Jaintia Highway Private Limited

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In March 2012,the National Highway Authority of India (NHAI) awarded a concession(including construction period of 30 months) to Simplex Infrastructure Limited for the strengthening, improvement, 2-laning, operation and maintenance,and tolling of 102 kms of Jowai-Meghalaya/ Assam Border Section of NH-44 (km.69.200 to km 173.200) in the State of Meghalaya. Under the contract, Simplex was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 2-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 was part of National Highway Development Project Phase-III.The proposed two-lane road is expected to improve the connectivity in the interior areas of Jaintia Hills besides largely reducing traffic snarls in and around Jowai town.Significant stimulus to trade and commerce in the entire region was expected. Simplex Infrastructure Limited established Jaintia Highway Private Limited, 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$ 25.1mn (INR 1253mn @50 INR/USD). 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 on 5th June 2012. The project attained financial closure on 20th September 2013. The grant/debt/equity ratio for the project was 28.3/34.1/37.6. The estimated capital cost of the project at the time of financial closure was US$ 85.5mn (INR 5010.9mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 1420mn, financing comprised of a 14-year 6-months term loan of US$ 29.2mn (INR 1711.1mn) and sponsor equity of US$ 32.1mn (INR 1879.8mn). The debt was arranged by ICICI Bank of India and the other participating bank was United Bank of India. Construction on the project was expected to begin after the financial closure but Appointed Date was not confirmed by NHAI at the time of collection of this information.