MUMBAI, July 25: Reliance Industries, Larsen & Toubro, Mukand & Pell Frischmann, Renong Berhad and Lok Housing & Construction and Infrastructure Leasing & Finance Services (IL&FS) top the list of companies which have bid for 12 road projects worth Rs 3,104 crore in Gujarat.

Other firms in the list, among others include Punj Lloyd, Hindustan Construction Company, Shapurji & Co and Hydere Consultant and Amar Construction and the Canadian Highway Investment Corporation.

The major projects include the 162 km Surat-Vapi expressway costing Rs 750 crore, the 90 km Vadodra-Surat expressway (Rs 1,350 crore), the 36 km four laning of Halol highway (Rs 225 crore), Ahmedabad-Mehsana expressway and four laning of Ahmedabad-Mehsana and Kadi-Chhatral state highway (76 km) at Rs 450 crore and the 127 km four laning Bhuj-Nakhatrana-Dayapar-Panandhro state highway costing Rs 150 crore.

State special secretary and chief engineer (roads and building department) SS Rathore informed The Financial Express that the Rs 140 crore Vadodra-Halol (32 km) and Rs 315 crore Ahmedabad-Mehsana (52 km) road projects would be implemented by IL&FS. "A special purpose vehicle company (SPV), Gujarat Toll Road Co Ltd has been set up for implementation of these projects," he added.

Rathore said He said the SPV would be responsible for executing, implementing, operating and maintaining and transferring the project at the end of the concession period to the roads & buildings department. Under the proposed project structure, the state government would enter into a concession agreement with the SPV. The concession agreement would be based on a fixed return-variable payback period revenue model.

Rathore said the SPV would enter into a fixed price fixed time construction contract and an operation and maintenance contract with the selected BOOT consortium.

Rathore said that to ensure commercial viability of these projects, a host of incentives has been declared by the government.

These concessions include acquisition of land at government cost, provision of additional land for commercial development, granting advertisement and air space, subsidising loss of revenue due to traffic being less than projected and utilisation of government quarries in the vicinity of the project.

Moreover, Rathore said, the government would seek a loan from the World Bank to improve arterial routes in the state. According to him, the project envisages improvement of 800 km to 1,000 km of arterial state highways costing Rs 1,050 crore.

He said that as per the World Bank guidelines, the project coordinating consultant has already launched techno-economic feasibility and environmental studies for 250 km of roads in phase 1. Similar studies for 550 km to 650 km of roads would be conducted in the second phase.

Rathore said the Bank's appraisal mission is expected to visit the state around the end of the year. The board is likely to give its clearance by March 1998 which would be followed by the signing of the agreement.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.