Essel Ahmedabad Godhra Toll Roads Limited

active

In January 2010, the National Highway Authority of India (NHAI) awarded a 30 year concession (including construction period of 30 months) to a consortium of Essel Infraprojects Limited and China Railway Construction for the strengthening,improvement, four-laning, operation and maintenance of 117.6kms of Ahmedabad to Godhara section of National Highway-59 (NH-59) in the state of Gujarat. Under the contract, the consortium was responsible for the design, construction,finance, operation and maintenance and strengthening of the existing carriageway to a four-lane highway with paved shoulders. The scope includes construction of 4lanes including construction of new pavement, rehabilitation of existing pavement,construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections,interchanges, drains, etc.The expansion project, part of National Highway Development Project Phase - III will ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Essel Infraprojects Limited (74%) and China Railway Construction 18th Bureau Group Corporation Ltd. (26%), established a special purpose vehicle, Essel Ahmedabad Godhra Toll Roads Limited, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI,by quoting the lowest upfront subsidy from NHAI of US$24mn (INR 1080mn @45 INR/USD).Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement was presumed to be signed during March 2010. The project attained financial closure on 10th January 2011. The debt equity ratio of the project was 70:30. The estimated capital cost of the project at the time of financial closure was US$ 280.7mn (INR 12634 mn @ 45 INR/USD) million. Apart from the upfront grant of US$24mn from NHAI, financing comprised INR 8000mn 16year term loan, and INR 3554mn equity. The INR 8000mn term loan had a grace period of 18 months and repayment in quarterly instalments.The debt was arranged by Axis Bank Limited. The participating banks were Bank of Baroda(1300m),Dena Bank Ltd(750m), Punjab National Bank (1700mn), Corporation Bank (1700mn). Construction on the project began in December 2010 and was expected to be completed by June 2013.