Thrissur Angamali Highway Project

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In April 2006, National Highways Authority of India (NHAI) signed a 20 year concession agreement with Guruvayoor Infrastructure Private Limited (GIPL) to upgrade, finance, operate and maintain the 65 km section on National Highway 47 (NH-47) between Thrissur and Angalmali, in the southern state of Kerala. The project primarily involved conversion of the existing two lane road to a four lane access controlled expressway. The concession term included a construction period of 30 months. This road upgrade project was part of NHAI’s National Highway Development Project Phase II (or North South Corridor) connecting Srinagar (Kashmir State) with Kanyakumari in Tamil Nadu State. GIPL, a special purpose company established to implement this project, was a joint venture between KMC Constructions Ltd (51%) and SREI Infrastructure Finance Limited (49%). GIPL won the project in an international competitive tender, conducted by NHAI, by offering to pay US$ 47.5 million to NHAI. This payment was payable to NHAI in six installments. 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. However, in high traffic density corridors like this one that are very profitable, the bidders usually offered an upfront payment to NHAI instead of seeking a grant. The total capital cost of the project was estimated at US$ 121.4 million. The project reached financial closure in October 2006. GIPL 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 September 2006 and was expected to be completed by March 2009. None None