IL&FS Transportation Networks wins another road project

IL&FS Transportation Networks (IL&FS) has bagged a road project from NHAI recently on an ‘annuity' basis.

The company announced the receipt of a letter of award from NHAI to rehabilitate and develop four-lanes in a stretch of highway in Jammu and Kashmir on a design, build, finance and operate (DBFO) basis. It claimed to be the lowest bidder for this project costing about Rs2,519-crore.

This project is a 20-year annuity including the five years given for construction. Under an annuity project, the operator of the road would receive a fixed sum from the Government irrespective of the volume of traffic, thus reducing the volatility in revenues that arise in toll projects. Annuity projects are typically awarded when the traffic would not make it viable for the developer to receive a reasonable return within the concession period.

IL&FS would receive a semi-annuity of Rs635-crore for the above projects.