PPP concessions and EPC contracts

The Asian Development Bank and the Indian Government has signed a US$190 million loan to upgrade 754 km of state highways and major district roads (MDRs) to two-lane or intermediate-lane standards that will benefit about 26 million people in 14 districts of Rajasthan.

About 1,000-km of state roads were upgraded under the US$220 million Tranche 1 loan which was signed in July 2017.

The Tranche 2 roads pass through mostly rural areas of Rajasthan that lack reliable connectivity and will help improve access to health, education facilities and markets leading to increased job opportunities.

The the project will encourage participation of private sector through Hybrid Annuity Mode and engineering procurement construction (EPC) contracts, said Kenichi Yokoyama, Country Director of ADB’s India Resident Mission.

The ADB value-addition will consist in financing part of the construction costs for the annuity-based public private partnership (PPP) concessions and EPC contracts and ensure good governance during project implementation, particularly on procurement and safeguards.

The annuity-based PPP model attracts private sector financing to address capital investment requirements, where a proportion of initial capital expenditure is paid during construction while the balance is serviced by annuity payments during the operation and maintenance phase.

The toll collection rights will remain with the state public works department to bring sustainability in operation and maintenance of the project.

For the benefit of commuters and pedestrians, particularly women and children, the project provides for constructing more than 200 bus stops, 70 km of hard shoulder, and 2 km of raised sidewalk on project roads. fiinews.com