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Saturday, October 14, 2000

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Logistics | Next


Special purpose vehicle for Ahmedabad-Vadodara scheme

Our Bureau

NEW DELHI, Oct. 13

THE National Highways Authority of India (NHAI) has set up Ahmedabad-Vadodara Expressway Co Ltd, a special purpose vehicle (SPV) under the Companies Act, 1956, for implementing the 96 km-long expressway project in Gujarat at an estimated cost of Rs 450 c rore.

The SPV had been registered with funds from the NHAI and during the course of executing the project, it would raise funds from the market by leveraging its equity, official sources told Business Line.

The NHAI also plans to rope in some of the leading financial institutions as equity partners in the SPV before the project reaches financial closure. ICICI has been appointed as financial advisors and lead fund arrangers for the project.

`` Some of the major financial institutions in the country has showed interest in participating in the equity of the SPV apart from providing debt to meet the project cost '', the sources said.

But before doing so, the NHAI wants to give confidence to the prospective investors that it means business this time considering the controversy that has dogged the project which was started way back in 1986 originally as a World Bank-assisted project.

The project ran into trouble due to contractual problems and had to be abandoned mid-way. The total physical progress of the work up to September 1998 was 61.21 per cent and the balance work was entrusted to the NHAI.

The expressway project spanning a length of 96 km will be implemented in two packages of 43 km each. The construction contract for the first package from Nadiad to Dakor State highway costing about Rs 150 crore has been awarded to the Indonesian firm, PT Sumber Mitra Jaya.

The NHAI has short-listed the construction contractors for implementing the second package of the project from Nadiad to Vadodara at an estimated cost of about Rs 300 crore. The pre-qualified bidders will soon be invited to quote their price bids after w hich the contractor will be selected.

The officials also said that the construction contractors would be free to pick up equity in the Ahmedabad-Vadodara Expressway Co Ltd.

PT Sumber Mitra Jaya has expressed its willingness to take equity in the SPV. ``We are ready to pick up whatever share of equity the NHAI decides to offer the construction contractors in the SPV'', Mr A.P. Began, CEO, PT Sumber Mitra Jaya, told Business Line.

The construction work on the first package has started from September this year and is expected to be completed within 24 months.

The Ahmedabad-Vadodara project is the first big expressway project to be undertaken by the NHAI.

Related links:
Indonesian co bags NHAI contract

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