Bhilwara Rajasmand Tollway Private Limited

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In November 2012, the National Highway Authority of India (NHAI) awarded a 30-year concession (including construction period of 910 days or approximately 2.5 years) to Sadbhav Engineering Limited (SEL) for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 87.25kms (from KM0.000 to KM87.250) of Rajasmand to Bhilwara section of National Highway-758 (NH758),in the state of Rajasthan. Under the contract, IRB Infra was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 4-lane highway with paved shoulders. The scope included construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc. The project road was a newly declared national highway under NHDP-IV program. It was a section of NH-758 starting from kakroli (Rajsamand) and ending at Bhilwara bypass on NH79. The project road passed through Rajsamand which was one of the major marble clusters of Rajasthan (around 20% of India’s marble reserve). There were about 500 mines and 250 modern gangsaw mills in the nearby region of project stretch.Furthermore, two mines on the project stretch were principal Indian sources of minerals like zinc, silver and manganese. Also,the project stretch was 12 km shorter than the existing Kishangarh-Udaipur route which was a part of Golden Quadrilateral (GQ). Sadbhav Engineering Limited established Bhilwara Rajasmand Tollway Private Limited (IWTPL), a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest upfront subsidy of US$ 45.5million (INR 2664mn @58.6 INR/USD). Out of the 35 pre-qualified bidders, Sadbhav was the sole particpant in the final bid. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. A fixed price EPC contract was given to Sadbhav Engineering Limited. The concession agreement for the project was signed on 14th December 2012. The project attained financial closure on 14th September 2013. The grant/debt/equity ratio for the project was 28/29/43. The estimated capital cost of the project at the time of financial closure was US$ 160.8mn (INR 9425mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 2664mn, financing comprised of a 18-year term loan of US$ 47.2mn (INR 2764mn) and sponsor equity of US$ 68.2mn (INR 3997mn). The term load had a grace period of 3 years and a repayment schedule of 174 quarterly installments (door-to-door tenure of 18 years).The debt was arranged by ICICI Bank and the participating banks were Oriental Bank of Commerce (INR 500mn),Union Bank of India (500mn),Vijaya Bank(500mn). Construction on the project was expected to begin in October 2013 (the assigned appointment date post signing of concession agreement in December 2012 and financial closure in September 2013) and be completed by April 2016.