DBL Betul Sarni Tollways Limited

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In 2013, Madhya Pradesh Road Development Corporation (MPRDC) awarded a 15-year concession (including construction periof of 2 years) to Dilip Buildcon Limited (DBL) for the strengthening, improvement,two-laning, operation and maintenance,and tolling of 124.1kms of existing major district road- Betul-Sarni-Tikadhan-Junnardeo-Parasiya section of State Highway No.43, starting at Km 0.00 from Kamani Gate Betul to Ch 124.10 at Parasiya Bus-stand,in Betul and Chhindwara districts of Madhya Pradesh. Under the contract, DBL was responsible for the design, construction,finance, operation and maintenance,strengthening and widening the existing 2-lane carriageway to 2-lane undivided 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. Dilip Buildcon established DBL Betul Sarni Tollways Limited (DBSTL),a special purpose vehicle on 2nd May 2013, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by requesting the lowest annuity payment of US$ 5.1mn (INR 309.6mn). 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 semi-annual payments of INR 154.8mn from MPRDC as well as tolling, during the term of concession. DBL would execute the fixed price (INR 2850mn) EPC for the project. The project attained financial closure on 2nd April 2014. The project was expected to be financed with a debt/equity ratio of 75/25. The estimated capital cost estimated at the time of financial closure was US$ 52.7mn (INR 3215.9mn @61 INR/USD). Financing comprised a 13-year term loan of US$ 39.5mn (INR 2410mn) and sponsor equity of US$ 13.2mn (INR 805.9mn). The term loan had a grace period of 6-months and a repayment schedule of 24 semi-annual installments. Mandated lead arranger was Bank of Baroda.The other participating banks were Allahabad Bank (750mn), Canara Bank(600mn), Vijaya Bank (350mn), Corporation Bank (600mn). The project started construction in 2013 and DBSTL had completed 40.12% of physical progress till June 26, 2014.