IRB Westcoast Tollway Private Limited

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In July 2012, the National Highway Authority of India (NHAI) awarded a 28-year concession (including construction period of 910 days or approximately 2.5 years) to IRB Infrastructure Developers Limited (IRB Infra) for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 187.24kms (from KM93.700 to KM283.300) of Goa/Karnataka Border to Kundapur section of National Highway-17 (NH17),in the state of Karnataka. Under the contract, IRB Infra was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 4-lane highway with paved shoulders. The scope included construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc. The expansion project, part of National Highway Development Project Phase-IV would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. IRB Infrastructure Developers Limited established IRB Westcoast Tollway Private Limited (IWTPL), a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest upfront subsidy of US$ 91.5million (INR 5362.2mn @58.6 INR/USD). Out of the 35 pre-qualified bidders, 2 developers participated in the final bid. 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 for the project was signed in March 2013. The project attained financial closure on 24th December 2013. The grant/debt/equity ratio for the project was 20/53/27. The estimated capital cost of the project at the time of financial closure was US$ 450.4mn (INR 26392.2mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 5362.2mn, financing comprised of term loan of US$ 239.9mn (INR 14060mn) and sponsor equity of US$ 118.9mn (INR 6970mn). The debt was arranged by IDBI Bank and the participating banks were Allahabad Bank (INR 2000mn),Bank of Baroda (2000mn),Bank of India (2750mn),Canara Bank (1500mn),Union Bank of India (2750mn). Construction on the project was expected to begin in March 2014 (the assigned appointment date post signing of concession agreement in March 2013 and financial closure in December 2013) and be completed by September 2016.