Chetak Tollways Limited

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On 29th March 2012, the Government of Rajasthan (Public Works Department on behalf of Ministry of Road Transport and Highways (MoRTH), Government of India) awarded a 19-year concession (including construction period of 24 months) to Chetak Enterprises Limited for the strengthening, improvement, two-laning, operation and maintenance, and tolling of 117kms Chittorgarh Neemach (MP Border) Section of NH-79 (38kms) and Nimbahera-Pratapgarh section on NH-113 (80kms), in the state of Rajasthan. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a two-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 Government of India, Ministry of Road Transport and Highways (MORTH) through Public Works Department (PWD), Government of Rajasthan had decided to take up the development of various National Highway Corridors for augmentation of capacity for safe and efficient movement of traffic by widening to 2-lane with paved shoulder. Under this program, this project covering Chittorgarh, Neemach, Nimbahera and Pratapgarhand districts of Rajasthan was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Chetak Enterprises Limited (CEL) established Chetak Tollways Limited, a special purpose vehicle, to implement the project. The consortium won the tender through competitive bidding, conducted by PWD Rajasthan, by quoting the highest annual premium. The SPV would pay PWD Rajasthan a sum of US$54.4mn (INR 226.1mn @50 INR/USD) in the 1st year which would increase by 1% per annum in each subsequent year (this amounts to an NPV payout of about US$5.3mn over the concession life at a discount rate of 10%). There were 36 pre-qualified bidders for the project out of which 9 offered their final bids. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. CEL would execute the EPC for this project. The concession agreement was signed on 5th September 2012. The project attained financial closure on 27th February 2013. The debt/equity ratio for the project was 73/27. The estimated capital cost of the project at the time of financial closure was US$ 98.5mn (INR 5770.6mn @58.6 INR/USD).Financing comprised of a 15-year term loan of US$ 72.4mn (INR 4240mn) and sponsor equity of US$ 26.1mn (INR 1530.8mn). The term loan had a grace period of 3-months and repayment schedule of 132 monthly installments. The debt was arranged by IDBI Bank and the participating banks were Dena Bank (950mn), IDBI Bank (940mn), IIFCL (600mn), State Bank of Bikaner & Jaipur (1000mn), State Bank of Patiala (750mn). Construction on the project was expected to begin in February 2013 and be completed by June 2015.