Bareilly Highways Project Limited

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In April 2010, the National Highway Authority of India (NHAI) awarded a 20 year concession (including construction period of 30 months) to a consortium of Era Infra Engineering Limited (India) and OJSC-SIBMOST (Russia) for the strengthening,improvement, four-laning, operation and maintenance, and tolling of 151.2kms of Bareilly-Sitapur section of National Highway-24 (NH-24) from Km262 to Km413.2,in the state of Uttar Pradesh. Under the contract, the consortium was responsible for the design, construction,finance, operation and maintenance and widening of the existing two-lane highway to a four-lane highway with paved shoulders. The scope will 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 - III, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Era Infra Engineering Limited (74%) and OJSC-SIBMOST (26%), established Bareilly Highways Project Limited, a special purpose vehicle, to implement the project. The consortium won the tender through competitive bidding,conducted by NHAI, by requesting the lowest fixed subsidy of US$ 56.7 million (INR 2550 million @ 45 INR/USD).Under the contract, Bareilly Highways Project Limited was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement was signed in May 2010. The project attained financial closure in December 2010. The debt equity ratio of the project was 72:28. The estimated capital cost of the project at the time of financial closure was US$ 433.5 (INR 19510 mn @ 45 INR/USD) million. Financing comprised INR 14000mn 15year term loan and INR 5510mn equity. The INR 14000mn term loan consisted of INR13500 term loan A and INR 500mn term loan B.The debt was arranged by SBI Capital Markets Ltd. Construction on the project began in December 2010 and was expected to be completed by June 2013.