Padalur Trichy Highway Project

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In 2006, National Highways Authority of India (NHAI) awarded a 25 year concession to Indu Navayuga Infrastructure Private Limited (INIPL) to upgrade, finance, operate and maintain the 40 km section on National Highway 45 (NH-45) between Trichy and Padalur, in the southern state of Tamil Nadu. The project included four-laning of the existing two lane 40 km stretch; construction of three major bridges (across rivers Cauvery, Kollidam and Uppar), eleven minor bridges, five major railway overbridges, and two flyovers. The concession term included the construction period of 30 months. INIPL, a special purpose company established to implement this project, was a joint venture between two Indian firms namely - Navayuga Group and Indu Group. However, the exact shareholding structure of INIPL was not publicly available. The Indu-Navayuga consortium won the project in an international competitive tender, conducted by NHAI in August 2005, by bidding for the lowest grant (US$13.24 million). India’s highway development policy allowed ‘viability funding’ by NHAI to the tune of 40 percent of the capital costs as grant to the concessionaire, subject to competitive bidding. The total capital cost of the project was estimated at US$ 90.7 million. The project reached financial closure in December 2006. SBI Capital arranged a lean of US$ 58.7 million. INIPL was to be compensated for the capital and operating costs from the tolls collected during the concession term. Construction work on the project began in December 2006 and was expected to be completed by June 2009.