The massive project of six-laning the 225.6-km Gurgaon-Jaipur segment on NH-8 is expected to reach financial closure soon. The project is part of National Highways Development Programme (Phase V) that involves six-laning of a total of 6,500 km of existing four-lane highways nationwide.
Speaking to Projectmonitor, Shashank Shekhar, Vice President, KMC Constructions Ltd, said that negotiations with banks and other lending agencies were in the final stages and that financial closure would be attained very soon.
The project is being implemented on BOT-Toll basis by a 51:49 consortium between Emirates Trading Agency of UAE and New Delhi-based KMC Constructions Ltd. A special purpose vehicle, Pink City Expressways Pvt. Ltd, was formed earlier this year to implement the project. Expected to cost Rs 1,896 crore at the time of signing the concession agreement with NHAI in June this year, the cost of the six-laning project is now estimated at Rs 3,007 crore. Shekhar also elaborated that due to the ongoing liquidity crunch, the project might be restructured on a debt-equity ratio of 80:20 as against 70:30 envisaged earlier.
The project was moving well, Shekhar noted, explaining that around 70 per cent of the land was already in possession with NHAI expected to hand over the remaining land by March next year. Existing guidelines stipulate that physical work on national highway projects can begin if 60 per cent of land has been acquired. Accordingly, work on one package (out of the total six) has already been awarded to Unity Infraprojects Ltd. The Mumbai-based construction company will six-lane a 36.5-km stretch (km 144.77 to km 181.30 km) falling in Rajasthan. The Rs.375.25-crore contract is scheduled for completion within 30 months. "The remaining packages will be awarded in due course," the KMC top official said.
The Gurgoan-Jaipur section on NH-8 is a high-traffic corridor connecting Haryana and Rajasthan. The corridor (from km 42.7 to km 273.0) was four-laned as part of NHAI's Golden Quadrilateral project (Phase I of NHDP). The section is important as it amongst the early projects where NHAI has adopted the new model concession agreement where the nodal agency will have a share in the toll revenue generated. This contrasts the earlier approach where developers offered to make an upfront payment (also referred to as negative grant) to NHAI for granting the project (concession). For the Gurgaon-Jaipur project, the ETA-KMC consortium offered a revenue sharing proportion of 48 per cent that is amongst the highest seen so far. This proportion would increase by 100 basis points (1 percentage point) every year, up to the end of the 12-year concession period, which includes a construction period of 30 months.