Ghaziabad Aligarh Expressway Private Limited

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In December 2009, the National Highway Authority of India (NHAI) awarded a 24 year concession (including construction period of 30 months) to a consortium of SREI, Galfar and PNC Infratech for the strengthening, improvement, four-laning, operation and maintenance of 126kms of Ghaziabad- Aligarh section of National Highway-91 (NH-91) in the state of Uttar Pradesh. 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 Srei Infrastructure Finance Limited, PNC Infratech Limited, and Galfar Engineering and Construction Company (25%), established Ghaziabad Aligarh Expressway Private Limited, a special purpose vehicle, 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$69.1mn (INR 3110mn @45 INR/USD).Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement was presumed to be signed during March 2010. The project attained financial closure on 13th January 2011. The debt equity ratio of the project was 75:25. The estimated capital cost of the project at the time of financial closure was US$ 516.7mn (INR 23250 mn @ 45 INR/USD) million. Apart from the upfront subsidy of INR 3110mn from NHAI, financing comprised a 12year term loan of INR 15140mn, and INR 5000mn sponsor equity. The INR 15140mn term loan had a grace period of 30 months and repayment in quarterly instalments.The debt was arranged by Axis Bank Limited. The participating banks were Allahabad Bank(800m), Bank of Baroda(800m), Bank of India(1340m), Canara Bank(1150m), Dena Bank Ltd(750m), Federal Bank Ltd(750m),Indian Overseas Bank Ltd(1150m), Oriental Bank of Commerce(800m), Punjab National Bank, State Bank of Travancore, Syndicate Bank Ltd, South Indian Bank Ltd, UCO Bank Ltd, Union Bank of India, and Vijaya Bank. Construction on the project began in February 2011 and was expected to be completed by August 2013.