UP govt to raise Rs 9,000 crore bank loan for two highway projects

The Uttar Pradesh government will raise more than Rs 9,000 crore in commercial bank loans to fund two highways that will cost more than Rs 20,000 crore to connect backward regions of the state.

The 296-km Bundelkhand Expressway and the 91-km Gorakhpur Link Expressway are estimated to cost Rs 14,849 crore and Rs 5,876 crore. The government plans to raise Rs 7,000 crore and Rs 2,275 crore in bank loans respectively, totalling Rs 9,275 crore.

Land acquisition for the two highways is estimated at Rs 3,766 crore.

The state had tied up with Punjab National Bank (PNB) and Corporation Bank for loans worth Rs 8,800 crore for bank rolling another under-construction, 340 km Purvanchal Expressway. UP Expressway Industrial Development Authority (UPEIDA) CEO Awanish Awasthi had earlier told Business Standard additional loans worth Rs 1,500 crore were in also pipeline.

Meanwhile, the government had so far released Rs 1,590 crore for land procurement for Bundelkhand Expressway, while the remaining portion of Rs 612 crore would be raised through bank loans.

The state cabinet on August 20 approved the amended bidding documents for both these projects. Against their estimated cost of Rs 14,849 crore and Rs 5,876 crore, Bundelkhand and Gorakhpur Link expressways were earlier projected to cost Rs 14,716 crore and Rs 5,555 crore respectively, thus logging combined cost overruns of Rs 454 crore due to delays.

The government had acquired 90% of 3,641 hectares for Bundelkhand Expressway, which is likely to boost economic activity in the arid region and arrest the migration of youth. It would traverse Jhansi, Banda, Hamirpur, Mahoba, Jalaun, Auraiya and Etawah districts, and touch Agra-Lucknow Expressway at Etawah.

However, the process of land acquisition for Gorakhpur Link Expressway has been sluggish with only 17% of the targetted 1,073 hectares acquired so far. It would traverse Azamgarh and Ambedkar Nagar districts, and link Gorakhpur with Purvanchal Expressway. 
 

The 353 km Purvanchal Expressway, estimated to cost Rs 23,000 crore, entails acquisition of 4,332 hectares of land. It would connect Eastern UP with Central UP and National Capital Region (NCR) via other expressways viz. 302 km Agra-Lucknow Expressway and 165 km Agra-Greater Noida Yamuna Expressway. It would run through Lucknow, Barabanki, Faizabad, Ambedkarnagar, Amethi, Sultanpur, Azamgarh, Mau and Ghazipur.