GVK Deoli Kota Expressway Private Limited

Active

In April 2010, the National Highway Authority of India (NHAI) awarded a 26 year concession (including construction period of 30 months) to GVK Development Projects Pvt Ltd for the strengthening,improvement, four-laning, operation and maintenance of 83kms of Deoli to Kota section of National Highway-12 (NH-12),from Km 165 to Junction of NH- 76 on Kota Bypass,in the state of Rajasthan. 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. GVK Development Projects Limited, a wholly owned subsidiary of GVK Power and Infrastructure Limited, established a special purpose vehicle, GVK Deoli Kota Expressway Private Limited to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI,by quoting the highest premium payment to NHAI. The SPV would pay NHAI a sum of of US$10.8mn (INR 486mn @45 INR/USD)in the first year of operations with 5% increase in each subsequent year (This amounted to an NPV payout of US$159.8mn over a concession period of 26 years at a discount rate of 10%). Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement was signed on 17th May 2010. The project attained financial closure on 5th January 2011. The debt equity ratio of the project was 80:20. The estimated capital cost of the project at the time of financial closure was US$ 183mn (INR 8234.5 mn @ 45 INR/USD) million. Financing comprised INR 6587.6mn 18year term loan, and INR 1646.9mn equity. The INR 6587mn term loan had a repayment schedule of 58 quarterly instalments.The debt was arranged by Yes Bank Limited. The participating banks were Punjab National Bank (1870mn), IIFCL (1180mn), Indian Overseas Bank (1650mn). Construction on the project began in January 2011 and was expected to be completed by July 2013.