In a significant development for the national highway development programme (NHDP) of the government, Reliance Energy Limited (REL) promoted special purpose vehicles (SPVs) on Monday signed two concession agreements with National Highway Authority of India (NHAI), thus marking its entry into the field of highway development.
Under the project, REL would four-lane two national highway sections on NH-7 in Tamil Nadu on build-operate-transfer (BOT) basis. Both the projects fall on the north-south corridor under national highways development project (NHDP) phase II.
The agreements were signed by NHAI with NK Toll Road Ltd and DS Toll Road Ltd (SPVs formed by REL).Under the first agreement, the four-laning of the 33.5 km long, high-traffic density corridor of Namakkal-Karur Section of NH-7 (258.645 km to 292.6 km) on BOT basis, is expected to be completed in 30 months at a cost of Rs 205.6 crores.
The concession period is 20 years, inclusive of the time taken for construction.
The agreement also has a grant component of Rs 24 crores to the concessionaire NK Toll Road Ltd from NHAI.
The second agreement has been signed with DS Toll Road Limited for four-laning of 53.025 km long corridor of Dindigul-Samyanallur section (373.275 km to 426.6km) of NH-7 on BOT basis.
The project is expected to be completed in 30 months at a cost of Rs 283.5 crores. The concession period is 20 years, inclusive of the time taken for the construction.
As per the agreement, NHAI would provide the concessionaire DS Toll Road Limited, a grant of Rs 31 crores.
In BOT-toll projects, the private sector meets the upfront cost and expenditure on annual maintenance and recovers the entire cost along with the interest from toll collections during the concession period.