Unlike the past when private players could hardly manage to get funds for developing road sector projects, all the eight annuity sections entailing a cost of Rs 1,760 crore in the first phase of the National Highways Development Project (NHDP) have achieved financial closure.
The private participation in the Rs 58,000-crore NHDP comprises a dozen stretches to be developed under the build-operate-transfer (BOT) model and eight stretches as annuity projects, totalling at about Rs 3,470 crore. While three of the 12 BOT sections (entailing a cost of Rs 825 crore) have also managed to tie-up funds, four more are expected to achieve financial closure shortly.
According to senior government officials, a host of first-time financiers in public sector banks and financial institutions have decided to lend funds for development of various stretches. These include Federal Bank, UCO Bank, J&K Bank, United Bank of India and Canara Bank.
The lenders have been particularly interested in the annuity stretches because the traffic risk here is borne by the government.
The first annuity project to have tied-up funds was the IL&FS-executed upgradation and multilaning of the 77 km Belgaum-Maharashtra section on NH-4. A syndicate of 13 public sector banks including PNB, J&K Bank and Central Bank of India have raised Rs 406 crore for funding the stretch.
An IDFC-led consortium (three financial institutions and seven public sector banks) have arranged the debt component for the Rs 525-crore Panagarh Palsit section. The 64 km annuity section, being upgraded by Gamuda-WCT of Malaysia achieved financial closure within six months of the promoters bagging the mandate.
Three consortia led by ICICI are funding the debt part for three annuity sections--the 47 km Tuni Dharmavaram section (Rs 206 crore), the 53 km Dharmavaram-Rajahmudhry section (Rs 233 crore) and the 59 km Anakapalli-Tuni section (Rs 305 crore) on NH-5 in Andhra Pradesh.
The remaining annuity sections in the first phase of the NHDP (Golden Quadrilateral project), including the 65 km Palsit Dankuni and the 17.2 km Nellore Bypass have also achieved financial closure.
The BOT projects too have not lagged behind despite the traffic risk factor being borne entirely by the operator. Of the 12 BOT projects, the Rs 68 crore Durg Bypass project and the rail overbridge at Kishangarh Bypass have already been completed. The Rs 740-crore four-laning of the Tada-Nellore section, being executed by CIDC of Malaysia and the first large BOT section has also achieved financial closure. Four other BOT sections are also close to tying-up funds, officials said.
