Orai Barah Highway Project

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In January 2006, National Highways Authority of India (NHAI) awarded a 17.5 year concession to OB Infrastructure Limited (OBIL) to upgrade, finance, operate and maintain 62.8 km of highway in Uttar Pradesh state: Orai-Bhognipur (35 km) section of National Highway number 25 and Bhognipur-Barah (27.8 km) section on National highway number 2. The project primarily involved conversion of the existing two lane road to a four lane expressway. The concession term included a construction period of 30 months. OBIL, a special purpose company established to implement this project, was a joint venture between Nagarjuna Construction Company Ltd (64%) and KMC Constructions Ltd (36%). OBIL won the project in an international competitive tender, conducted by NHAI, by quoting the lowest annuity. Under the concession, OBIL was compensated for the capital costs and operating costs including returns by way of a fixed semi annual payment (annuity) from the NHAI in the amount of US$ 9.9 million during the operational period of 15 years. Under the annuity scheme, the private operator (OBIL) cannot collect tolls from the users of the facility. The total capital cost of the project was estimated at US$ 117.3 million. Construction work on the project began in October 2006 and was expected to be completed by April 2009. None None