GMR Jadcherla Expressways Private Limited

Active

Prospective

In February 2006, the National Highways Authority of India (NHAI) awarded a 20 year concession contract to India’s GMR Group to widen and strengthen the 58 km stretch between Shivrampalli / Farukhnagar and Jadcherla on national highway 7 (NH-7) in the state of Andhra Pradesh. Under the contract, GMR was responsible for the operation, maintenance, and widening of the existing two-lane highway to a four-lane highway with paved shoulders. GMR was also responsible for the construction, operation and management of the toll gates. The Farukhnagar-Jadcherla section of NH-7, reported to have one of the highest traffic densities in the country, connected Hyderabad city with Bangalore and Chennai. This expansion project was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. GMR Group established GMR Jadcherla Expressways Private Limited, a special purpose vehicle, to implement the project. GMR won the tender through an international competitive tender, conducted by NHAI, by making the lowest subsidy request – a negative grant of US$ 18.25 million. The project reached financial closure in August 2006 with a debt equity ratio of 3:1. The total capital cost of the project, including the negative grant, was estimated at US$104 million. ICICI Bank, the lead lender, syndicated the loan of US$ 78 million with the following banks: Central Bank, Canara Bank, Bank of Baroda, Andhra Bank, Vijaya Bank and Bank of India. The tenure for repayment of loan was twelve years with a moratorium of 2 years. Construction on the project began in August 2006 and was expected to be in full commercial operation by February 2009. None None

Transport

High

World Bank Group

Project

Automotive, Commercial, Road, Government