Bhopal - Dewas road project

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In March 2007, the Madhya Pradesh Road Development Corporation (MPRDC) signed a 25 year concession contract (including 30 month of construction period) to a consortium formed by MSK Projects Ltd., Chetak Enterprises Pvt. Ltd. and BSBK Pvt. Ltd. to strengthen and widen existing 143 km stretch of State Highway 18 (SH-18)from Bhopal to Dewas in the state of Madhya Pradesh Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and widening of the existing two-lane highway to a four-lane highway with paved shoulders. The expansion project was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium established Dewas-Bhopal Corridor Private Ltd. (DBCPL), a special purpose vehicle, to implement the project. The consortium won the competitive tender, conducted by MPRDC, by asking for the lowest fixed subsidy of US$ 20.25 million (entire subsidy being funded by Viability Gap Funding (VGF) scheme of Government of India). Apart from this upfront payment by MPRDC, under the contract, DBCPL was to recover the capital costs and operating costs including returns through tolls during the concession period (excluding construction period). The project reached financial closure in March 2007. The total capital cost of the project was estimated at US$ 106.66 million. Construction on the project began in March 2007 and was expected to be completed by September 2009. www.projectstoday.com MPSRDC