from the state government in 2013.[26] The MMRDA also intends to convert the proposed Lokhandwala–SEEPZ–Kanjurmarg monorail route into a metro line.[27]

A metro station under construction in Andheri in March 2012.
The Mumbai Metro master plan was revised by the MMRDA in 2012, increasing the total length of the proposed network to 160.90 km.[28] In June 2015, two new lines were proposed. A line from Andheri West to Dahisar West, and a line from BKC to Mankhurd.[29] The following table shows the updated master plan unveiled by the MMRDA: Line | Name of Corridor[30] | Length (km) | Estimated cost | Status | 1 | Versova–Andheri–Ghatkopar | 11.40 | ₹2356 (in 2012) | Opened | 2 | Dahisar–Mankhurd | 40.2 | | Planning | N/A | Charkop–Bandra–Mankhurd | 32 | ₹7660 (in 2012) | Proposed as Line 2; merged with Charkop–Dahisar line. | N/A | Charkop–Dahisar | 7.8 | ₹4680 (in 2012) | Proposed as Line 4; merged with Charkop–Bandra–Mankhurd line. | 3 | Colaba–Bandra–SEEPZ | 33.5 | ₹24,430 | Tendering | 4 | Wadala–Ghatkopar-Mulund–Teen Hath Naka (Thane)–Kasarvadavali | 32 | ₹8757 (in 2012) | Previously, planned as Line 5 | N/A | Wadala–Carnac Bunder | 13.5 | ₹2635 (in 2012) | Proposed as Line 6; Cancelled[31] | 7 | JVLR–Kanjurmarg | 12 | ₹4200 (in 2015) | Planning; SEEPZ–Kanjurmarg line (10.5 km) extended to JVLR.[32] | 8 | Andheri (E)–Dahisar (E) | 18 | ₹6,300 (in 2015) | Planning | 9 | Sewri–Prabhadevi | 3.50 | ₹2100 (in 2012) | | | Andheri (W)–Dahisar (W) | 18 | ₹6,300 (in 2015) | Planning[33] | | BKC–Mankhurd | 12 | ₹4200 (in 2015) | Planning[34] | Total | | 160.90 | ₹67618 crore(US$10 billion) | |
On 18 February 2013, the MMRDA signed a memorandum of understanding with Transport for London, the transit authority in Greater London. The arrangement will facilitate the exchange of information, personnel and technology in the transportation sector.[35][36][37][38]
The revised Mumbai Metro master plan had proposed a line along the Thane-Teen Haath Naka-Kaapurbavdi-Ghodbunder Road route. The feasibility report concluded that the line was not feasible as most residents of Thane and its neighbouring areas travelled to Mumbai for work daily. On 14 June 2014, Chavan announced that the MMRDA was instead examining a proposal for a metro line along the new proposed route of Wadala-Ghatkopar-Teen Haat Naka route. RITES will prepare the detailed project report and is expected to submit it by August 2014. The preliminary report proposed a 32 km line with 29 stations, to be built at an estimated cost of ₹22,000 crore.[39] This would be the fourth line of the metro, after the previously proposed Charkop-Dahisar route was merged with the Charkop-Bandra-Mankhurd route to form Line 2.[40]
Following the opening of Line 1, MMRDA metropolitan commissioner UPS Madan stated that the authority would focus on constructing the Colaba-Bandra-SEEPZ, Dahisar-Bandra-Mankhurd, and Wadala-Thane-Kasarvadavali lines. He also stated that the other proposed lines had not been cancelled and that they may be implemented in the future.[31] In May 2015, the MMRDA stated that it had begun planning for the Andheri-Dahisar line and Seepz-Kanjurmarg. Both lines are expected to be elevated, although the latter could be constructed underground if a proposal to extend Line 3 to Kanjurmarg is undertaken. DPRs for both lines had been prepared in 2004, along with the master plan, and the MMRDA would now update the DPRs. The agency also intends to construct Line 9 of the metro as an underground corridor from Sewri to Worli. However, planning for the project will only begun after the construction of the proposed Mumbai Trans Harbour Link commences.[41]
In a report on 14 November 2014 about the cancellation of the PPP agreement for Line 2, Mint quoted a senior MMRDA official as stating, "as decided earlier, all future lines of Mumbai Metro will be constructed by the Mumbai Metro Railway Corp. Ltd (MMRCL), a joint venture between the state government and the Union government."[42] On 20 May 2015, Chief Minister Devendra Fadnavis requested officials to consider constructing the Charkop-Bandra-Dahisar and the Wadala-Thane-Kasarvadavali lines as elevated corridors. Although, both corridors had been planned as elevated lines in the Mumbai Metro master plan, the previous Congress-NCP had decided to construct all metro lines underground, after delays and difficulties caused by acquiring land for Line 1. However, Chief Minister Fadnavis believes that the two proposed lines can be constructed quicker and cheaper if they were elevated due to the proposed route of the alignment.[43] The Government plans to implement all future metro lines (except Line 3) as elevated corridors.[44] On 15 June 2015, the MMRDA announced that it would implement Line 2 of the metro in three parts. The Andheri-Dahisar line will have connectivity with the existing Line 1 and the proposed JVLR-Kanjurmarg line.[45]
In June 2015, Fadnavis announced that he would request the DMRC to assist in the implementation of the Mumbai Metro. He stated that he intends to expand the metro system by 109 km before the state assembly elections in October 2019.[46][47][48] In July 2015, UPS Madan announced that the State Government formally appointed the DMRC to revise and update the Mumbai Metro master plan. The DMRC will prepare DPRs for the Andheri East to Dahisar East, Jogeshwari to Kanjurmarg, Andheri West to Dahisar West and Bandra Kurla Complex to Mankhurd lines.[49] The Andheri-Dahisar line will have connectivity with the existing Line 1 and the proposed JVLR-Kanjurmarg line.[50] All four lines are proposed to be elevated and constructed as cash contracts. The lines are estimated to cost a total of ₹21000 crore (US$3.2 billion), or about ₹350 crore (US$53 million) per km.[51] In addition, the planned Line 3 and Wadala-Ghatkopar-Thane-Kasarvadavli line of the metro would also be constructed.

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Grand Metro

...The pound-based WACC for Grand Met is 12.81%, while its dollar-based WACC is 11.01% 1.748 (1.027/1.043) = 1.721185  Spot rate, expected exchange rate. This shows that the dollar is appreciating in relation to the pound. This is expected as inflation is expected to be higher in the UK. This also explains the differences in the WACC between the two countries. In order to preclude arbitrage opportunities and account for difference in inflation rates, pound-based WACC has to be higher than the dollar-based WACC. 3. As is mentioned in the case, in the footnotes on page 6, the betas for the US and UK markets are mirrored in the betas for Grand Met in the two countries. The market volatility in the US is 4% lower than the market volatility in the UK. The difference in standard deviation of returns is factored into the country’s betas, which in turn is factored into the Grand Met beta calculations. In addition to that, we are told that there is perfect correlation between the two markets, which means they move together. The difference in the betas, then, reflects the way investors approach risks: it seems that the UK investors are more risk averse than the US investors. Additionally, we think that the differences in risk free rates in the two countries contribute to the different betas and different perceptions of risk between the US and UK investors. While the risk free rate in the US is 7.83%, the risk free rate in the UK is 9.6%. Because investors receive a higher...

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