GMR Pochanpalli Expressways Private Limited

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In March 2006, the National Highways Authority of India (NHAI) awarded a 20 year concession contract to India’s GMR Group to widen and strengthen the section between Adloor Yellareddy and Kalkallu / Gundla Pochanpalli on National Highway -7 (NH-7). The road ran through Nizamabad and Medak districts of Andhra Pradesh state covering a distance of about 103 kms. GMR Group established GMR Pochanpalli Expressways Private Limited (GMR Pochanpalli), a fully owned special purpose vehicle, to implement the project. GMR won the tender through an international competitive tender, conducted by NHAI. Under the contract, GMR Pochanpalli was compensated for the capital costs and operating costs including returns by way of a fixed annual payment (annuity) from the NHAI in the amount of US$ 12 million during the concession term. Under the annuity scheme, the private operator (GMR Pochanpalli) cannot collect tolls from the users of the facility. The project reached financial closure in September 2006 with a debt equity ratio of 4:1. The total capital cost of the project was estimated at US$ 152 million. ICICI Bank, the lead lender, syndicated the loan of US$ 121.8 million with the following banks: Central Bank of India, Punjab National Bank, Andhra Bank, Bank of India, SIDBI, United Bank of India, Bank of Baroda and Vijaya Bank. The debt repayment period was fifteen and half years. Construction on the project began in September 2006 and was expected to be completed by March 2009. http://www.ppp.ap.gov.in/ProjectDesc.aspx?Recordkey='70'