Abhijeet Hazaribagh Toll Road Limited

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On May 2010, the National Highway Authority of India (NHAI) awarded a 24-year concession (including construction period of 24 months) to a consortium of Abhijeet Infrastructure Limited and Corporate Ispat Alloy Limited for the strengthening, improvement, widening, operation and maintenance of 41.3kms of Barhi-Hazaribagh section on National Highway-33 (NH33)in the state of Jharkhand.The project also includes the bypass for Hazaribagh city. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing 2-lane to a 4-lane highway with paved shoulders. The scope includes construction of 4lanes including construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections,interchanges, drains, etc.The expansion project, part of National Highway Development Project Phase - III, will ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Abhijeet Infrastructure Limited (26.5%), Abhijeet Roads Limited (47%), and Corporate Ispat Alloy Limited (26.5%, it is a subsidiary of Abhijeet Group which is into steel manufacturing), established Abhijeet Hazaribagh Toll Road Limited, a special purpose vehicle, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI, by quoting the lowest upfront subsidy from NHAI of US$33.5mn (INR 1508.5mn @45 INR/USD).Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession.The SPV has entered into fixed-price contracts for construction with a group company, Abhijeet Projects Limited (APL). The concession agreement was signed on 31st August 2010. The project attained financial closure on 21 April 2011. The debt/equity/grant ratio of the project was 40/36/24. The estimated capital cost of the project at the time of financial closure was US$ 139.3 (INR 6271.5mn @ 45 INR/USD) million. Aside from INR 1508.5mn grant from NHAI, financing comprised INR 2500mn 14-yearterm loan,and INR 2263mn sponsor equity. The INR 2500mn term loan had a grace period of 6months and repayment schedule of 47 quarterly instalments.The Pricing was at base rate (which varied from 850bp to 950bp), plus margin (which varied from 200bp to 290bp) linked to respective bank rate.The debt was arranged by SBI Capital Markets.The participating banks were Bank of Baroda(250mn), Punjab National Bank(750mn),India Infrastructure Finance Co Ltd(550mn), State Bank of Patiala(250mn). Construction on the project began in January 2011 and was expected to be completed by January 2013.