The National Highways Authority of India’s (NHAI) fully-owned special purpose vehicle (SPV), DME Developers (DMEL), has received AAA rating from CRISIL, CARE and India Ratings. The SPV is executing the Delhi-Mumbai expressway project. Through this SPV, NHAI has planned to diversify its resource base and develop a project specific sustainable and self-liquidating approach to raise finances.

Delhi- Mumbai expressway is a flagship greenfield project under ‘Bharatmala Pariyojna’. The project is being executed under 48 sub-projects, out of which 17 are hybrid annuity model projects (Vadodara-Mumbai segment) and 31 are under EPC model (Delhi- Vadodara segment). Of these 48 sub-projects, 27 are under construction, 17 are awarded and work to be started and the rest are under process for awarding. The project is scheduled for completion by March 2023, with one of the stretches to JNPT getting completed by September 2023.

The total estimated cost of the greenfield project is about Rs 87,500 crore including land acquisition cost of about Rs 20,600 crore. Expenditure other than land acquisition during construction period will be about Rs 53,849 crore, to be funded through Rs 48,464 crore debt and equity of about Rs 5,385 crore from NHAI, with debt-equity ratio marked at 9:1. 

For the project, DMEL’s role will be limited to housing the debt and servicing thereof. For the debt, NHAI is extending a letter of comfort to lenders. The concession agreement, implementation agreement and letter of comfort have been finalised. Annuity payments to DMEL will be structured to enable timely servicing of debt and other incidentals. NHAI plans to form similar SPVs for other high value highway/expressway projects. This will further enhance NHAI capability to execute large-scale infrastructure projects of national importance.