Kannur Vengalem NH17 Road

Cancelled

Failure

On 20th July 2009, National Highway Authority of India (NHAI) awarded a 23-year concession (including construction period of 910 days) to KMC Constructions Limited, for the strengthening, improvement,4-laning,operation and maintenance, and tolling of 81.5kms of Kannur-Vengalem section from KM230.000 to KM318.000 of National Highway 17, in the state of Kerala. Under the contract, KMC was responsible for the design,construction,finance, operation and maintenance,strengthening and widening the existing 2-lane carriageway to 4-lane divided carriageway.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 expansion project, part of the National Highway Development Program (NHDP-IIIB), was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. KMC won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest grant of US$ 113.8mn (INR 5202mn @45.72 INR/USD).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 24th February 2010. The project didnot close financing at the time of cancellation. The estimated capital cost of the project at the time of bidding was US$ 286.9mn (INR 13120mn @45.72INR/USD). The project was expected to start construction by May 2010. However, even after a lapse of three-and-a-half years, the requisite land/right of way (ROW) could not be made available by NHAI. For the Kannur-Vengalam section, only 34 per cent of land, that too of the existing ROW, was available. Finally NHAI canceled the concession in November 2013.

Transport

World Bank Group

Project

Commercial, Road, Waste Processing and Treatment, Bridge, Government