Concast Badnagar Road Projects Private Limited

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In July 2011, Madhya Pradesh Road Development Corporation (MPRDC) awarded a 15-year concession to a consortium of Concast Infratech Limited and Roman Tarmat Limited for the strengthening, improvement,two-laning,operation and maintenance,and tolling of 95.1kms of two existing major district roads - (51.31km) Badnagar-Sundarabad-Kharsod Kalan-Unhel section and (43.79km) Sundarabad-Runija-Khachrod and Runija-Satrunda section,in the state of Madhya Pradesh. Under the contract, Concast Infratech was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing 2-lane carriageway to 2-lane divided carriageway.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 expansion project, part of the MDR (major district roads) development project, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Concast Infratech Limited (74%) and Roman Tarmat Limited (26%), established Concast Badnagar Road Projects Private Limited (CBRPPL),a special purpose vehicle on 18th December 2012, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by requesting the lowest annuity payment. Other details of bidding were not known at the time of collection of this information. Under the contract, the SPV was to recover the capital costs and operating costs including returns through periodic payments from MPRDC, during the term of concession. Concast Infratech would execute the EPC for the project. The concession agreement for the project was singed on 24th December 2012. The project attained financial closure on 10th May 2014. The debt/equity ratio of the project was 75/25. The estimated capital cost of the project at the time of financial closure was US$ 25.9mn (INR 1387.1mn @53.4 INR/USD). Financing comprised of 14-year term loan of US$ 19.5mn (INR 1040.3mn) and sponsor equity of US$ 6.5mn (INR 346.8mn). The term loan had a repayment schedule of 22 semi-annual installments and was priced at 125 basis points over the Base Rate. The loan was arranged by Bank of Baroda (520.3mn) and Corporation Bank(520mn). The project construction started in January 2013 and was expected to be operational by June 2014.