Delhi-Gurgaon Expressway

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Delhi-Gurgaon Super Connectivity Limited (DGSCL) was awarded the right to construct and manage a 28-km. Expressway on National Highway 8 to link Delhi with Gurgoan under a 17-year build-operate-transfer (BOT) contract in December of 2001. The project was located in India’s highest vehicle density region and Northern India’s commercial hub. The area had been experiencing high population and traffic growth and was given the highest priority by the Central Government. The project highway catered to both urban as well as through traffic and was to be used by local commuters and traffic headed towards IGI Airport, western ports, North Indian markets, as well as newly developed townships and localities in the vicinity. DGSCL was a special purpose vehicle (SPV) formed between the consortium of Jaiprakash Industries Ltd. (98.6%) and DS Constructions Limited (1.4%). DGSCL was formerly called Jaypee DSC Ventures Limited. The project was notable because the National Highways Authority (NHAI) had earmarked a grant of Rs 40 crore to enhance the attractiveness of the project and announced that the company that bid for the lowest grant would win. However, JPDS offered to “pay” NHAI Rs 61 crore for the right to build the six/eight lane expressway and collect tolls on it for 17 years and subsequently won the bid. In June of 2003 the project reached financial closure, raising Rs 383.30 crores as debt and 164.2 crores as equity to cover the estimated US$126 million cost of the project. Among the lenders were HUDCO, the Life Insurance Corporation (LIC), Punjab National Bank and non-banking finance company SREI International Finance. This was the first project to achieve financial closure under a BOT model in which 100% Foreign Direct Investments were allowed. Construction work on the project began in October of 2003 and was expected to be completed within 24 to 30 months.