SMI-Netzone LRMT Purple Line Railway Project

For the design, planning, construction, development, completion, commissioning and

operation of the 76 kilometre PURPLE LINE rail mass transit (LRMT)
Business Plan

Table of Contents
EXECUTIVE SUMMARY........................................................................................................1

FAST FACTS – PURPLE LINE TRAIN SERVICE – PHASE ONE ...............................................................2

CONSTRUCTION COST ESTIMATES-PHASE ONE...............................................................................3
FDI FUNDING REQUIRED FOR SMI-NETZONE LRMT PURPLE LINE PROJECT IN LAGOS – NIGERIA...........3
PROJECTED FINANCIALS – SNAPSHOT ANALYSES.............................................................................4

EXECUTIVE SUMMARY
SMI Holding Group International has entered into a Joint Venture Contract of Agreement
with Netzone Engineering Limited with the following objectives:
 To design, built, operate and maintain the 76 kilometre PURPLE LINE rail mass transit
(LRMT) by way of concession conferred upon the Joint Venture Company called SMI-
Netzone as a Special Purpose Vehicle to execute the Project by the Lagos State
Government (LGSG) in conjunction with LAMATA;
 The PURPLE LINE (LRMT) is Cross City 76 km proposed 1+16 stations metro line,
starting at Redeemed at the north-west point of Lagos-Nigeria (also depot and
assembly plant for rolling stock) ending at the south-east point of Agbara;
 The Lagos State Government (LGSG) through LAMATA has developed a Strategic
Transport Master Plan which aims to move Metropolitan Lagos beyond its current
challenges; the plan identifies possible transport facilities and services to manage the
growing travel demand by 2020;
 The PURPLE LINE (LRMT) Strategic Transport Master Plan in particular, envisions a
network of bus, rail and water based rapid transport systems serving strategic activity
centres across the state;
 The master plan has systematically identified a strategic Lagos Urban Rail Network
comprising seven (7) LRMT corridors as part of an integrated multimode MRT system.

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 Through LAMATA, Lagos State Government (LGSG) the SPV will commence with the
implementation of the PURPLE LINE (LRMT) due for completion by 2022/2023;
 Lagos is the most populous City in Nigeria with a population of 22 million people
 This Project will give effect into job skills transfer and result in an immediate poverty
alleviation;
 The initial construction period is estimated at 5 years;
 The concession is for the Project Term of 20 years commencing from the date of
commissioning and official operation of the Project (2022-2037);
 The Project will be completed in 3 Phases;
 Phase 1 starts at Redeem (also depot and assembly plant for rolling stock) and ends
at Iyana Ipaja covering a rail distance of 35km and comprise 7 stations (1) Redeem (2)
Mowe (3) Long Bridge (4) Isheri (5) Toll Gate (6) Agege (7) Iyana Ipaja;
 Iyana Ipaja will also extend and service the 6km corridor with two stations (1)
Alimosho (2) Murtala Muhammed International Airport;
 Phase 2 continues from Iyana Ipaja and ends at Lasu covering a rail distance of 25km
and comprise 6 stations (1) Egbeda (2) Ejigbo (3) Igando (4) Iba (5) Estate (6) Lasu;
 Phase 3 starts at Lasu and ends at Agbara covering a rail distance of 16km and
comprise 3 stations (1) Okokomaiko (2) Ojo (3) Agbara.
Fast Facts – Purple Line Train Service – Phase One

 This section of the business plan will mainly focus on the aspects, costs and elements
for Phase 1;
 Exchange rate: 1 USD = 293.5589 NGN or 1.00NGN = 0.00338409 US$
 Operational hours – 5h30 to 22h30, 7 days a week, 365 days per year;
 Train configuration and capacity – 10 x 14-car trains (1120 seated and 480 standing
passengers per 14-car train); initially increasing to 18-car trains in time if need be;
each individual car (coach) has the capacity to carry 80 seated and 34 standing
passengers); it means 16,000 passengers (commuters) during every 6-hours peak
time period (06h00-09h00 and 16h00-19h00 or 96,000 passengers), and 8,000
passengers every other 11 off-peak hours period (05h30-06h00 and 09h00-16h00 and
19h00-22h30) which equates to 184,000 passengers (commuters) per day;
 Estimated Daily Fare Revenue per passenger during peak hours is US$2,.0050
generating a projected Fare Revenue Income of US$24,000;$368,000
 Estimated Daily Fare Revenue per passenger during peak hours is US$1,50 generating
a projected Fare Revenue Income of US$276,000;
 The Projected Gross potential Income GPI/ Fare Revenue =
US$134,000,000109,500,000 + US$40,500,000 in Commercial Real Estate Leases i.e.
shops, restaurants etc.)
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  The manufacturing and maintenance cost per unit (car) is ± US$5,000,000;3,000,000
 Journey Time – Cross City 35km proposed 1+6 stations metro line, starting at Redeem
Agbara and ending at Iyana Ipaja in Lagos-Nigeria in 48 minutes; The Purple Line
headways are currently projected to be at 48 minutes during peak periods, 40
minutes during off-peaks and 35 minutes over weekends;
 Iyana Ipaja to the airport in 10 minutes;
 Train Intervals and availability – 40 minutes at peak hours and 50-60 minutes off-
peak and at weekends;
 Train availability – 99.5%;
 Punctuality – 95%;
 Fares – Lower than private car running costs, equal or slightly higher than mini-bus
taxis.
Construction Cost Estimates-Phase One

 Average cost of construction of 1km is estimated at US$7,000,000;

 Average construction cost of the bridge overpass per km is $40,000,000
 On 41km it is estimated to be in the region of US$287,000,000 plus contingency;
 Associated infra-structure including a power-plant, assembly line at Redeem is
estimated at US$150,000,000676,688,100;
 Total estimated manufacturing and maintenance cost for Rolling Stock is
US$420,000,000;
FDI Funding Required for SMI-Netzone LRMT Purple Line Project in Lagos – Nigeria

Category A – Total Estimated Construction US$287,000,000 (excluding

Cost for railway tracks, power lines, stations contingencies)
and associated infra-structure
Category B – Total Estimated Cost for US$150,000,000676,688,100 (excluding
associated infra-structures and power-station contingencies)
Category C – Total Estimated Cost for Rolling US$420,000,000 (excluding
Stock manufacturing and maintenance Cost contingencies)
Total Funding Required US$1,270,100.000383,688,100
Total Estimated Project Cost per km US$33,748,490

Projected Financials – Snapshot Analyses

Year 1

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Average Fare Rate per passenger $2,00
No of Passengers per day 280,000
Fare Revenue ($) $109,500,000204,000,000
Lease Revenue $40,500,000
Gross Potential Revenue $204,000,000150,000,000
Infrastructure Maintenance ($) $3,390,625
Stations Maintenance ($) $10,000,000
Insurance ($) $25,000,000
Administration at 10% ($) $10,000,000
EBITDA $101,609,375
Capital Repayment $70,873,111
Profit $30,736,264
Depreciation $10,000,000
Profit $20,736,264
Tax at 30% $6,220,879
NOPAT $14,515,385

The cashflow cover the loan payment with a net operating profit after tax of xxxxx. The
earning before interest amortization and taxation is xxxxxxx. The coverage ratio is xxxx
which makes the project economically attractive.