Kotakatta Kurnool Road Project

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In March 2006, National Highways Authority of India (NHAI) signed a 20 year concession agreement with Andhra Pradesh Expressway Limited (APEL) to upgrade, finance, operate and maintain the Kotakatta-Kurnool section on National Highway number seven (NH-7), in Andhra Pradesh state. This project primarily involved strengthening and widening of the existing two lane 74 km stretch on NH-7 to a four lane divided expressway. The concession term included a construction period of 30 months. APEL, a special purpose company established to implement this project, was a fully owned subsidiary of Infrastructure Leasing & Financial Services Limited (IL&FS). APEL won the project in an international competitive tender, conducted by NHAI, by bidding the lowest annuity amount of US$ 12.5 million. Under the concession, APEL was compensated for the capital costs and operating costs including returns by way of a fixed semi annual payment (annuity) of US$ 12.5 million from the NHAI during the operational period of 15 years. Under the annuity scheme, the private operator (APEL) cannot collect tolls from the users of the facility. The total capital cost of the project was estimated at US$ 164.4 million. The project reached financial close in April 2006. Construction work on the project began in September 2006 and was expected to be completed by March 2009. APEL appointed KMC Construction Limited for the construction works contract (EPC) and ITNL (IL&FS Transportation Networks Limited) for the operation and maintenance (O&M) of the project. None None