The expressway project between Bangalore and Mysore is expected to cost around Rs 2,000 crore and will be financed through a mix of public issue, promoters' equity and funds from financial institutions, including ICICI and Hudco.
Ashok Kheni, managing director of the main project promoter, Nandi Infrastructure Corridor Enterprises, said the promoters would pump in Rs 600 crore over 10 years and the rest would be financed through public issues, tax-free bonds, venture funds, and funding by multilateral agencies, FIs and strategic partners.
The expressway will be 121 km long and a 40 km semicircular outer peripheral road will be built around Bangalore to take traffic right into the heart of the city. Each intersections on the outer peripheral will have truck terminals so that trucks need not go into the city. Instead light commercial vehicles can transport the goods into the city.
The expressway will be built in three phases. A million tonnes of stones will be required every year for building it.
The promoters are also planning to build five townships and a few heritage centres along the four-lane expressway. The townships will be built on a self-finance basis. "The idea is to create counter-magnet townships so that pressure is off the main cities," Kheni said. The expressway will also have a median wide enough to put up a rail for a light train. The train project is not part of the expressway at present.
Land acquisition is expected to begin in September. Karnataka Industrial Area Development Board has earmarked 20,000 acres for acquisition, which will be the single largest acquisition so far by the board.
Asia-Pacific Capital has been appointed financial adviser for the project while technical advisers for both the expressway and five townships running through the corridor include Michael Baker and Mellon Stuart, which were advisers for Disney World, the Alaska oil pipeline and Global Telesystems.
For the toll structure, advisers include Pennsylvania Turnpike and New Jersey Turnpike while Richard Ellis will be consulted for the market study.
The promoters are negotiating the toll structure for the expressway with the Karnataka government's public works department. Toll rates are expected to be based on 40 per cent savings in vehicle operating cost and will be structured to encourage greater use.