GMR Ulundurpet Expressways Private Limited

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In March 2006, the National Highway Authority of India (NHAI) awarded a 20 year concession contract to India’s GMR Group to widen and strengthen the 71.25 km long Tindivanam-Ulundurpet section of National Highway-45, in the southern state of Tamil Nadu. Under the contract, GMR was responsible for the operation, maintenance, widening and strengthening of the existing two lane highway to a four-lane divided highway. In addition, the project included nearly 21 km of service roads, two bypasses, three ROB (railway over bridge), five pedestrian underpasses and twenty bridges. GMR Group established GMR Ulundurpet 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$ 33.6 million (net present value discounted at 10%) to be disbursed up to the thirteenth year of the concession period. The concession agreement for the project was signed in April 2006 and the project reached financial closure in October 2006. The total capital cost of the project was estimated at US$ 175.5 million. The company raised US$ 131.6 million in debt from ten banks namely Andhra Bank, Bank of India, Bank of Baroda, Central Bank of India, Canara Bank, IDBI Ltd, IIFCL, Punjab National Bank, Union Bank of India and ICICI Bank. The debt was syndicated by ICICI Bank. The door to door tenure of the loan was 16 years. Construction on the project began in November 2006 and was expected to be completed by April 2009.