TNRDC begins land acquisition; detailed project report soon.
Chennai, Jan. 8
Tamil Nadu Road Development Company Ltd (TNRDC) has decided to go it alone for the Rs 500-crore second phase of the IT Corridor which is to be implemented on an annuity basis, according to reliable sources.
TNRDC has decided to opt for the annuity model based on the experience of the first phase of the project, which has completed one year of operation as a toll road.
Protracted delays led to a tripling of costs in the first phase, which hit the viability of the project
. For the second phase, TNRDC hopes to cushion itself with assured returns, possible in the annuity model.
TNRDC, a public-private partnership between the State Government agency, Tamil Nadu Industrial Development Corporation (Tidco), and IL&FS, an infrastructure company, also went through a restructure with the private partner exiting the joint venture. IL&FS' equity of Rs 5 crore was taken over by another TN Government enterprise, Tidel Park Ltd, for Rs 15 crore last November.
The project cost of the first phase, initially estimated at about Rs 130 crore, has escalated to over Rs 400 crore, and the project is yet to be fully completed.
TNRDC will soon call for tenders to complete the balance work including service roads, footpaths, divider kerbs and crash barriers. Work on service ducts for carrying cables and other utilities has been completed on the east side of the road. The dual three-lane carriageway, which was completed in 2008, is in operation as a toll road. This 20-km stretch links Adyar in the city to Siruseri, a suburb.
According to the source, the impact of the cost escalation in the first phase means TNRDC will be unable to recover the project cost from the toll collections. The monthly revenue of Rs 2 crore from over 26,000 vehicles that use this stretch daily is barely enough to the cover the interest costs and operation and maintenance of the road. Return on investment is unlikely.
Work on the second phase of the IT corridor, a 26-km stretch linking Siruseri to Mamallapuram, is to start soon. Land acquisition is on and a detailed project report is to be prepared outlining the project cost, the details of the annuity model and project support from the Government. Initial estimates peg the cost of civil construction at Rs 500 crore. An earlier feasibility study had estimated the cost about Rs 280 crore.
The IT Corridor, known as the Rajiv Gandhi Salai, will link Chennai to Mamallapuram, about 45 km to the south, and will connect fast-growing residential and commercial zones of the city. The name is derived from the presence of leading domestic and international IT companies which have established large campuses along the stretch.