Mumbai Nasik Expressway Limited

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In October 2005, National Highways Authority of India (NHAI) signed a 20 year concession agreement with Mumbai Nasik Expressway Limited (MNEL) for the upgrade, operation and maintenance of the 100 km stretch on National Highway 3 (NH-3), between Vadape and Gonde, in the state of Maharashtra. Under the agreement, MNEL was required to design, finance and widen the existing two-lane stretch to a four lane highway with paved shoulders in return for the right to collect tolls for 20 years. The project also included construction of three major bridges, six railway over bridges, six underpasses for vehicles, eight pedestrian and cattle crossing, and nice truck laybys. The concession term included the construction period of three years. This road upgrade project, part of National Highway Development Project – Phase III A, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. MNEL was a jointly owned by three Indian firms namely: Gammon India Limited, Sadbhav Engineering Limited (20%) and B.E. Billimoria & Company Limited. However, the exact ownership structure of MNEL was not publicly available. MNEL won the concession in an international competitive tender, conducted by NHAI, by bidding for the lowest grant of US$ 17.7 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$ 128 million. The project reached financial closure in May 2006. The debt was arranged by a consortium led by SBI Group. Construction work on the project began in April 2006 and was expected to be completed by April 2009. None None