DP Jain Nagda Gogapur BOT Annuity Road Project Private Limited

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In October 2013, Madhya Pradesh Road Development Corporation (MPRDC) signed a 15-year concession with D P Jain & Co Infrastructure Limited (DPJ) for the strengthening, improvement,two-laning, operation and maintenance,and tolling of 14.98kms of existing major district road- Nagda-Gogapur (from KM0.000 from the end of CC road of Nagda village to KM14.980 at Gogapur village connecting to Mahidapur-Tal MDR in Ujjain district,in the state of Madhya Pradesh. Under the contract, DPJ 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. D P Jain & Co Infrastructure Limited (DPJ) established DP Jain Nagda Gogapur BOT Annuity Road Project Private Limited,a special purpose vehicle in October 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$ 1.0mn (INR 59.9mn). 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 US$ 0.51mn (INR 29.95mn) from MPRDC, during the term of concession. This was a free-use road, so no tolling would be applicable. DPJ would execute the EPC for the project. The concession agreement for the project was expected to be signed in October 2013. The project attained financial closure in April 2014. The project was expected to be financed with a debt/equity ratio of 75/25. The estimated capital cost of the project at the time of financial closure was US$ 5.3mn (INR 321.3mn @58.6 INR/USD). Financing comprised of a 12-year term loan of US$ 3.9mn (INR 240mn) and sponsor equity of US$ 1.3mn (INR 81.3mn). Other details of financing were not known at the time of collection of this information. The project was slated for completion by April 2016.