Essel Walajahpet Poonamallee Toll Roads Private Limited

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In May 2012, the National Highway Authority of India (NHAI) awarded a 20-year concession (including construction period of 30 months) to Essel Infraprojects Limited for the strengthening, improvement, 6-laning, operation and maintenance, and tolling of 93kms of Walajahpet to Poonamallee section of NH-4 (km 106.800 to km 13.800),in the State of Tamil Nadu. Under the contract, Essel Infra was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing 4-lane carriageway to a 6-lane highway 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, drains, etc.The expansion project, part of National Highway Development Project Phase-V would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Essel Infraprojects Limited established Essel Walajahpet Poonamallee Toll Roads Private Limited, a special purpose vehicle, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI, by quoting the highest annual premium. The SPV would pay NHAI a sum of US$32.4mn (INR 1620mn @50 INR/USD) in the first year of operations with 5% increase in each subsequent year (This amounted to an NPV payout of about US$ 396.9mn over the life of concession period at a discount rate of 10%). There were 37 pre-qualified bidders out of which 19 offered their final bids. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement was signed on 4th June 2012. The status of financing couldn't be ascertained at the time of collection of this information. The estimated capital cost of the project at the time of bidding was US$ 257.6mn (INR 12879.5mn @ 50 INR/USD) million. Construction on the project was expected to begin after the financial closure but Appointed Date was not confirmed by NAHI at the time of collection of this information.