Vijayawada Machiliapatnam Expressways Limited

Cancelled

In November 2011,the National Highway Authority of India (NHAI) awarded a 20-year concession (including construction period of 2 years) to Madhucon Projects Limited (MPL) for the strengthening, improvement, two-laning, operation and maintenance,and tolling of 63kms Vijayawada–Machiliapatnam Section of NH-9, in the state of Andhra Pradesh. Under the contract, Madhucon Projects Limited was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a two-lane highway with paved shoulders. The scope included construction of new pavement, rehabilitation of existing pavement, construction and rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc. The expansion project, part of National Highway Development Project Phase-III would ease traffic congestion and give significant stimulus to trade and commerce in the entire region.This road will be the link between Machilipatnam port (under development by Navayuga) to Vijayawada which was a major trading and business center. Madhucon Projects Limited established Vijayawada Machiliapatnam Expressways Limited on 28th November 2011, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest upfront subsidy of US$ 41.8million (INR 2090mn @50 INR/USD). Out of the 34 pre-qualified bidders, only 3 finally bid for this project. The L2 bidder was Punj Lloyd (INR 2163mn) and L3 bidder was Navayuga Infrastructure (INR 2357mn). Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. Madhucon announced financial closure of this project on September 2012. Details of financing were however not available at the time of collection of this information. The estimated capital cost of the project at the time of bidding was US$ 146mn (INR 7300mn @50 INR/USD). Construction on the project was expected to begin in November 2012 and be completed by December 2014. But the MoU expired in September 2013 and Madhucon Projects expressed its unwillingness to continue with the project.The NHAI had proposed bypass roads near Vuyyur, Sultan Nagaram near Machilipatnam, Pamarru and Kankipadu. For some administrative and other reasons, Madhucon had failed to start the construction works for the last two years. One of the important reasons for poor response from Madhucon was said to be the delay in the construction of Machilipatnam port and bifurcation of Andhra Pradesh into two states.The Vijayawada-Guntur region was in the race for the proposed new capital of the residual Andhra Pradesh. Finally NHAI terminated the Concession in December 2013.