Of the total cost of Rs 11,814 crore for the Hyderabad metro rail project, the central government agreed to provide Rs 1,458 crore or 12.35 per cent of the cost as viability gap funding (VGF).
The final approval for the VGF was given by the Empowered Committee headed by Department of Economic Affairs (DEA) Secretary Arvind Mayaram.
According to a government statement, the project is being developed on DBFOT (Toll) basis. VGF is typically provided in competitively bid projects.
Under VGF, the central government meets up to 20 per cent of capital cost of a project being implemented in public private partnership (PPP) mode by a central ministry, state government, statutory entity or a local body.
The state government, sponsoring ministry or the project authority can pitch in with another 20 per cent of the project cost to make the projects even more attractive for the investors.