Madhya Pradesh to float SPV for Dewas-Gwalior highway

The Madhya Pradesh government has decided to float a special purpose vehicle (SPV) for the development of the four-lane 433-km Dewas-Gwalior highway ranked as NH-3.

The Madhya Pradesh Road Development Corporation, will develop this company. The government intends to develop the road as a “development corridor”.

“This company will off-load 74 per cent in a private company, invited through tender process, while the MP Road Development Corporation will have share capital, which it will sell in the company in the form of premium amount for the project. The project cost would range between Rs 1,500 crore and Rs 2,000 crore,” a government spokesperson said, referring a cabinet decision taken on Wednesday. The share capital will be sold to the technical and financial bidders.

The corporation will keep 26 per cent (approximately Rs 200 crore) in the special purpose vehicle and will work as partner with the private company for a ‘concession’ period of 30 years. However, the source further said, the investment limit (of the private company) will depend on the profitability of the project, but will range between 51 per cent and 71 per cent.

The SPV created for the purpose will pay for the land acquisition, as a result of which, the Madhya Pradesh government will have to invest zero amount.

The corporation will function as a Government of India agency. A formal proposal in this regard will soon be sent to the Central Ministry of Surface Transport. The ministry, however, has already given in-principal sanction to the project.

Four-laning of the project will provide Dewas industrial area an easier exit to Agra and Delhi, while Gwalior will have increased cargo-handling capacity towards Mumbai.