Infrastructure Leasing & Financial Services (IL&FS) is expected to finalise the concession agreement on the Delhi-Noida bridge by December. It has set March 98 as the target to achieve financial closure.
IL&FS is looking at a pay period of 30 years in the $80 million Delhi-Noida bridge and plans to keep the toll at a level where users will pay less than what they will save by utilising the facility.
IL&FS chief executive (infrastructure) Hari Shankaran said: It will be the first pure BOT (build operate and transfer) project. The Rau Pitampura road is strictly not a BOT project.
Two other projects that are in an advanced stage are: the 32 km Vadodara-Halol road and the Ahmedabad-Mesana road project.
Besides saving time, wear and tear of the vehicle, the Delhi-Noida bridge will cut the distance down by seven kilometres. This means on an average a car can save at least 0.75 litres of petrol, which works out to nearly Rs 17..
The road projects in Gujarat have reached the bid out stage. Several entities, including multinationals, have shown an interest in the project. The financing will be done on a non recourse basis.
The selling point will be the substantial reduction in travelling time.
According to Hari Shankaran, a sustained campaign is needed to educate the users about the benefit of toll roads.
In the concession agreement being prepared for the Delhi-Noida project, risks taken by IL&FS and those handled by the governments of Delhi and Uttar Pradesh will be specified.
The concession also talks about the transfer of the project back to the government. While financing road project, issues of asset cover and ownership for the purpose of depreciation have to be resolved by financial institutions.
However, IL&FS officials feel the road is owned by the private party that collects the toll, though the land on which it stands is not. Hence depreciation can be claimed by the company. The asset cover part is irrelevant as financial institutions should look at the project as cash flow financing and not asset financing, they say.
