DBL Sardarpur Badnawar Tollways Limited

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On 29th June 2011, 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 42.97kms of existing major district road- Sardarpur-Badnawar section of State Highway-35, 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 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 Sardarpur Badnawar Tollways Limited (DSBTL),a special purpose vehicle on 22nd June 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$ 2.1mn (INR 94.2mn @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 47.1mn from MPRDC as well as tolling, during the term of concession. DBL would execute the fixed price EPC for the project. The concession agreement for the project was signed on 29th June 2011. The project was expected to be financed with a debt/equity ratio of 72/28. The estimated capital cost of the project at the time of financial closure was US$ 20.7mn (INR 967.8mn @46.7 INR/USD). Financing was expected to be comprised of a term loan of US$ 15mn (INR 700mn) and sponsor equity of US$ 5.7mn (INR 267.8mn). The actual cost incurred was INR 977.4mn, the cost-overrun being financed by sponsor equity. The term loan was arranged by Punjab National Bank. Other details of financing were not known at the time of collection of this information. The project started construction on 16th December 2011 (Appointed Date) and and was slated for completion by 15th December 2013, but achieved early completion on September 2012. DSBTL had received two bonus semi annuities aggregating INR 141.6mn and 4 regular semi-annuity of INR 47.1mn each since provisional COD.