Building the Delhi-Noida Direct Flyway — a bridge to many firsts

This is not just the story of a bridge. This is the story of how path-breaking financial innovation gave India its first Public-Private Partnership for infrastructure. It is a story of gritty project management that brought new frameworks, state-of-the-art design, and all-round confidence into the creation of an ambitious public facility from scratch. It is a story 25 years old, which deserves retelling as the story of a road project that has stood the test of time and set benchmarks for the field today.

The expanding city needs connectivity

Last year, Delhi-NCR nudged out Mumbai as India’s economic capital with a GDP of $370 billion, finding its place among the 30 top metropolitan economic entities globally. One of the world’s largest urban agglomerations, India’s National Capital Region (NCR) contributes nearly one sixth of the national GDP. 

A new route across the river was essential, but the budgetary funds were simply not available

Established in 1976 as part of the NCR, Delhi’s satellite township Noida has grown to become one of the richest civic bodies in the country and boasts the highest per capita income in the NCR. By the mid-eighties, it was already evident that Noida’s burgeoning population needed a more direct link to Delhi across the Yamuna river. The two existing bridges would not suffice: the travel took over an hour, and traffic congestion was severe, creating massive air pollution. A new route across the river was essential, but the budgetary funds for such a massive project were simply not available.

New framework for a new bridge

In 1992, the Governments of Delhi and Uttar Pradesh with the Government of India established a Steering Committee to consider options for a greenfield bridge linking Noida to Delhi. To develop and finance the bridge, the authorities approached IL&FS, who conceived the Delhi-Noida Toll Bridge as a Public Private Partnership (PPP) project.  

This would be the very first large scale infrastructure project to be developed on a PPP basis in the country. It was a time when the legal, policy, financing, commercial, and regulatory frameworks were untested for PPPs. Across all levels of government there were strong apprehensions about people’s willingness to pay for such a facility. In this milieu, IL&FS took on the responsibility to develop the project through the framework of the Steering Committee, which represented government as well as the organisation.

This would be India's first greenfield 8-lane toll bridge built without recourse to government guarantees

IL&FS had been incorporated a few years before as a joint venture between Housing & Development Finance Corporation and two premier government bodies — UTI and CBI — to develop and implement infrastructure projects on a commercial basis.


The first large scale PPP infrastructure project in India, the bridge gave Noida's booming population direct access to Delhi

With the Delhi-Noida Toll Bridge, IL&FS succeeded in designing, executing and operating India’s first 8-lane toll bridge project without recourse to government guarantees. The country’s first greenfield Build-Own-Operate-Transfer (BOOT) infrastructure project was made possible by extensive and continuous consultations with all stakeholders throughout the project cycle.

The Steering Committee

The Secretary of the Indian government’s Ministry of Urban Development (MoUD) chaired the Steering Committee, while the state governments of Delhi, UP and NOIDA, along with IL&FS, were actively represented.

The Committee's consultative processes streamlined clearances and permits that would otherwise have been difficult or even impossible to obtain

The Steering Committee was the forum through which project development was conducted: from design and documentation, to financial planning, and procuring consultants through an international competitive process. It was through the Committee that the Noida Toll Bridge Company Ltd (NTBCL) was incorporated as the Special Purpose Vehicle (SPV) for the project.

The Steering Committee was pivotal to the success of the project: it ensured that the concerns of all departments were addressed in a transparent, integrated and holistic way, and with its consultative process, streamlined clearances and permits that would otherwise have been difficult or even impossible to obtain.


The project was completed four months ahead of schedule; the bridge has not needed a major overhaul in 15 years depite 140,000 cars using it daily

A marvel of financial engineering is required

It is India of the early nineties when this project is being developed: there is little confidence among investors and contractors to take on the risks of equity investment in such a project. There is also widespread cynicism about charging consumers for services through devices like tolls. Furthermore, there is no legal, contractual or regulatory framework in place for such projects.

IL&FS realized that any strategy to secure non-recourse project funding was going to be complicated, to say the least.


The project established commuters' willingness to pay for improved services through tolls

Inviting equity investments …

At this point, IL&FS convinced AIG, the world’s largest insurance company, to set up the AIG Sectoral Equity Fund. The AIG Fund approved a substantial investment in the equity of the Noida Toll Bridge Company Ltd (NTBCL). Following this, Prudential, another large US private equity fund, made an equivalent commitment to the equity of NTBCL.

The Indian financial system contributed less than 5% of the equity of the project. The absence of long term equity capital for infrastructure continues to haunt the sector, as even today project sponsors struggle to raise equity for their projects. IL&FS agreed to play the role of the project sponsor and solicited a modest investment from the New Okhla Industrial Development Authority (NOIDA).

… And linking to the capital markets

The key to anchoring the financing plan was linking the project to the domestic and international capital markets. It was already clear in the early nineties that the capital market would be the only sustainable source of capital, yet this would be the first time it would be approached to fund a public infrastructure project.

The key was the capital markets ... for the first time in the country, financing of an infrastructure project involved a combination of debt and private equity investment

IL&FS structured the first public issue of debt for an infrastructure project, with ‘Deep Discount Bonds’. This was a listed product secured through take-out financing, unique in that it offered long tenor funds from the open market. Having accessed the domestic capital market, the bonds were subsequently issued on the Alternate Investment Market of the London Stock Exchange.

Thus, for the first time in the country, the financing of an infrastructure project involved a combination of debt and private equity investment. By doing this, IL&FS ensured that the project’s ownership structure was broad-based, that the SPV was subject to the strictest of governance and fiduciary standards, and that the management was focused on creating maximum value for investors.


All contracts were awarded through an international competitive bidding process compliant with World Bank and ADB guidelines

From the government’s point of view, the success of this project would enable investors to receive returns; thus future projects would be built on the track record of this one, unleashing a positive development cycle.

The lead-up to financial closure was inevitably an evolutionary process, often departing from the routine of project implementation through government departments. But IL&FS expertise in financial engineering backed by the technical capabilities of the World Bank, IFC, and Asian Development Bank (ADB) enabled the development of contractual documentation that was bankable and in sync with international best practices. The involvement of the multilaterals played an invaluable role in building the necessary capacities within the government and banks.


The project unleashed investments of over Rs 100,000 crore in the region and saved millions of gallons of fuel

The Special Purpose Vehicle: Ensuring efficiency, transparency and quality

This was the first PPP project to be domiciled in a Special Purpose Vehicle in the infrastructure sector. The SPV would serve as the platform for developing and managing the project, raising the funding, seeking all permits and clearances, and becoming the vehicle to realize all the positive impacts of the investment in the region. NTBCL thus developed into a full-fledged organization with skills ranging from project management, engineering, financial, relief and rehabilitation, and local environment management. 

PPPs should follow processes that bolster the confidence of government counterparties, the community they serve, and lenders and equity investors

Legal experts were appointed to draft the Concession Agreement; NOIDA appointed SBI Caps to assist them in negotiations and document vetting. An independent auditor and an independent engineer were appointed as required by the Concession Agreement to oversee and ensure that the company was operating as per the terms of the agreement. All contracts were awarded on the basis of an international competitive bidding procedure compliant with World Bank and ADB guidelines.

Throughout the construction phase, focused review meetings were held on a weekly basis — attended by the contractor, client, consultants, subcontractors and representatives of the Operations & Maintenance firm — to ensure purposeful decision making, smooth project co-ordination and management, and strict quality control. The project became an opportunity for IL&FS to demonstrate its belief that PPPs should follow processes that bolster the confidence of government counterparties, the community they serve, and lenders and equity investors.


By using sand dredged from the Yamuna river for the embankment, the project cut out huge amounts of pollution at the construction stage

The result of this rigorous process was the completion of the project four months ahead of schedule, to the budgeted costs and to the pre-specified standards. 140,000 cars have used the bridge each day for the last 15 years — it is a testament to the stringent procedures followed that the riding quality of the bridge remains very high today without a major overhaul.

Creating community participation

Participatory development is key to successful implementation of infrastructure projects: recognizing this IL&FS put in place an independent Citizens Committee for the project. Never before had a project in its implementation invited the participation of communities and eminent citizens to review construction process and provide feedback. The committee met with the CEO of NTBCL on a monthly basis, creating a participatory process that was able to bypass several potential hurdles in implementation, and ensure compliance with the environmental mitigation plan.

Environmentally sound, technologically ahead

Setting the precedent for our subsequent projects, we undertook a rigorous environmental assessment at the very start of this project. This helped us identify a technically feasible, environmentally compatible, and socially acceptable solution.

This was the first road project built solely using dredged river sand for the embankment. Apart from containing water overflow and soil erosion, using sand from the Yamuna river bed helped increase green cover along the banks. It dramatically reduced the air- and noise pollution that would have resulted from the normal practice of transporting earth-fill to the site, which would have brought about 800 trucks to the site every day.

Quick clearances and unhindered construction, in themselves an achievement in India, bear witness to the success of such an integrated, environmentally-conscious approach.

The bridge was designed to cater to traffic needs over a 30-year period as against the norm of 15

Designed for a life of 70 years, the bridge chalked up a series of firsts in its engineering achievements too. At the time of construction, the bridge used the widest and heaviest single cell precast box segments in India, and perhaps the world — over 16 metres wide and weighing 1200 tonnes. Uniquely, the heavy duty finger-type expansion joints used at the abutments catered for movement of upto 250 mm. It was the first bridge to use external prestressing, and the first to be built on pile foundations. The bridge was designed to cater to traffic needs over a 30-year period as against the norm of 15.


The project showed unprecedented quality standards for design, construction, O&M as well as in project planning and execution


The project unleashed investments of over Rs 100,000 crore in the region, boosting the development of Noida, Greater Noida and the surrounding hinterland. It has saved millions of gallons of fuel by reducing distance and commuting time.

Not only did it show India the quality standards possible in terms of design, construction technology and O&M, but by reaching completion four months ahead of schedule, became a beacon for good project planning and execution.

Through the project IL&FS produced documentation and frameworks that could support the financing of more such projects

Beyond the bridge itself, the Delhi-Noida Toll Bridge Project benchmarked a successful model for designing PPP projects to maximize regional impacts with minimal recourse to budgetary resources. It established the willingness of commuters to pay for improved services. It produced comprehensive and detailed contractual documentation as well as legal, regulatory, and fiscal frameworks to support the financing of more such projects.

The project has demonstrated that government, communities, financing agencies, and project sponsors can be galvanised into a purposeful consortium to deliver ambitious yet commercially robust infrastructure projects. As the product of diligent work done by innumerable agencies, the Delhi-Noida Toll Bridge is a powerful testimony to the power of the PPP construct unleashed through mutual trust and unified vision.