Barasat Krishnagar Expressways Limited

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In February 2011, the National Highway Authority of India (NHAI) awarded a 17-year concession (including construction period of 30 months) to Madhucon Projects Limited for the strengthening, improvement,4-laning, operation and maintenance of 84kms (KM 31.00 to KM 115.00) of Barasat to Krishnagar section of National Highway-34 (NH-34) in the state of West Bengal. Under the contract, Madhucon was responsible for the design, construction, finance, operation and maintenance and strengthening and widening of the existing passageway to a 4-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.The expansion project, part of National Highway Development Project Phase-III was expected to give significant stimulus to trade and commerce in the entire region. Madhucon Group (through its subsidiaries Madhucon Infra Limited and Madhucon Projects Limited), established Barasat Krishnagar Expressways Limited (BKEL), 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$ 31.5 million (INR 1479.6 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 739.8mn from NHAI during the term of concession.The SPV had awarded a fixed-price, fixed-time EPC contract to Madhucon Projects Limited. The concession agreement was signed in June 2011. The project attained financial closure on 27th September 2011 at a debt/equity ratio of 72/28.The estimated capital cost of the project at the time of financial closure was US$ 208.5 (INR 9800mn @ 47 INR/USD) million. Financing comprised INR 7056mn 14year 6months term loan,and INR 2744mn sponsor equity. The term loan had a grace period of 6months and a repayment schedule of 23 semi-annual instalments (the loan would mature on March 31 2026). The loan was priced at 150bp above prime lending rate of Oriental Bank of Commerce (about 12.25%) and had an annual reset.The term loan was arranged by SBI Capital.The participating banks were IIFCL (1520mn),Andhra Bank (1250mn),Dena Bank (580mn),State Bank of Hyderabad (450mn),State Bank of Bikaner & Jaipur(450mn),State Bank of Patiala(450mn),Tamilnad Mercantile Bank (450mn). The appointed date (start of construction) for the project had been announced as 7th August 2012 and the scheduled date of completion of the project is 3rd February 2015.