IVRCL Narnaul Bhiwani Tollways Limited

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In February 2012, the Government of Haryana (Public Works Department) awarded a 20-year concession (including construction period of 30 months) to IVRCL Assets and Holdings Limited (an IVRCL Limited Company) for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 151 kms of Rai Malikpur (Rajasthan Border) – Narnaul - Mahendragarh – Dadri –Bhiwani – Kharak corridor, in the state of Haryana. The project highway includes four new four-lane bypasses of Nangal Choudhary (4.305 km), Narnaul (8.0 km), Nangal Shirohi (3.475 km) and Bhiwani (8.9 km). Under the contract, IVRCL was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 4-lane highway with paved shoulders. The scope included construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc. The Government of India, Ministry of Road Transport and Highways (MORTH) through Public Works Department (PWD), Government of Haryana had decided to take up the development of various National Highway Corridors for augmentation of capacity for safe and efficient movement of traffic by widening existing roads with paved shoulder. Under this program, this project was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The Rai Malikpur - Kharak corridor would serve as major interstate connectivity between Rajasthan, Gujarat and Maharashtra to northern states of Punjab, Himachal Pradesh and Jammu and Kashmir and would give a major fillip to the interstate North-South connectivity between the States. IVRCL Assets and Holdings Limited established IVRCL Narnaul Bhiwani Tollways Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by PWD Haryana, by quoting the highest annual premium. Details of bidding couldn't be ascertained. However it was understood that Haryana PWD (through Govt. of India's VGF scheme) had budgeted a grant of INR 2403mn (US $48.1mn), whereas the bidding resulted in premium payment of INR 4850mn (US$ 97mn, which works out to be an annual premium of US$ 5.5mn) to the Haryana Government through the life of concession. There were 24 pre-qualified bidders out of which only 4 had finally bid. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. IVRCL would execute the EPC for this project. The concession agreement was signed on 30th November 2012. The project was expected to attain financial closure in June-July period of 2013. The estimated capital cost of the project at the time of bidding was US$ 240.3 (INR 12017mn @50 INR/USD) million. Construction progress on the project was expected to begin in December 2012 and be completed by June 2015.