Jalandhar Amritsar Tollways Limited

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In June 2005, National Highways Authority of India (NHAI) awarded a 20 year concession contract to India’s IVRCL Infrastructures & Projects Ltd. (IVRCL) for the upgrade, operation and maintenance of the 49 Km stretch on National Highway 1 (NH-1), between Jalandhar and Amritsar, in the State of Punjab. Under the contract, IVRCL was required to design, finance and widen the existing two-lane stretch to a four lane duel carriageway in return for the right to collect tolls during the concession term. This road expansion was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The concession term included the construction period of 30 months. IVRCL established a special purpose company, Jalandhar Amritsar Tollways Limited, to implement this project. IVRCL won the concession in an international competitive tender conducted by NHAI by making the lowest subsidy request in the amount of US$ 8.7 million. The total capital cost of the project was estimated at US$ 52.5 million. The project reached financial closure in July 2006. The project was financed through a combination of equity (US$ 9.1 million), debt (US$ 34.7 million) and a grant from NHAI in the amount of US$ 8.7 million. The debt was financed by Canara Bank, Allahabad Bank, State Bank of Bikaner and State Bank of Jaipur. Construction work on the project began in May 2006 and was expected to be completed by November 2008.

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