Nagpur Seoni Expressway Limited

active

In November 2007, the National Highway Authority of India (NHAI) signed a 20 year concession contract (including two and a half years of construction period) to a consortium formed by India’s Sadbhav Engineering Limited (51%) and SREI Infrastructure Finance Limited (49%)to widen and strengthen the 56 km section on National Highway (NH) 7 between Lakhnadon to MP border, in the state of Madhya Pradesh. Under the contract, the consortium had to design, construct, finance, operate,maintain and widen the existing two-lane highway to a four-lane highway with paved shoulders. The expansion project, part of National Highway Development Project – North South Corridor, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium established Nagpur Seoni Expressway Limited, a special purpose vehicle,to implement the project. The consortium won the tender through competitive bidding, conducted by NHAI, by making the lowest annuity payment request from NHAI. Under the contract, the SPV was to recover the capital and operating costs including returns through a fixed annual payment (annuity) from the NHAI in the amount of US$ 17.7 million during the concession term (excluding two and a half years of construction period). Under the annuity scheme, the private operator cannot collect tolls from the users of the facility. The project reached financial closure in November 2007.The total capital cost of the project was estimated at US$ 102 million. Construction on the project began in November 2007 and was expected to be completed by May 2010. www.projectstoday.com www.pppinindia.com www.nhai.org www.infrastructure.gov.in