Aryavrat Tollways Private Limited

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On 5th November 2012, Madhya Pradesh Road Development Corporation (MPRDC) signed a 25-year concession (including construction period of 730 days) with a consortium of Aryavrat Project Developers Private Limited and Valecha Engineering Limited for the strengthening, improvement, two-laning, operation and maintenance, and tolling of 76.15kms of Guna-Ashoknagar-Ishagarh section of SH-54, in the state of Madhya Pradesh. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing carriageway to 2-lane road with granular shoulders. The scope would include construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc.The expansion project, part of the MPRDC Highway Development Program, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region.The project road is used for transportation of items like herbs, teak, sal etc. from nearby forests, and agricultural products amongst others. The consortium of Aryavrat Project Developers Private Limited (49%) and Valecha Engineering Limited (49%) (promoter of Valecha had an individual stake of 2%), established Aryavrat Tollways Private Limited in October 2012, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC, by requesting for the lowest financial grant (viablity gap funding) of US$ 6.27mn (INR 367.5mn @58.6 INR/USD). Out of the total grant, INR 210.2mn portion of the subsidy availed under the VGF scheme of Goverment of India, was to be paid upfront during construction period. The balance 157.3mn was to be disbursed over a period of 5 years starting from commercial operation of the highway. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The project attained financial closure on 19th November 2013. The grant/debt/equity ratio of the project was 28/50/22. The estimated capital cost of the project at the time of financial closure was US$ 22.3mn (INR 1307mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 367.5mn (Central Government - INR 210.2mn, and Govt of Madhya Pradesh - INR 157.3mn), financing comprised of a 14-year term loan of US$ 11.2mn (INR 657.5mn) and sponsor equity of US$ 4.8mn (INR 282.0mn). The SPV had also availed a Bank Guarantee of US$ 0.897mn (INR 52.6mn). The debt was arranged by State Bank of India and the other participant was India Infrastructure Finance Company Limited (IIFCL). The Appointed Date of the project was 30th August 2013. Substantial portion of the total land requirement had been handed over to the concessionaire and all permits had been obtained by the SPV. Construction had already started and the commercial operation was expected to start by November 2014.