DBL Mundi Sanawad Tollways Limited

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On 5th December 2011, Madhya Pradesh Road Development Corporation (MPRDC) signed a 15-year concession with Dilip Buildcon Limited (DBL) for the strengthening, improvement,two-laning, operation and maintenance,and tolling of 63.73kms of existing major district road- Mundi- Sanawad road section,in the state 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 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. DBL established DBL Mundi Sanawad Tollways Limited (DMSTL),a special purpose vehicle on 28th November 2011, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by requesting the lowest annuity payment of US$ 3.5mn (INR 165.6mn @46.7 INR/USD). 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 82.8mn from MPRDC as well as tolling, during the term of concession. DBL would execute the EPC for the project. The concession agreement for the project was signed on 5th December 2011.The project was expected to be financed with a debt/equity ratio of 73/27. The estimated capital cost of the project at the time of financial closure was US$ 30.1mn (INR 1405.3mn @46.7INR/USD). Financing comprised of a term loan of US$ 22mn (INR 1030mn) and sponsor equity of US$ 8.0mn (INR 375.3mn). Other details of financing were not known at the time of collection of this information. Early completion entitled DMSTL to receive bonus annuity for early completion of about US$ 2.4mn (INR 139.7mn @58.6 INR/USD) - approximate annuity for 10 months early completion. The project construction started in April 2012 (Appointed Date) and was slated for completion by 19th March 2014, but achieved early completion on 15th May 2013.