Soma- Isolux NH One Tollway Private Ltd. (India)

Sponsor: Grupo Isolux Corsán, S.A.
Activity: Concession agreement for toll road enlargement, operation and
maintenance
Industry: Transport infrastructure
Product: Joint venture loan to a specific purpose company
Total investment: 645 million euros.
Resources: FIEX

India’s road network is one of the largest in the world, extending along a total of 3.32 million km. In a country where 80 % of these thoroughfares are secondary and road carriage accounts for 85 % of passenger and 70 % of freight traffic, the need to develop highway infrastructure is readily visible. National motorways are the main arteries that connect economic regions and areas in India. In 1999 the Indian Government began to reform its national motorways under the so-called National Highways Development Project (NHDP) with a view to improving transport infrastructure and accommodating rapid traffic growth. The National Highways Authority of India (NHAI) is responsible for implementing this ambitious development plan, whose objectives include increasing the capacity, safety and efficiency of the present motorway network.

Every year the NHAI sponsors different public-private partnering models to expand and modernize the network. As part of NHDP Phase V, in 2008 the consortium formed by the ISOLUX-CORSÁN Group (61 %) and the Indian firm Soma Enterprise (39 %) was awarded a 15-year franchise to build, operate, conserve and maintain the 291 km. stretch of motorway NH1 between the cities of Panipat and Jalandhar.

One of the primary objectives of the franchise is to enlarge the motorway from the present two lanes to three lanes in each direction. The project also envisages the construction of over 500 km. of service roads, as well as major and minor bridges, underpasses and flyovers. Motorway NH1 runs from Delhi to the Pakistani border, connecting large urban and industrial centres, including Panipat and Jalandhar, that form part of India’s north-south corridor. The enlargement of the motorway will contribute to stimulating the region’s economy, characterized by a strong primary sector, while also enhancing the growth potential of the corridor itself, which is flanked along its entire length by numerous industrial estates and tourist attractions.

The project will, then, have a sizeable positive impact on development, with the creation of over 600 direct jobs. As the manager of the Fund for Foreign Investment (FIEX), COFIDES is financing part of the project under a 25 million-euro joint venture loan granted to the ISOLUX-CORSÁN Group.

The ISOLUX-CORSÁN Group, created in 2004, is Spain’s number one non-listed engineering, construction, manufacturing, franchise and service firm. Since the outset, it has been committed to projects that create local value. It presently operates in 34 countries. It leads the high voltage power transmission franchise market and pioneered the Indian market, where it is the first Spanish infrastructure company to be awarded an operating motorway. It has been pre-qualified to build some fifty other similar facilities in India. Isolux-Corsán also has two motorway franchises in Spain, two in Mexico and one in Brazil.