DBL Nadiad Modasa Tollways Limited

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On 12th December 2011, the Government of Gujarat awarded a concession of 14 years (including 730 days construction period) to Dilip Buildcon Limited for the strengthening, improvement, 4-laning,operation and maintenance of existing 108kms of two-lane Nadiad-Madhudha-Kathlal-Kapadwanj-Bayad-Modasa section of road comprising SH-7,in the state of Gujarat. Under the contract, Dilip Buildcon was responsible for the design, construction, finance, operation and maintenance,strengthening the existing 2-lane carriageway of Nadiad-Modasa section of SH7 to 4-lane standard 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, traffic signages, traffic safety measures, etc. This road upgradation was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Dilip Buildcon Limited, the winning bidder, established DBL Nadiad Modasa Tollways Limited (DNMTL), a special purpose vehicle, to implement the project. The SPV won the tender through domestic competitive bidding, conducted by PWD Gujarat, by requesting the lowest fixed annuity of US$ 7mn (INR 349.2mn @ 50INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 174.6mn from Gujarat PWD during the term of concession. Dilip Buildcon Limited would execute the EPC for this project on a fixed price contract. The concession agreement for the project was signed on 5th January 2012. The project attained financial closure in May 2012. The debt equity ratio of the project was 72:28. The estimated capital cost of the project at the time of financial closure was US$ 41.4mn (INR 2072.2 mn @ 50 INR/USD). Financing comprised term loan of US$ 30mn (INR 1500mn) and sponsor equity of US$ 11.4mn (INR 572.2mn). The construction of project started in July 2012 (Appointed Date-handover of 50% of the land) and was expected to be operational by July 2014. DNMTL had achieved Commercial Operations Date in December 2013 against Schedule Project Completion Date (SPCD) of July 3, 2014.