Kalyani Group Bags Hubli Road Project

The Pune-based Kalyani groups special purpose company, the Nandi Infrastructure group, has been awarded the contract for the Hubli-Dharwad road stretch on national highway number 4 on a build-operate-and-transfer basis.

Official sources said that a concession pact has been signed for a period of 10 years from the time of completion of construction of the road stretch linking the twin cities of Hubli and Dharwad on NH4. The construction is expected to be completed in a period of two years.

The project is expected to cost about Rs 80 crore. The Kalyani group has also pitched for the Bangalore-Mysore 150 km expressway project in the state highway sector.

The Hubli-Dharwad road stretch, as per the last traffic count conducted by the ministry of surface transport, has a density of about 40,000 passenger car units (PCUs), with about 80 per cent of comprising commercial vehicles, both light and heavy.

Such projects are in a position to generate the targeted internal rate of return within a short time schedule because of the kind of traffic density that the road stretch boasts. The Hubli-Dharwad traffic density is expected to increase at the rate of about 10 per cent each year, with the bulk of the growth taking place in the commercial vehicles sector.

In view of the traffic density on the stretch, the Kalyani Group SPV has not sought any traffic guarantees from the ministry.

The project is expected to be funded on the same lines as the Larsen & Toubro projects, on a 60:40 debt equity ratio. Available indications are that toll tariff would be levied at the rate of Rs 25 per PCU, on the same lines as the Coimbatore bypass with an escalation factor (annual tariff increases) based on the whole sale price index (WPI).

Besides the Hubli-Dharwad project, two other projects have also been awarded by the National Highways Authority to special purpose companies on the same concession period basis of 10 years. These include the Udaipur bypass project, which has been bagged by the Atlanta construction group, and the Chaltan Rail overbridge to Avishkar Engineering.