KUALA LUMPUR: PLUS Expressways Bhd’s India-based associate company, Jetpur Somnath Tollways Ltd, and the National Highway Authority of India have entered into a concession agreement for the four-laning of a 127.6km tolled highway in Gujarat, India.

In a filing with Bursa Malaysia, PLUS yesterday said the project involves widening the existing two-lane carriageway to four lanes of the Jetpur to Somnath Section NH-8D, measuring 127.6km or 123.45km in design length.

PLUS said the project would also include the construction of new pavements, rehabilitation of existing pavements and the operation and maintenance of the project, among other things.

It also said the 30-year concession period would begin from the date of execution of the concession agreement and include the construction period of about 30 months.

The project is to be implemented on a design, build, finance, operate and transfer (DBFOT) basis, said PLUS.

“The company has the right to demand, collect fees from the users or vehicles using the highway upon the commercial operation date of the highways,” it said.

PLUS and its joint bidding partner, IDFC Projects Ltd, had on Jan 11 incorporated a special-purpose vehicle (SPV) in India to undertake the project.

It said it holds a 26% stake in the SPV with the remaining 74% held by IDFC Projects and six other nominal subscribers.

IDFC Projects is the project development arm of the Indian government’s Infrastructure Development Funding Corp, which is tasked with leading private capital funding into commercially viable infrastructure projects in India.

PLUS also said its parent, Khazanah Nasional  Bhd, holds a 8.97% stake in IDFC as at Aug 31, 2010.

On Sept 23, 2010, in response to a query from Bursa Malaysia, PLUS had said the project’s estimated total cost was approximately INR950 crores (RM634.1 million) and details of the SPV’s funding were still being finalised.

“The project is part of PLUS Expressways’ strategic growth plan. This project, the first won on a tender basis, is expected to contribute positively to the future earnings of the PLUS Expressways group,” the company said in its latest announcement yesterday.

This article appeared in The Edge Financial Daily, February 8, 2011.