The process of purchasing land for the Ganga Expressway, which is to be built from Meerut to Prayagraj, is going on in full swing.
The Uttar Pradesh cabinet approved a proposal for Rs 4,480 crore loan from Punjab National Bank (PNB) to purchase land for the 594-kilometre-long Ganga Expressway project. Loan for the Rs 36,000 crore project will be given based on toll revenue securitisation from Agra-Lucknow Expressway.
This is the first attempt by a government institution to get resources on an asset securitisation basis in the infrastructure sector. The process of purchasing land for the Ganga Expressway, which is to be built from Meerut to Prayagraj, is going on in full swing. So far, 88% of the land has been purchased.
Speaking to FE, an official of the state government said the loan amount would be made available in lieu of securitisation. With the additional availability of financial resources, the purchase of land and other work will be accelerated.
“This is the first project in UP in which we are moving towards monetisation. Since toll revenues in the Agra-Lucknow expressway project have not reached the optimum levels because of Covid-19, we have decided to first securitise its toll revenues and pick up a loan against it,” said the official. “PNB has offered us a loan of Rs 4,480 crore at 7% interest rate. From this, we will first clear the Rs 819 crore outstanding loan in Agra-Lucknow expressway, which was taken from Allahabad Bank (now Indian bank) and use the rest for acquiring land for Ganga expressway project,” he said, adding that by securitising the existing revenue sources, the government would be creating additional revenue for the Ganga Expressway project.
While the PNB has already given the state government an offer of 7% interest against the loan, the government will now seek a counter from other banks. “If other banks give us a better proposal, we will go by that, or we will take the loan from PNB,” the official stated, adding that another 2-3% more land will be bought through mutual agreement and the rest to be acquired by notification.
It may be mentioned that 90% of the land is necessary for bidders to start work on a public-private partnership (PPP) project and the rest would be acquired during the project. The request for proposal (RFP) for the project is in the drafting stage and the final bids are expected to be invited in August.
The project, which is to be built on a build-operate-transfer (BoT) basis, will have a 30 years concession period. “The civil work of the project is expected to begin in October,” the official added.
The districts that will be connected by this project include Meerut, Hapur, Bulandshahar, Amroha, Sambhal, Badaun, Shahjahanpur, Hardoi, Unnao, Rai Bareli, Pratapgarh, and Prayagraj. Once the expressway is operational, the travel time between Delhi and Prayagraj is expected to be cut short from the current 10-11 hours to just 6-7 hours.