Ashoka Dhankuni Kharagpur Tollway Limited

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In February 2011, the National Highway Authority of India (NHAI) awarded a 25 year concession (including construction period of 30 months) to Ashoka Buildcon Limited for the strengthening, improvement, 6-laning, operation and maintenance, and tolling of 111.4 kms of Dhankuni-Kharagpur Section of NH - 6 from Km. 17.600 to Km 129.000, including construction of a bridge over river Roopnarayan, in the State of West Bengal. Under the contract, Ashoka Buildcon was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 6-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, culverts, road intersections, interchanges, drains, etc. The expansion project, part of National Highway Development Project Phase-V would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Ashoka Buildcon Limited established Ashoka Dhankuni Kharagpur Tollway Limited, a special purpose vehicle, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI, by quoting the highest premium payment to NHAI. The SPV would pay NHAI a sum of of US$25.2mn (INR 1260.6mn @50 INR/USD) as premium in the first year of operations with 5% increase in each subsequent year (this amounted to an NPV payout of US$ 359.9mn over a concession period of 22.5 years at a discount rate of 10%). Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The tolls would be escalated annually at the rate of 3% plus 40% of the CPI (Consumer Price Index). The concession agreement was signed on 20th June 2011 (the appointed date for the project was April 2012). The project attained financial closure on 15th June 2012. The debt equity ratio of the project was 79:21. The estimated capital cost of the project at the time of financial closure was US$ 441mn (INR 22051.5mn @ 50 INR/USD). Financing comprised 16year 4month term loan of US$349.2mn (INR 17460mn), and sponsor equity of US$ 91.8mn (INR 4591.5mn). The term loan had repayment schedule of 154 monthly instalments. The The loan was priced at an interest rate of 12.25%. The debt was arranged by Axis Bank Limited. The other participating banks were Central Bank of India (1000mn), Corporation Bank (2000mn), Dena Bank Ltd (1000mn), India Infrastructure Finance Company Limited (3200mn). Construction on the project began in April 2012 (Appointed Date) and was expected to be completed by September 2014. Toll collection on the existing stretch had started in April 2012.