GMR bags big­gest high­way deal thus far in In­dia

Will pay NHAI 636 crore to ex­e­cute the 5,700 cr, 555 km Kis­hangarh-udaipur-ahmedabad mega high­way

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - Ashutosh Ku­mar & G Seetharaman NEW DELHI/MUM­BAI

GMR In­fra­struc­ture has won a 5,700 crore na­tional high­way pro­ject run­ning from Kis­hangarh in Ra­jasthan through Udaipur to Ahmedabad, ac­cord­ing to an of­fi­cial of the Na­tional High­ways Au­thor­ity of In­dia (NHAI).

This is the sin­gle-big­gest high­way pro­ject so far in the coun­try, both in terms of value and length.

The stretch is 555 km-long. This is also the first of the nine planned mega high­ways. Mega high­ways are those with a length of over 500 km or cost­ing 5,000 crore or more.

The of­fi­cial, re­quest­ing anonymity, said GMR of­fered a neg­a­tive grant of 636 crore to win the toll-based pro­ject.

“The neg­a­tive grant com­mit­ted by the de­vel­oper is more than dou­ble of the gov­ern­ment es­ti­mate. That clearly shows the ap­petite among the pri­vate sec­tor for high­way projects,” he added. The fi­nance min­istry had ear­lier es­ti­mated that the win­ning bid­der may have to shell out a pre­mium of 300 crore to bag the pro­ject. The con­ces­sion pe­riod in the pro­ject is of 26 years.

Neg­a­tive grant is the money a bid­der of­fers to NHAI to win a con­tract be­cause it finds po­ten­tial rev­enues that en­cour­ag­ing. In case of projects which are other­wise not vi­able, the NHAI of­fers up to 40% of the to­tal pro­ject cost as vi­a­bil­ity gap fund­ing.

The sec­ond most-pre­ferred bid­der for the Kis­hangarhAhmed­abad pro­ject was a con­sor­tium led by GVK Power & In­fra­struc­ture, which of­fered a pre­mium of 516 crore. The gap be­tween the prices quoted by the L1 (or the most pre­ferred) and L2 bid­ders has been widen­ing in re­cent months ow­ing to in­creas­ing competition. Some peg the num­ber of play­ers bid­ding for such projects at 35-40.

The largest pro­ject NHAI awarded be­fore this one was the 3,600 crore Ahmed­abadVado­dara sec­tion of Na­tional High­way-8.

GMR of­fi­cials con­firmed the com­pany has emerged L1 bid­der for the pro­ject but wouldn’t com­ment till it re­ceived the letter of award (LoA) from NHAI.

GMR has six op­er­a­tional high­ways and three un­der de­vel­op­ment. The com­pany’s scrip closed 1.83% higher at 30.65 on the BSE.

Nhai on Fri­day also awarded the 225 km-long Ja­balpurKatni-Rewa pro­ject to Soma Toll­way. IL&FS Trans­porta­tion Net­works was the L2 bid­der for the 1,900 crore high­way in Mad­hya Pradesh.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.