Lebad Jaora Road Project

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In August 2007, the Madhya Pradesh Road Development Corporation (MPRDC) signed a 25 year concession contract (including 24 month of construction period) to a consortium formed by India’s Essar Group to strengthen and widen the 125 km section on Lebad-Ratlam-Jaora-Mandsaur-Nayagaon of State Highway 31 (SH-31), in the state of Madhya Pradesh. Under the contract, Essar Group was responsible for the design, construction, finance, operation and maintenance and widening of the existing 2-lane highway to a 4-lane highway with paved shoulders. The expansion project was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Essar (through group companies -Pan India Network Infravest Pvt. Ltd., Suncity Projects Pvt. Ltd. and Essel Infraprojects Ltd.)established Western MP Infrastructure & Toll Roads Pvt. Ltd. (WMPITRPL), a special purpose vehicle to implement the project. Essar Group won the competitive tender, conducted by MPRDC, by offering the highest premium to MPRDC(4.76% of the total Realisable Fee during the first year which is to be increased in each subsequent year by 1% per annum, through the operation period). Under the contract, WMPITRPL was also allowed to recover the capital costs and operating costs including returns through tolling during concession period (excluding construction period). The project reached financial closure in August 2007. The total capital cost of the project was estimated at US$ 105 million. Construction on the project began in August 2007 and is expected to be completed by August 2009. www.projectstoday.com MPRDC