After years of delay, the Thiruvananthapuram City Road Improvement Project (TCRIP) is 99 per cent complete and is expected to achieve commercial operation date (COD) shortly. Notably, it is one of the first public-private partnership (PPP) projects for urban infrastructure development in the country. The project is being implemented in Kerala, a state which is not particularly known for undertaking PPP projects. Further, the TCRIP involved the most arduous job of acquiring about 5,200 parcels of land that required an exceptional level of coordination between various agencies. In addition, the project was showcased in the PPP forum of the United Nations Economic Commission for Europe for demonstrating good governance and sustainable development.
The 42 km road improvement project is being supervised by the Kerala Road Fund Board (KRFB). The primary role of the board was to facilitate land delivery through the acquisition agency – Thiruvananthapuram Development Company Limited (TDCL) – and coordinate with all agencies for smooth and timely delivery of land.
The project is being implemented in three phases through a special purpose vehicle – Thiruvananthapuram Road Development Company Limited (TRDCL) – comprising IL&FS Transportation Networks Limited (ITNL) and Punj Lloyd Limited. The former is responsible for managing construction as well as maintenance post commissioning while the latter is the engineering, procurement and construction (EPC) contractor. The detailed project report for the TCRIP was prepared by CES India Limited, while Egis India Consulting Engineers Private Limited was the independent engineer.
The concession was awarded on a build-operate-transfer (BOT) annuity basis. The first phase was awarded way back in 2004 and was commissioned in November 2006 while the second phase was awarded in June 2009 and commissioned in February 2012. The third phase is yet to be commissioned.
Planned infrastructure to ease traffic
The TCRIP involves the widening and strengthening of 144 lane km. The final scope of work includes the following:
- Development of minimum two-lane standards
- Improvement of 63 junctions
- Construction of flyovers at Bakery junction and Melepazhavangadi and an underpass at Palayam junction
- Development of one rail overbridge, two two-lane bridges and three three-lane bridges
- Construction of 73 new culverts
- Improvement of links to national highway bypass
- Development of 2-metre wide continuous footpath covering 67 km
- Construction of 82 cross-ducts and cross-pipes for utility lines
- Construction of roller-compacted concrete retaining walls covering 10.61 km
- Provision of high-mast lights at 12 junctions
- Provision of road signs, markings and solar-powered traffic signals
- Provision of stormwater drains and new street lights
- Development of 94 bus bays abutting the roadway
- Creation of adequate pedestrian facilities such as footpaths and lighting
- Planting of 1,234 trees (the concessionaire has actually planted over 2,200 trees)
- Provision of consistent and quality maintenance for 15 years. (TRDCL has already appointed ELSAMEX India Private Limited for project maintenance and upkeep.)
Financials
As of May 2016, the total project cost stood at Rs 3.6 billion. ITNL has put in an equity amount of Rs 684.1 million. The debt portion stands at Rs 1.22 billion, about 34 per cent of the total project cost. The debt has been provided by a consortium of five banks – Punjab National Bank, Indian Overseas Bank, Bank of India, Jammu & Kashmir Bank Limited and Oriental Bank of Commerce. Provided for a period of 12 years, the loan has an initial moratorium period of three years. The interest rate during the construction stage is of 9.75 per cent and 8.75 per cent once the project is operational. The agreement signed between the concessioning authority and the concessionaire was as per the draft memorandum approved by the Planning Commission, which was based on FIDIC (International Federation of Consulting Engineers, known by its French acronym) norms. This gave the necessary comfort level to the consortium of public sector banks for funding the project. Reportedly, the project witnessed a cost escalation of Rs 1,530 million on account of delays.
As per ITNL, the annuity received for Phases I, II and III for 2014-15 stood at Rs 291.1 million. Meanwhile, the gross revenue and loss for 2014-15 were recorded at Rs 387.77 million and Rs 194.91 million respectively. Further, ITNL reported Rs 38 million as the annuity receivable per annum for the first phase of the TCRIP and Rs 25 million as the annuity accrued for the January-March quarter of 2015-16.
Hits and misses
The deadline for handing over all the land for the project was December 31, 2004. “Land acquisition was the most demanding task in the development of the project,” says Anil Kumar Pandala, project director, TCRIP. Several landowners went to the Kerala High Court and secured a stay. However, the stay could not be sustained as TDCL acquired land parcels as per the rule book (a procedure involving about 17 steps). This took a lot of time and resulted in delays in project implementation. Land acquisition was finally completed in 2009.
The delay in work under Phases II and III of the TCRIP, especially between 2006 and 2009, put a lot of pressure on the funding agencies. The consortium of lenders had to restructure the loan a number of times to keep the lending process active. During the period, the developer continued to engage with the public, including resident associations, professional associations, schools, colleges and various other groups, to apprise them about the benefits of the project. Finally, the project was revived in 2009 and a supplementary agreement for Phases II and III was signed between KRFB and ITNL on May 1, 2009 .
The way forward
TRDCL applied for COD for the third and last phase of the project in May 2016. As of July 2016, about 99 per cent of the construction work has been completed. The few remaining works include re-laying of two service roads and the development of the Vanchiyoor junction.
The project has received positive feedback from various agencies and the public at large. “The people residing in the city have experienced a significant change from the older infrastructure and have started raising requests for similar quality infrastructure in other areas too,” says Pandala. In a positive move, the Kerala government has already started work in other cities across the state using a similar model of state and private participation.
