Of India's largest highway project yet

Eleven players are in the fray to construct India’s largest-ever highway project. The 555-km Ahmedabad-Udaipur-Kishangarh stretch is expected to cost nearly Rs 5,400 crore, which is sufficient to build a power project that generates 1,340-megawatt electricity. And, the stretch could also help the government generate revenues of nearly Rs 10,000 crore over 20 years since the stiff competition is expected generate a premium during the bidding process that will now commence. The list of shortlisted developers ranges from domestic giants L&T, GMR and Tata Infrastructure to First Pacific from the West Indies, Australia’s Leighton and Malaysia’s IJM. In addition, players such as GVK have formed a joint venture with Australia’s Belford, while Nagarjuna Construction is bidding in partnership with Malaysian major Plus. Similarly, Hindustan Construction has tied up with Italian infrastructure company Vince as its partner, while local players Reliance Infra and IRB and Isolux and Soma have set up their own joint ventures. This Kishangarh–Udaipur-Ahmedabad section, which is spread over NH -79A, NH-79, NH-76 and NH-8, covers parts of Rajasthan and Gujarat. The stretch that falls under the crucial Golden Quadrilateral (GQ) network is already four-laned and is now being upgraded into a six-lane highway. “This is a lucrative highway sector with over 40,000 tolled vehicles plying on this stretch. The traffic on this corridor will increase manifold since it a crucial link to the Jawaharlal Nehru Port and the Mumbai-Pune expressway,” said a senior NHAI official. Sources said that while the Public Private Partnership Appraisal Committee (PPPAC) has set the benchmark of bidding out this project at not less than Rs 298 crore premium, the NHAI expects to get over Rs 400 crore, considering the competitive bidding by global infrastructure majors. “It’s a big project for us. We will annually get the premium amount with an additional 5% increase every successive year,” said an official. So, if a company bids, say, Rs 400 crore, it has to pay the first installment as and when the deal is signed. The second year, the premium, which is referred to as a positive grant, would rise to Rs 420 crore, after factoring in the 5% increase. In the third year, it will go up further to Rs 441 crore. Typically, the concession period is 20 years, which can be longer in certain cases. NHAI has earned over Rs 800 crore as premium this year from various projects that have been bid out. This could almost double to Rs 1,500 crore by the close of the year.