Meerut Muzaffarnagar Road Project

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National Highways Authority of India (NHAI) awarded a 20 year concession to Western UP Tollway Limited (WUTL) to upgrade, finance, operate and maintain the 78.31 km section on National Highway 58 (NH-58) between Meerut and Muzaffarnagar, in Uttar Pradesh State. The project included four-laning of the existing two lane stretch; construction of three railway overbridges, one flyover, two major bridges, seven underpasses, service roads, four truck laybys and one rest area on Khatauli bypass. The concession term included the construction period of 36 months. The concession agreement between NHAI and WUTL was signed in September 2005. This concession 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. WUTL, a special purpose company established to implement this project, was jointly owned by three Indian firms namely - Nagarjuna Construction Company Limited (30%), Maytas Infra Private Limited (30%) and Gayatri Projects Limited (40%). WUTL won the project in an international competitive tender, conducted by NHAI, by bidding for the lowest grant in the amount of US$ 28.2 million. 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. The total capital cost of the project was estimated at US$ 79.5 million. The project reached financial closure in May 2006. The debt was raised by a consortium of banks that included Bank of Baroda, Canara Bank, Syndicate Bank, and Corporation Bank. WUTL was to be compensated for the capital and operating costs from the tolls collected during the concession term. Construction work on the project began in March 2006 and was expected to be completed by March 2009.