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New Delhi Opens Airport Train, First Private City Railway

New Delhi’s 57 billion-rupee ($1.3 billion) airport rail-link, managed by Anil Ambani’s Reliance Infrastructure Ltd., began operations today, becoming India’s first privately run urban-train service.

The maiden commercial trip along the 23-kilometer (14-mile) railway took less than 20 minutes, Mumbai-based Reliance said in an e-mailed statement. By car, the journey can take as much as two hours during rush hour, according to the company’s Delhi Airport Metro Express Ltd. unit.

“I would love to use it,” said B.N. Kumar, chief executive officer of Mumbai-based Concept PR, who travels to the Indian capital at least once a month. “Traffic congestion is a big problem.”

Reliance, Larsen & Toubro Ltd. and GMR Group have won contracts to build and operate railways, airports and roads as India opens up investment to ease transport bottlenecks in an economy expanding more than 8 percent a year. The growth means that Indian cities will need 35 new rail-based transit systems over the next two decades, McKinsey & Co. said last year.

“Public-private partnerships are the way to go,” said Vinayak Chatterjee, chairman of Gurgaon, India-based Feedback Ventures Pvt., which advises on construction projects. The Delhi airport railway is “a very interesting model,” he said.

Construction Delays

A trip on the airport train from the main New Delhi Railway Station to terminal three, which opened in July, will initially cost 80 rupees, Reliance said. The fare will eventually climb to 150 rupees, it said. The line, which took 27 months to build, has four other stops.

Services were meant to begin before New Delhi hosted the Commonwealth Games in October. They were delayed for “various reasons beyond our control,” Delhi Airport Metro Director Krishna Maheshwari said by e-mail yesterday, without elaboration.

Reliance surged 12 percent to 696.9 rupees in Mumbai trading today, the biggest jump since May 2009. The company expects to raise 80 billion rupees of debt in a month for planned projects, Chief Executive Officer Lalit Jalan said in an interview published in the Mint newspaper today.

The cost of the New Delhi airport train was about equally divided between state-run Delhi Metro Rail Corp. and Reliance, which will run the line for 30 years. Delhi Metro, operator of the city’s subway system, built tunnels and other infrastructure, while Reliance and partner, Beasain, Spain-based trainmaker Construcciones y Auxiliar de Ferrocarriles SA, paid for the tracks, trains and other equipment.

Metro-Rail Bids

Completion of the airport link will help Reliance bid for other metro projects in India that may be worth 750 billion rupees over the next 10 years, Maheshwari said in August. A Reliance-led group last year won a contract to build the second stage of a 110 billion-rupee rail project in Mumbai.

Delhi Metro is also expanding its rail network into more suburbs to ease congestion in the capital, which was home to 16.8 million people in 2007, according to the latest city-government estimate. That was a 22 percent increase from the 2001 census figure. Bombardier Inc., the world’s biggest trainmaker, opened a plant in western Gujarat state after winning a contract to supply 538 cars to the rail operator.

Larsen & Toubro, India’s biggest engineering company, last year won a deal to build and operate a metro-rail network in the southern city of Hyderabad. State governments are also building railways in the cities of Chennai and Bangalore.

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