NK Toll Road Limited

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The National Highways Authority of India (NHAI) awarded a 20 year concession to India’s Reliance ADA Group for the upgrade, operation and maintenance of the 33.5 km stretch on National Highway 7 (NH-7) between Namakkal and Karur in Tamil Nadu State. The concession involved expansion of the existing two lane stretch to four lane road with paved shoulders; and construction of 11.5 km of service roads, one bypass (near Velur), six bridges, four flyovers, five underpasses and 20 bus stops. The contract also included the operations and maintenance of the already four-laned 10-km long Namakkal bypass. The concession term included a construction period of 30 months. This road expansion, part of the North-South Corridor under National Highways Development Project – Phase II, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Reliance ADA Group established NK Toll Road Limited (NKTRL), a wholly owned special purpose company, to implement this project. The concession agreement between NHAI and NKTRL was signed in Jan 2006. Reliance ADA Group won the project through an international competitive tender conducted by NHAI by requesting the lowest grant of US$ 5.3 million. Under the agreement, NKTRL was compensated for the capital and operating costs including returns from toll collections during the concession period. The total cost of the project was estimated at US$ 45.4 million. The project reached financial closure in October 2006. The loan, arranged by SBI Capital, was raised in the local rupee market and had a tenure of 16 years. Construction began in July 2006 and was expected to be completed by December 2008. None None