Kondhali Telegaon Road Project

Active

In December 2005, National Highways Authority of India (NHAI) awarded a 20 year concession to Oriental Pathways (Nagpur) Private Limited (OPNPL) to upgrade, finance, operate and maintain the 50 km section on National Highway number six (NH-6) between Kondhali and Telegaon, in Maharashtra State. This project primarily involved strengthening and widening of the existing two lane stretch on NH-6 to a four lane dual carriageway. The concession term included the construction period of 30 months. The concession agreement between NHAI and OPNPL was signed in March 2006. This road upgrade was part of NHAI’s National Highway Development Project (NHDP) Phase III A. The objective of NHDP Phase IIIA was to widen (four lane) sections of national highways carrying high volume of traffic, connecting state capitals with the NHDP Phases I and II network and providing connectivity to places of economic, commercial and tourist importance. OPNPL, a special purpose company established to implement this project, was jointly owned by Oriental Structural Engineers Private Ltd. and Delhi Brass Consortium. OPNPL won the project in an international competitive tender, conducted by NHAI, by bidding the lowest subsidy. Note that information on the actual subsidy amount (positive or negative) and the ownership structure of OPNPL was not available from public sources. India’s highway development policy allowed ‘viability funding’ by NHAI to the tune of 40 percent of the capital costs as grant to the concessionaire, subject to competitive bidding. However, in high traffic density corridors that are very profitable, the bidders usually offered an upfront payment to NHAI instead of seeking a grant. The total capital cost of the project was estimated at US$ 60.75 million. OPNPL was to be compensated for the capital and operating costs from the tolls collected during the operational period of about 17.5 years. Construction work on the project began in September 2006 and was expected to be completed by March 2009. As per NHAI, the project was completed in March 2009 and is currently operational.