JP Group's Yamuna expressway may begin in July: Sources

JP Group's Yamuna expressway is close to begin commercial operations on the July 1, reports CNBC-TV18's Priyanka Dalmia quoting sources.

Jaypee Infratech is the SPV that was incorporated in 2007 in order to implement, develop and operate Yamuna Expressway project. Sources say that the long awaited commissioning of the Yamuna Expressway project may start around July 1.

However company officials have told us that the timeline for the commissioning of this project has not yet been finalized though the project is, of course, ready for commissioning. The officials added that the toll plaza too have been ready for commissioning and the company is just awaiting Uttar Pradesh government’s notification with regard to the toll rates and the speed limit for this expressway project.

This has been a long awaited development for the company and for the stock and it’s a key trigger primarily because toll revenues will start flowing in. Also, the company has about 6,175 acres of land that has been allowed to develop as part of concession agreement around this expressway. Post commissioning of the expressway this would boost the value of the land parcel.

This is also sentimentally positive trigger for the company as it is indicative of the political relationship between JP Associates and the Samajwadi Party that is now the ruling party in UP. This project was earlier issued by the Mayawati government and posts the change in the government investors have been watching out what the impact might be on Jaiprakash Associates’ operations in the state.

To give a brief background of the project, the project outlay has been about Rs 13,300 crore for the Yamuna Expressway and the company is entitled to collect toll revenues for about 36 years for this project and also has a right to develop about 6,000 acres of land around the expressway.

The management had guided for about Rs 400 crore of toll revenues from post commissioning of the project. Most analyst are expecting this to be much lower, under Rs 100 crore in the initial years since traffic build-up would take sometime, of course the project does connect Greater Noida and Agra.

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