Management Case Analysis

The Coimbatore Bypass Road Project

 OUR PRESENTORS

Roshni Ashok Thakre

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Mayur Devendra Mondhe Meenakshi Yogesh Sidam
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Arpita Sunil Dhawne

Achal Rambhauji Jane
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Introduction

 Project completed 7 months prior.

 User refused to pay the toll for old Athupalam bridge.

 In 1995, the government of India liberalized its policies & opened

up the road sector for private investment.

 The debt financing was done by various banks.

 L&T was unable to collect the tolls from road users & this resulted
in a loss.
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SWOT
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Strength:
• Management – L&T.
• First road project to be implemented in south India on BOT basis.
• Financing by SBI, L&T finance HUDCE, HDFC.

Weakness:
• Poor support & delayed decision from state government.
• No clarify between the government & the developer.
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SWOT
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Opportunities:
• Less operating cost on fuel.
• Connects other parts of state & generate revenue.
• Wayside facilities & amenities on road.

Threats:
• No public consultation.
• Charges of toll player.
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Dilemma

 Project structuring.  Higher rates were charged for new

Athupalm bridge.
 Refuse to pay toll for old Athupalam
bridge.  Lack of government support.

 Public consultation & not any initiative  Fixed period to build, operate &
were taken towards preparing users for transfer that facility & obtain revenue.
high class facilities.
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Alternative Solution

• No toll on old bridge. • Government support.

• Less toll charges at bypass. • Dividing the project into more

number of companies.
• L&T should have taken all the time
for construction & fulfill the • Promises, that could be fulfilled.
promises.
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Theoretical Framework

 Construction of a 28km long two-lane bypass.

 Construction completed in 22 months.

 Users complained that L&T had not taken them

into confidence before coming out with the toll
rates.

 Due to paucity of funds, the project had to be

dropped.
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Theoretical Framework

 Government of India liberalized its policies & opened up the road sector for
private investment.

 L&T gave special emphasis to safety aspect of the road.

 The Indian Railways asked L&T to build a rail overbridged instead of a crossing
for the bypass.
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Roadmap

• Government should have given some support.

• Proper management of funds.

• Public consultation.

• Revenue are generated from toll collection.

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Conclusion

o The Coimbatore Bypass project also has a project structuring. In

that we cannot resort to ‘inappropriate’ bundling to make the
projects financially viable.