MH/AP Border to Islam Nagar NH-7

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In May 2007, the National Highways Authority of India (NHAI) signed a 20 year concession contract to a consortium of India's Soma Enterprise Ltd. and Avinash N. Bhosale for the rehabilitation and upgradation of Km 175 (Maharashtra/Andhra Pradesh Border) to Km 230 (Islam Nagar) on NH-7 in the State of Andhra Pradesh under North-South Corridor (NHDP Phase II). The distance covered was about 55 kms. Under the contract, the consortium was responsible for the design, construction, development, finance, operation & maintenance and widening of the existing two-lane highway to a four-lane highway with paved shoulders. The highway was expected to ease traffic congestion of the existing north-south corridor and give significant stimulus to trade and commerce in the entire region. The consortium won the tender through competitive bidding, conducted by NHAI, by making the lowest annuity payment request. Under the contract, the project company was allowed to recover capital costs and operating costs including returns through a fixed annual payment (annuity) from the NHAI in the amount of US$ 15.74 million during the concession term. Under the annuity scheme, the private operator was not allowed to collect tolls from the users. The project reached financial closure in May 2007. The total capital cost of the project was estimated at US$ 90.1 million. Construction on the project began in May 2007 and was expected to be completed by November 2009. www.projectstoday.com APSRDC http://www.somaenterprise.com/what-we-do/transport.html