The much-hyped Delhi-Mumbai Expressway project will now be implemented through a Special Purpose Vehicle (SPV). On August 13, the National Highways Authority of India (NHAI) said it has formed an SPV to carry out financing, construction, and operations of the `82,514-crore project. The SPV, named DME Development, will be a wholly-owned entity of the NHAI.
The Delhi-Mumbai Expressway is an eight-lane highway covering 1,275 km. The project has been envisaged to be converted into a 12-lane expressway in the future. It has been designed to keep an average traffic speed of 120 km per hour. According to the NHAI, this will be the longest Greenfield expressway in the country. The Delhi-Mumbai Expressway is the flagship project of the Bharatmala Pariyojana which aims at building 28,000-km in the first phase of this project.
The NHAI is eyeing to diversify the resource base for the project and develop an asset that earns sufficiently to pay for its cost over a fixed timeline. The highway is planned to be fully access-controlled with toll plazas along the 1200-km long corridor. The development also envisages clusters of modern amenities along the highway at an interval of 50-km. There would be 75 such amenity clusters.
The capital investment for the project is aimed at `82,514 crore out of which `20,928 crore has been earmarked for land acquisition. The NHAI plans to bring in the full equity in view of the high significance attached to the project. It will retain the operational control of operations and maintenance. The SPV will raise the funds and earn an annuity but it will not be subject to risks associated with maintenance and tolling - which will be carried out by NHAI. The project is scheduled to be completed by March 2024. The highway authority plans to set up more SPVs to finance other highway projects in order to enhance its capabilities and resources to execute large scale projects of high significance.
Meanwhile, the Mumbai-headquartered highway infrastructure development major IRB Infra has been awarded the contract of building the 27.5-km stretch of the Gandeva-Ena section of the Vadodra-Mumbai Expressway which is a part of the Delhi-Mumbai Expressway. The project is worth `1,775 crore while the total cost of the 380-km greenfield Vadodra-Mumbai Expressway with a 2022 deadline is pegged at `44,000 crore. The eight-lane Vadodara-Mumbai Expressway is part of the NHAI's Bharatmala Pariyojana (Package-VII). Earlier in March 2018, IRB Infrastructure Developers had won a contract worth `2,043 crore for the Padra-Vadodara section of the same Vadodara-Mumbai Expressway.
Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure, said, "We are happy to receive the LoA from NHAI; the second one for the stretch on the prestigious Vadodara-Mumbai Expressway project under Bharatmala Pariyojana."
IRB Infrastructure Developers is one of the largest private highway infrastructure developers in the country, having `45,000 crore of asset base. After the Gandeva-Ena contract from NHAI, the company’s order book swells to `13,755 crore.
On July 29, the NHAI selected IRB Infra as the preferred bidder for the Gandeva-Ena section project. The project would be implemented under the hybrid annuity model (HAM) where the company will have a concession period of 15 years that would include a 730 days of construction period.
The Bharatmala Pariyojana is the most ambitious highway development project that aims to create 50 new national corridors, bringing in huge private investment opportunities. In the phase-1 (2017-22), the project looks to develop 24,800 km of highways. The phase-1 will also include 10,000 km of balanced highway projects from the NHDP. The total spending at these highway development projects is estimated to be around `5,35,000 crore.