Aurangabad Barwa Adda Expressway Limited

cancelled

On 31st March 2012, the National Highway Authority of India (NHAI) awarded a 30-yearconcession (including construction period of 30 months) to KMC Constructions Limited for the strengthening,improvement, six-laning,operation and maintenance, and tolling of 221.346 kms of Aurangabad-Barwa Adda section from km.180.00 to km.398.750 of National Highway-2 (NH-2) in the states of Bihar (70kms) and Jharkhand (151.346kms). Under the contract, KMC was responsible for the design, construction, finance,operation and maintenance and strengthening of the existing 4-lane carriageway to a six-lanehighway with paved shoulders. The scope included construction of 6-lanes including construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections, interchanges, toll plaza, tunnel section, etc.The expansion project was part of National Highway Development Project Phase-V. KMC established Aurangabad Barwa Adda Expressway Limited (ABEL), a special purposevehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by quoting the highest annual premium. The SPV would would pay NHAI a sum of US$ 25.3mn (INR 1350mn @53.44 INR/USD) in the first year of operations with 5% increase in each subsequent year (This amounted to an NPV payout of about US$ 401.1mn over the life of concession period at a discount rate of 10%). There were 16 pre-qualified bidders for the project. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. Construction on the project was expected to began in November 2012 (expected appointed date as per standard CA conditions). But delay in getting the necessary clearance from the Ministry of Environment & Forests (MoEF) had led to NHAI abandoning the project. Till September 2013, NHAI had already incurred expenses of INR 32mn on the project.In November 2013 NHAI finally cancelled the concession for the project. The concession agreement was signed on 18th May 2012. The estimated cost of the project at the time of bidding was US$ 437.9mn (INR 23400mn @53.44 INR/USD). Funding closure had not been achieved at the time of cancellation of the project.