Getting On Track: UPEIDA finally awards all packages of Purvanchal Expressway

UPEIDA finally awards all packages of Purvanchal Expressway

The Uttar Pradesh government is steadily moving towards accomplishing its aim of developing the largest expressway network in the country. The state already has to its credit two major expressway projects – the 165 km Yamuna Expressway and the 302 km Agra-Lucknow Expressway. Given the huge size, these projects have been fraught with a number of challenges related to land acquisition, changes in scope and cost escalations. The Purvanchal Expressway too faced a similar set of issues which led to the cancellation of the contracts twice before the project was finally awarded in July 2018. Drawing lessons from the expressways constructed in the past, the Purvanchal Expressway is likely to meet its completion timelines.

Journey so far

The Purvanchal Expressway is a six-lane greenfield project being implemented by the Uttar Pradesh Industrial Expressways Development Authority (UPEIDA). The expressway will be developed along the lines of the Agra-Lucknow expressway project and will be expandable to eight lanes. It will commence from Chand Sarai village on the Lucknow-Sultanpur road stretch of National Highway (NH)-731 and terminate at Haidariya village in Ghazipur district, about 18 km from the Uttar Pradesh-Bihar border. It will also be connected to Varanasi via a separate link road.

Hiccups on the way

When the first tender for the project was floated in November 2015, the proposal was to connect Lucknow to Ballia on the Bihar border. However, realising the extent of clearances required for this, the stretch was limited to Ghazipur. The initial plan of implementing the project in six packages was increased to eight packages. By the end of 2016, the government had selected six firms for undertaking the project in eight packages. These were NCC Limited, Ashoka Buildcon Limited, PNC Infratech Limited, Gayatri Projects Limited, Afcons Infrastructure Limited and Larsen & Toubro (L&T).

However, in 2017, the tenders that had been awarded earlier were cancelled on the grounds that less than 40 per cent of the land had been acquired. In February 2018, the government initiated a fresh tendering process for the project. This time a total of seven companies emerged as successful bidders for the eight packages – NCC Limited for Package I, Apco Infratech Limited for Package II, L&T for Package III and V, Gayatri Projects Limited for Package IV, PNC Infratech Limited for Package VI, Afcons Infrastructure Limited for Package VII and Reliance Infrastructure Limited for Package VIII. However, on June 6, 2018, the Uttar Pradesh government again decided to cancel awards. This decision was taken on account of the fact that the amount quoted by the companies exceeded the estimated construction cost by 11 per cent.

Current status

After the two consecutive cancellations, the contracts for all eight packages of the Purvanchal Expressway were finally awarded in July 2018. With the fresh bidding process, the expressway is estimated to be constructed at a cost of Rs 230 billion on an engineering, procurement and construction basis. It is expected to be completed within three years from the commencement of construction. After the successful completion of the third bidding process, the central government laid the foundation stone for the project on July 14, 2018. Most of the packages for the project have been awarded to players who had undertaken the Agra-Lucknow expressway project. So far, the government has been successful in acquiring 93 per cent of the total 4,300 hectares of land required for the project. Further, clearances from all the concerned authorities have been obtained as well. While the state government has set a target of 36 months for completion of the project, UPEIDA plans to complete it within 24-26 months.

Financing

UPEIDA has been experimenting with innovative funding mechanisms to facilitate smooth implementation of its projects. In July 2018, the Uttar Pradesh government approved the proposal to secure Rs 120 billion loan from the Punjab National Bank for the construction of the Purvanchal Expressway. In the first phase, Rs 78 billion will be provided at an interest rate of 8.3 per cent for 15 years. The loan will be repaid in 48 instalments with a three-year moratorium. Further, under the 2018-19 budget, the Uttar Pradesh government has allocated Rs 10 billion for the construction of the expressway.

Future outlook

After the initial hiccups, the Purvanchal expressway project is finally on track. Once completed, the expressway will help in reducing the travel time between Lucknow to Ghazipur to 4.5-5 hours. At present, it takes 8 hours for the journey. The Purvanchal Expressway is a part of UPEIDA’s plan to expand the expressway network in the state to 1,192 km by 2021-22.

In addition to the Purvanchal Expressway, UPEIDA has ten other expressway projects on the anvil. These are the Gorakhpur Link Expressway, the Bundelkhand Expressway, the Prayag Expressway, the Greater Noida-Ballia Expressway, an access-controlled expressway along the right bank of the upper Ganga canal, the Bijnore-Moradabad-Fategarh Expressway, the Jhansi-Kanpur-Lucknow-Gorakhpur-Kushinagar Expressway, the Lucknow-Barabanki-Nanpara Link Expressway, the Agra-Kanpur Expressway and the Narora-Uttarakhand Expressway. Most of these projects will be developed through public-private partnerships. Of the projects, the most ambitious one is the eight-lane expressway connecting Greater Noida and Ballia, which is proposed to span a length of 952 km. If taken up for execution, it will surpass the Purvanchal Expressway as the longest expressway in the country.

While the alignments of the Gorakhpur Link Expressway, the Bundelkhand Expressway and the Prayag Expressway have already been finalised, the remaining seven projects are still in the proposal stage. The four-lane 293 km Bundelkhand Expressway will commence at Jhansi and terminate at Etawah, where it will join the operational Agra-Lucknow Expressway. It will traverse the districts of Chitrakoot, Banda, Hamirpur, Jalaun and Auriya. Further, the four-lane 150 km Prayag Expressway will stretch from Lucknow to Allahabad while the four-lane, 89 km Gorakhpur Link Expressway will connect Azamgarh with Gorakhpur. In order to give a boost to the state’s expressway development agenda, the government has allocated a sum of Rs 6.5 billion for the Bundelkhand Expressway and Rs 5.5 billion for the Gorakhpur Link Expressway under the state budget for 2018-19.

Given the scale of the Purvanchal Expressway, there is a need to ensure that the project is implemented in a timely and hindrance-free manner. Upon its successful completion, it will set a benchmark for the implementation of the lucrative pipeline of expressway projects in Uttar Pradesh.

Liya Rashid