Bangalore-based infrastructure firm GMR Group has emerged as the selected bidder through international competitive bidding, for six laning of 555 kms long Kishangarh–Udaipur–Ahmedabad highway, the first brownfield mega highway project of the country.

This is the single-biggest highway project awarded so far in India, both in terms of value and length and covers 40% of the length between Mumbai and Delhi on the golden quadrilateral.

National Highway Authority of India, or NHAI, pegged the overall project cost at Rs6,013.70 crore, out of which Rs626.40 will be for the land acquisition and preconstruction purposes.

In a media statement on Tuesday, GMR said this project will be implemented through the public private partnership (PPP) model on design, build, finance, operate and transfer (DBFOT) model.

“This highway section is a part of the Delhi-Mumbai (Golden Quadrilateral) corridor and goes through the newly announced Delhi-Mumbai Industrial Corridor (DMIC) which has a very high growth potential for commercial and tourist traffic. The letter of award has been received by the company and the concession agreement will be signed soon. This is the group’s first highway project in western India,” the statement said.

The statement did not disclose the details of funding the project.

On 8 September, domestic brokerage Emkay Global Financial Services Ltd said addition of Ahmedabad-Kishangarh will catapult GMR to the big league and the engineering, procurement and construction (EPC) vertical of the group is likely to benefit from this mega project. The note said the group would be unable to internally fund the long term capital expenditure requirements though GMR is adequately funded to meet short-term requirements for the next two years. “We believe with humungous pipeline of projects, which are under development, GMR will continue to seek additional funding which is expected to be raised by monetization of investments in the energy and infrastructure vertical,” it said.

A 9 September note by international brokerage Proactive Universal Group too said GMR Infrastructure’s operating cash flow has been on a rising trend, though it is still insufficient to fund the company’s highly capital intensive infrastructure projects.

Srinivas Bommidala, business chairman at GMR Urban Infrastructure & Highways, said, “The strategy for the highways business of the group has been to bid with detailed preparation. This successful bid is the culmination of a thorough study of the traffic and its growth potential, carried out by the company utilizing the cross-verification of estimates by our internal team and an external team over two years. I am glad that our hard work has paid off. This particular project is attractive due to the fact that we shall earn revenue from day one, being a brownfield project.”

GMR Group entered the highways business in 2001 by winning two projects with benchmark annuity offer. It received early completion bonus from NHAI for completing Tambaram–Tindivanam project ahead of schedule.

At present, the group has a balanced portfolio of four annuity projects and six toll projects (six projects have already commenced operation) totaling 3,352 kms across the length and breadth of the country.

On 15 September, the Cabinet Committee on Infrastructure approved the implementation of the project and said the project when completed will reduce the time and cost of travel for traffic playing between Kishangarh and Ahmedabad which will connect to Vadodara and Mumbai in the west and Delhi in the east. “It will also increase the employment potential to the local labourers for the project activities and development of tourism activities and would boost economic activities in the state of Gujarat and Rajasthan,” the ministry of road transport and highways said in a statement.