The National Highways Authority of India (NHAI) has formed a Special Purpose Vehicle (SVP) — DME Development — for financing, construction and operation of the Delhi-Mumbai ‘Greenfield’ Expressway.
The NHAI’s wholly-owned SPV is aimed at diversifying the developer’s ‘resource base and initiating a sustainable and self-liquidating approach to raise finances’.
Currently, the NHAI is implementing about 28,000 km of highways under ‘Bharatmala Pariyojna’ Phase-I, and the Delhi-Mumbai Expressway is one of the flagship corridors. Spanning 1,275 km, it will be a eight lane expressway, with provision to expand to 12 lanes in the future. Along with a design speed of 120 km per hour, it will be India’s longest Greenfield Expressway.
“The corridor will be completely access-controlled with closed tolling. A network of 75-way side amenities is also planned on either side of the expressways at an interval of 50 km,” NHAI said in a statement.
The project has a capital cost of Rs 82,514 crore, which includes land acquisition cost of Rs 20,928 crore. “Considering the significance of the project, the authority has decided to invest the full equity and proceed with the development,” the statement said.
“SPV shall raise debt on its balance sheet, while NHAI retains the operational control during construction and O&M.”
As per the statement, the toll on the projects housed in SPV shall be collected by the NHAI and SPV shall get the annuity payments without any construction and tolling risks. The completion of the expressway is projected by March 2024.
NHAI said it plans to form similar SPVs for other high value highway projects. This will further enhance the developer’s capabilities to execute large scale infrastructure projects of national importance.