Trichy Tollway Private Limited

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In July 2006, National Highways Authority of India (NHAI) signed a 20 year concession agreement with Trichy Tollway Private Limited (TTPL) for the upgrade, operation and maintenance of the 92.75 km stretch on National Highway 45 (NH-45), between Ulundurpet and Padalur, in the southern state of Tamil Nadu. Under the agreement, TTPL was required to design, finance and widen the existing two-lane stretch to a four lane highway with paved shoulders in return for the right to collect tolls for 20 years. The concession term included the construction period of 30 months. This road expansion project was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. TTPL was a joint venture with equal ownership between Mumbai based Shroopji Pallonji Group and Malyasian IJM Berhad. The IJM consortium won the concession in an international competitive tender, conducted by NHAI, by bidding for the lowest grant of US$ 8.83 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$ 125 million. The project reached financial closure in November 2006. The debt was arranged by a consortium led by SBI Group. Construction work on the project began in November 2006 and was expected to be completed by April 2009.