Abhijeet Bihar Roadways Limited

Cancelled

In February 2011, the National Highway Authority of India (NHAI) awarded a 15-year concession (including construction period of 910 days) to Abhijeet Group for the strengthening, improvement,2-laning, operation and maintenance of 92 kms (KM 0.00 to KM 94.70) of Gopalganj to Chappra section of National Highway-85 (NH-85) in the state of Bihar.The entire project stretch falls in state of Bihar starting from its junction with NH-18 near Chhapra and ending at junction with NH-28 at Gopalganj. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and strengthening and widening of the existing passageway to a 2-lane highway with paved shoulders. The scope would include construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, tunnels, viaducts, culverts, road intersections, interchanges, drains, etc.NH-28 formed part of the East-West Corridor connecting Lucknow, the capital of Uttar Pradesh and Mokama in Bihar, passing through the city of Gorakhpur. The expansion project, part of National Highway Development Project Phase -II was expected to give significant stimulus to trade and commerce in the entire region. Abhijeet Group (through its subsidiaries Abhijeet Infrastructure Limited and Abhijeet Roads Limited), established Abhijeet Bihar Roadways Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest fixed annuity of US$ 15.1 million (INR 711.4 million @ 47 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 355.7mn from NHAI during the term of concession.The SPV had awarded a fixed-price, fixed-time EPC contract to Abhijeet Projects Ltd (a Abhijeet Group Company). The concession agreement was signed on 6th June 2011. The project attained financial closure on 16th December 2011.The estimated capital cost of the project at the time of financial closure was US$ 77.2 (INR 3627.9 mn @ 47 INR/USD) million. Financing comprised INR 3000mn Rupee term loan,and INR 627.9mn sponsor equity. The term loan was arranged by ICICI Bank.The debt equity ratio of the project was estimated at 82:18. Construction on the project began in July 2011 and was expected to be completed by December 2013. In April 2014, NHAI cancelled the concession for the project. While most road developers were finding delay in land acquisition and government permits as impending issues, details of the reason for cancellation of ABRL could not be ascertained at the time of collection of this information.