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State to earn Rs 1300 crore premium

THE MADHYA Pradesh Government is likely to earn a whopping and unprecedented premium of nearly Rs 1300 crore over a period of 22 years through the 126-km Jaora-Nayagaon BOT road project, bids for which were opened in Bhopal on Thursday afternoon. The Madhya Pradesh stretch of the road is Jaora-Neemuch via Ratlam.

india Updated: Jan 26, 2007 10:41 IST

THE MADHYA Pradesh Government is likely to earn a whopping and unprecedented premium of nearly Rs 1300 crore over a period of 22 years through the 126-km Jaora-Nayagaon BOT road project, bids for which were opened in Bhopal on Thursday afternoon. The Madhya Pradesh stretch of the road is Jaora-Neemuch via Ratlam.

“This is the first time in the country that a BOT road project has received such high bids”, MP Road Development Corporation (MPRDC) Managing Director Mohammad Suleman told the Hindustan Times.

The project’s initial cost is Rs 425 crore and – in the past – the State Government always had to grant subsidy to the builders in road projects.

This time round, however, the State Government would not be providing any grant to the builders. On the contrary it would be receiving a premium of nearly Rs 36 crore per year for the next 22 years. In addition, the State Government would earn 5 per cent interest per annum too, Suleman said.

The project has been bagged by a joint venture of the Infrastructure Development and Finance Corporation (IDFC) and Ashoka Buildcom, Suleman informed. The latter has already done the Indore road project too, he added.

The four-lane road’s Net Present Value (NPV) is about Rs 450 crore. It would go from Jaora to Neemuch up to the Rajasthan border, Suleman stated. There were seven bidders for the project and the project was offered to the highest bidder.
Lauding State PWD Minister Kailash Vijaywargiya for providing a free hand to the officials in the project, Suleman said, “We are grateful to our PWD Minister Mr Kailash Vijaywargiya for allowing us to operate in a truly professional manner”.

“All officials involved in the project were able to work without any pressure whatsoever enabling the best outcome possible”, Suleman emphasised. Echoing the same feelings, most of the bidders present during the bids-opening meeting in Bhopal also commended the State Government.

The entrepreneurs stated it was the first time that a BOT bid in any state was conducted without any political pressure whatsoever.

The investors pointed out that Madhya Pradesh was poised for a massive growth in the road sector, Suleman said. The entrepreneurs have invested so much money in this sector keeping in mind the growth of traffic in the state in future and the tremendous potential in Madhya Pradesh as far as the road sector was concerned, Suleman maintained.

- The bids for Jaora-Nayagaon BOT road project were opened in Bhopal on Thursday
- First time in the country that a BOT road project has received such high bids
- The State Government would be receiving a premium of nearly Rs 36 crore per year for the next 22 years.