According to PWD minister Nitin Gadkari, the only issue that needs to be resolved is the amount of Rs 4.39 crore that needs to be paid to IL&FS for development cost already incurred on the project. This includes the compensation of $250,000 to be paid to construction firm John Holland, the contractors for the project.

The government is eager to buy out the project as soon as possible as any delay could hamper the success of the Rs 1,500 crore Mumbai-Pune expressway, which is already three months ahead of schedule. MSRDC expects to commission the project in the year 2000. It has been watching with concern the lack of progress that IL&FS was making on the project. A few weeks ago the Maharashtra government decided to make the offer.

Thestate goverment has also received a clearance from the ministry of surface transport to integrate the bypass with the expressway. This had become necessary as the Panvel bypass is on the national highway network. The clearance however is subject to the Maharashtra government paying compensation to the IL&FS for development costs incurred.

As soon as the formalities with IL&FS are completed, the MSRDC hopes to open tenders for the project. New estimates are pegged at 10 per cent lower than IL&FS's project cost. The bypass will also be a six lane project as compared to the four lane earlier planned.

The Financial Express had recently reported that the Maharashtra goverment and IL&FS were negotiating for takeover of the Worli-Bandra Link, the only other road project that IL&FS has in the state. However, IL&FS is yet to present the development costs incurred on this project. MSRDC's new estimate for the project is in the region of Rs 350 crore. This will be integrated with the 55 flyover projects inMumbai. Environmental clearance is expected within a few days.

The Panvel bypass project was to be executed by a joint venture comprising the IL&FS, ministry of surface transport and the government of Maharashtra. The 10 km project was in 1993 estimated to cost Rs 150 crore and was to be completed within 27 months. With a daily traffic volume of 60,000 pcus (passenger car units), it was considered one of the most viable private sector road projects. Later links to Nhava Sheva and Panvel city were added and by 1996 costs for the 24 km project had risen to Rs 329.9 crore.

The principle cause of the delay was that IL&FS had chosen the continous concrete pavement technology, which had no maintenance cost for 15 years compared to the bitumenous technology used on most other projects. The government to date has not cleared the use of this technology.

Mega plans on cards

The Maharashtra government, through the MSRDC, will soon be announcing road projects including flyovers and road widening in fourmajor cities. The first off the block will be Pune at an estimated cost of Rs 500 crore, followed by Nasik at Rs 400 crore, Nagpur at Rs 450 crore and Kolhapur Rs 80 crore.

The state PWD ministry has also tied up funding for Rs 600 crore worth of projects which have not been handed over to the MSRDC. These projects, which are at various stages of completion, were held up for lack of funds. They will now be financed by a consortium of lenders.